Ch. 13 Debtor Can Purge Student Loans: High Court

Law360, New York (March 23, 2010, 5:51 PM EDT) -- The U.S. Supreme Court has refused to void a bankruptcy court's order discharging a Chapter 13 debtor's student loan interest payments, despite its finding that the order was a “legal error” because the court didn't issue a finding of undue hardship.

In an opinion by Justice Clarence Thomas, the high court unanimously struck a blow to student loan guarantor USA Funds Inc. and affirmed the U.S. Court of Appeals for the Ninth Circuit's decision not to void the lower court's order.

The high court acknowledged that...
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