The Justice Department, in partnership with the Department of Education, recently announced new guidelines that loosen the strict application of the “undue hardship” exceptionwhen defending a student loan dischargeability action. This new guidance is a game changer. In the past the Department of Justice narrowly applied the undue hardship exception when defending discharge of student loans to the extent that it was almost impossible to discharge federal student loans in bankruptcy. Now government attorneys have been given the green light to consent to discharge if a debtor fills out an attestation form and meets certain criteria.
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