June 15th, 2009 by Reed Allmand 
According to an article in the Star-Telegram, The Supreme Court will consider the facts in the bankruptcy case United Student Aid Funds vs. Espinosa, 08-1134 to determine if a bankruptcy court can discharge student loans in bankruptcy with just a notice to the lender instead of requiring the debtor to prove “undue hardship” in a hearing.
In the bankruptcy case United Student Aid Funds vs. Espinosa, 08-1134 the borrower filed a Chapter 13 bankruptcy agreeing to repay $13,250 on his student loans. The lender claimed that Espinosa owed $17,832; but did not object to the bankruptcy plan which was finalized in 1994. However in 2000, after the debtor had repaid the agreed amount the lender garnished the borrower’s tax refund to repay the balance of the debt.
So far, all of the lower courts have agreed that the bankruptcy decision to discharge the balance of the debt should stand because the objection was not raised during the bankruptcy. Now The Supreme Court will make their final decision.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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