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What Happens When Nondischargeable Student Loan Is Later Determined to Be Dischargeable?

The U.S. Bankruptcy appellate panel for the Ninth Circuit addressed a matter of first impression: what happens when a debt that may be considered nondischargeable is later determined to be dischargeable, and more importantly, whether efforts to collect such a debt be exempt from penalties for violating the discharge injunction?

8 minute readJune 01, 2024 at 12:05 AM
By
Lawrence J. Kotler
& Drew S. McGehrin
What Happens When Nondischargeable Student Loan Is Later Determined to Be Dischargeable?

One of the key aims of the bankruptcy process is affording debtors a "fresh start" by granting them a discharge of their debts, However, the Bankruptcy Code has excepted certain debts that are incapable of being discharged as a matter of right, including, without limitation, certain "qualifying" loans used to fund a debtor's education.

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