Income Contingent Repayment Plans Not Required

Several Cases have required that people first attempt income contingent loan repayment plans but that rule was over ruled in Kentucky. Our Circuit Barrett v Educational Credit Management Corp 487 F 3rd 353 2007 when a medically disabled person was asked by ECMC to first attempt a ICRP before qualifying for a hardship discharge. Still it is a factor that may be required to show the court that an individual has made every effort to repay the debt which is a requirement of Brunner. In almost all of these cases there were other reasons for the denial.

In re Birrane, 287 B.R. 490 (B.A.P. 9th Cir 2002)

The debtor’s failure to file for an Income Contingent Repayment Plan under the William D. Ford Consolidation Loan Program is a factor in consideration of whether the debtor made a good faith effort to repay her loans.

In re Archibald, 280 B.R. 222 (S.D. Ind. 2002)

The Court had no problem in denying a hardship student loan discharge to a Debtor with $98,000 in student loan debt for a 48-year-old debtor, she only had $13,000 in personal income, her companion earned more than $100,000, she had not made efforts to maximize her income, had large discretionary expenses, and had not made a good faith effort to avail herself of consolidation repayment options.

In re Block, 2002 WL 220654 (Bankr. W.D. Mo. 2002)

Student loans were determined to be nondischargeable due to the availability of an income contingent repayment plan.

In re Thoms, 257 B.R. 144 (Bankr. S.D.N.Y. 2001)

The Court ruled against undue hardship because, because the debtor did not attempt to restructure her student loan debt before filing for bankruptcy along with other reasons.

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