Undue Hardship

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Because most student loan debt falls within one of the categories under section 523(a)(8), most bankruptcy debtors who seek to discharge these debts will face the question of whether they meet the statutory “undue hardship” standard. A student loan may be discharged if payment of the debt “will impose an undue hardship on the debtor and the debtor’s dependents.” There is no statutory definition of “undue hardship.” Generally, it means the borrower’s present income is inadequate to pay the loan and this situation is not likely to change even after considering the borrower’s future earning potential.