Student Loans May Be Discharges Due To Undue Hardship

Student loans may be discharged due to undue hardship, rules 9th Circuit

An unemployed debtor may obtain an undue hardship determination substantially in advance of the time she completes payments under her Chapter 13 bankruptcy plan, the 9th Circuit has ruled. The debtor had been making payments on her $100,000 in student loans since 1999.
She filed for bankruptcy
in 2004 and the court confirmed a five-year repayment plan. But after losing her job in early 2005, she petitioned to have the repayment of her student loan debts declared an undue hardship under 11 U.S.C. [section]523(a)(8) and have her loans discharged.
The creditor asserted the issue of undue hardship wasn't ripe because Chapter 13 provides that no determination of dischargeability can occur until a debtor completes payment under the plan already established.
The debtor argued that the issue was ripe at any time under the Rules of Bankruptcy Procedure, which permit the filing of a complaint to determine the dischargeability of any debt "at any time."