Thursday, January 21, 2010

Student Loan Debtor Granted Trial

In the case of In re Coco, 335 Fed. Appx. 224 (3rd Cir. 2009), a chapter 7 debtor brought an adversary proceeding against the student loan creditor, seeking determination that her student loan debt was not excepted from discharge.

The bankruptcy court granted summary judgment against the student loan debtor, finding there were no material issues of fact and that the student loan creditor was entitled to judgment as a matter of law. The bankruptcy court held that the debtor failed to establish undue hardship and was thus not entitled to a discharge of the student loan debt.

The student loan debtor appealed the bankruptcy court’s decision. The court of appeals held that factual issues as to whether debtor made good-faith efforts to repay her student loans precluded summary judgment for creditor. The bankruptcy court’s judgment was vacated.

The student loan debtor will get her trial to prove that she made good-faith efforts to repay her student loan.

Warmest Regards,

Bob Schaller

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By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
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