By: Andrew Brown
St. John’s Law Student
American Bankruptcy Institute Law Review Staffer
Educational loans made, insured, or guaranteed by a governmental unit are not dischargeable in a chapter 7 bankruptcy case, unless the debtor obtains a hardship determination.[1] Thus, it is very difficult to discharge student loans through a bankruptcy case. This is true even if the loan is made, insured, or guaranteed by a foreign governmental unit. In the case of In re Mulley, the Bankruptcy Court for the Central District of California determined that government guaranteed student loans, made pursuant to the Canada Student Loans Act (“CSLA"), were non-dischargeable under the United States Bankruptcy Code.[2]