Eighth Circuit Panel Upholds Discharge of Student Loan Bank Debt

An appellate panel affirmed a bankruptcy court’s decision to discharge a 50-year-old woman’s student loan debt owed to Bank of North Dakota.

After evaluating the “totality-of-circumstances” test, which reviews a debtor’s finances and expenses to determine if repaying a student loan causes undue hardship, the US Bankruptcy Appellate Panel for the Eighth Circuit found the bank’s loan should be discharged, but not a separate loan issued by the Department of Education.

Rachel Duncanson filed for Chapter 7 bankruptcy on July 14, 2020, and sought to discharge both loans two months later. She owed the Department of Education $108,073 and the ...