Collector - May 2017 - 24

The undue hardship provision is
definitely a sticky wicket in many
bankruptcy cases primarily because
Congress has not clearly defined it.
Depending on which court the consumer's
case lands in, the measuring stick judges
use to determine this hardship will vary.
"Demonstrating undue hardship is
extremely difficult depending on where
you live," Tate said. "While different undue
hardship tests have evolved over the years,
those tests still have to be applied by a judge
and that means there's some subjectivity
involved. One judge's undue hardship is
another judge's plain-old hardship."
The two main tests of undue hardship
are the Brunner test and the totality of
the circumstances test. Most courts use
Brunner, but a small minority relies on the

totality of the circumstances test, "which is
an easier test to work with," Hauser said.
In Fern v. FedLoan Servicing, the
U.S. Bankruptcy Appellate Panel for
the Eighth Circuit, using the totality
of the circumstances test, affirmed
that the consumer, a single mother of
three who had never made a payment
on her $27,000 student loan debt,
could discharge her student loan debt
in bankruptcy in part because she had
modest expenses and "income [that] has
been consistent and is unlikely to improve
in the future."
In contrast, last year an Eleventh
Circuit court, which uses the Brunner test,
ruled that the single mother borrower in
ECMC v. Alexandra Acosta-Conniff who
"admittedly finds herself in undesirable
financial difficulties," failed to show that
her purported "inability to pay [is] likely
to continue for a significant time, such that
there is a certainty of hopelessness that

[she] will be able to repay the loans within
the repayment period."

EXPERTS SKEPTICAL REFORM
IS COMING SOON
Interestingly, some of the large student
loan lenders have indicated that they
would be supportive of reasonable
bankruptcy reform in the student
loan space. Many providers, and even
consumer attorneys, also say that clearly
defining the undue hardship provision
and reinstituting a time limit to discharge
student loan debt without proving undue
hardship would be welcome.
Whether or not we can expect to see
any reform in this arena is uncertain. Over
the years, legislators have tried and failed
to push through bills that would make it
easier to discharge student loans. And even
if similar bills were introduced now, Hauser
noted, "it seems very unlikely they would
progress in the current Congress."

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Table of Contents for the Digital Edition of Collector - May 2017

Upfront
Industry News
Best Practices
FYI
Collection Tips
At Your Service
A Clean Slate
ACA International’s 2017 Convention and Exposition Feature
Calendar
Honor Roll
Spring Cleaning for Your Business
Sun Tzu and the Art of Collection Sales
We Have to Stop Meeting Like This
ACA Files Brief in Pivotal Case Challenging CFPB’s Structure and Power
Compliance
ACA SearchPoint
Last Word
Collector - May 2017 - Cover1
Collector - May 2017 - Cover2
Collector - May 2017 - 1
Collector - May 2017 - Upfront
Collector - May 2017 - 3
Collector - May 2017 - Industry News
Collector - May 2017 - 5
Collector - May 2017 - 6
Collector - May 2017 - 7
Collector - May 2017 - Best Practices
Collector - May 2017 - 9
Collector - May 2017 - FYI
Collector - May 2017 - 11
Collector - May 2017 - Collection Tips
Collector - May 2017 - 13
Collector - May 2017 - At Your Service
Collector - May 2017 - 15
Collector - May 2017 - 16
Collector - May 2017 - 17
Collector - May 2017 - 18
Collector - May 2017 - 19
Collector - May 2017 - 20
Collector - May 2017 - A Clean Slate
Collector - May 2017 - 22
Collector - May 2017 - 23
Collector - May 2017 - 24
Collector - May 2017 - 25
Collector - May 2017 - 26
Collector - May 2017 - 27
Collector - May 2017 - 28
Collector - May 2017 - 29
Collector - May 2017 - 30
Collector - May 2017 - 31
Collector - May 2017 - 32
Collector - May 2017 - 33
Collector - May 2017 - ACA International’s 2017 Convention and Exposition Feature
Collector - May 2017 - 35
Collector - May 2017 - Calendar
Collector - May 2017 - Honor Roll
Collector - May 2017 - Spring Cleaning for Your Business
Collector - May 2017 - 39
Collector - May 2017 - 40
Collector - May 2017 - 41
Collector - May 2017 - Sun Tzu and the Art of Collection Sales
Collector - May 2017 - 43
Collector - May 2017 - 44
Collector - May 2017 - 45
Collector - May 2017 - We Have to Stop Meeting Like This
Collector - May 2017 - 47
Collector - May 2017 - 48
Collector - May 2017 - 49
Collector - May 2017 - ACA Files Brief in Pivotal Case Challenging CFPB’s Structure and Power
Collector - May 2017 - 51
Collector - May 2017 - Compliance
Collector - May 2017 - 53
Collector - May 2017 - ACA SearchPoint
Collector - May 2017 - 55
Collector - May 2017 - Last Word
Collector - May 2017 - Cover3
Collector - May 2017 - Cover4
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