Student Loan Must Be Paid in Bankruptcy Timeframe, 5th Cir. Says

Two student loan borrowers who filed for Chapter 13 must fully pay off their loan debts within a five-year period under their bankruptcy plans, a federal circuit court ruled.

The 2-1 decision from the US Court of Appeals for the Fifth Circuit on Monday limits options for how Chapter 13 debtors with above-median income can pay back student loans, which are already difficult to discharge under bankruptcy law.

Under the majority’s holding, long-term nondischargeable student loan debt could have to be repaid years before full payment would otherwise be due, to receive Chapter 13 plan approval. Judge Irma Carrillo Ramirez ...