The Eight Circuit Bankruptcy  Appellate Panel denied an application seeking to discharge student loans because the debtor voluntarily quit a full-time job eight months prior to filing bankruptcy.

The debtor, Erin Kemp, is a 36-year-old single mom raising a 13-year-old daughter in Arkansas.  She obtained a psychology degree in 2010 and for the past 17 years she worked for a bank earning up to $45,000 per year.  However, eight months prior to filing bankruptcy she quit her full-time bank job due to problems with depression and anxiety and took a part-time job at Lowe’s earning $13.46 per hour. She supplemented her income by performing home daycare services as well.Continue Reading 8th Circuit BAP Denies Discharge of Student Loan

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Last week the bankruptcy court for the Western District of Missouri discharged $37,243 of federal student loans for Michael Abney despite the fact that he was not required to make any payment on his account under an Income Based Repayment plan (IBR). (See In re Abney)

The facts of the case are as follows:


The 8th Circuit Bankruptcy Appellate Panel denied Kathryn Nielen’s application to discharge her student loans, and the result, although discouraging in many respects, is not all that surprising. (Nielsen vs. ACS Inc, No. 13-6034, 8th BAP 2014)  The debtor graduated high school in 1995 and went on to obtain an Associates of Science degree in


There has been a definite change in the attitude of bankruptcy courts are taking towards the discharge of student loans in bankruptcy.  I am reading cases throughout the nation that indicate a greater willingness of the Courts to discharge these debts.  A case affecting debtors in Nebraska with student loan debt underscore this recent change

I think most bankruptcy attorneys would agree that Student Loans are the single most difficult debt to discharge in bankruptcy.  This is because Section 523(a)(8) of the Bankruptcy Code prohibits the discharge of student loans unless the debtor can show that it imposes an “undue hardship” on the debtor and the debtor’s dependents.   Proving that