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Illness And Inability To Repay: The Role Of Debtor Health In The Discharge Of Educational Debt, Rafael I. Pardo
Illness And Inability To Repay: The Role Of Debtor Health In The Discharge Of Educational Debt, Rafael I. Pardo
Scholarship@WashULaw
For a debtor to obtain a discharge of student loans in bankruptcy, the debtor must establish that their repayment would impose an undue hardship. This Article presents the results of an empirical study of bankruptcy court doctrine over a ten-year period that involved undue hardship discharge proceedings where the court reported information on the debtor's health status, monthly household income, and monthly household expenses. The data show that a medical condition increased a debtor's odds of being granted a discharge by 140% but that household income and expense levels did not have a statistically significant association with legal outcome. These …
Undue Hardship In The Bankruptcy Courts: An Empirical Assessment Of The Discharge Of Educational Debt, Rafael I. Pardo, Michelle R. Lacey
Undue Hardship In The Bankruptcy Courts: An Empirical Assessment Of The Discharge Of Educational Debt, Rafael I. Pardo, Michelle R. Lacey
Scholarship@WashULaw
The discharge in bankruptcy embodies the policy that relief should be granted to an individual who has ceased to be economically productive by virtue of burdensome debt obligations (the fresh start policy). Once the debtor has been deemed eligible for discharge, forgiveness of debt is automatic, accomplished through legislative rule and its judicial enforcement. With regard to the discharge of educational debt, however, Congress has devolved the exercise of debt relief to courts. An obligation to repay such debt will be discharged if a debtor establishes that undue hardship would be suffered in the absence of its discharge. A court …