Unpaid student loans--undue hardship

I have read that it is almost impossible to qualify for the undue hardship exception.  If there is an outstanding balance when someone retires at age 66, and if the debtor's only source of income is social security, would repayment constitute undue hardship?

The debtor is currently making payments.  However, these loans will not be paid off before retirement because the debtor, who graduated from an online university at age 60, has been unable to find full-time employment.

• Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Not all courts use this test. Some courts will be more flexible.

The above is quoted from the following website that also provides samples of "undue hardship" petitions.

http://www.studentloan...

No guarantees, but it appears that you might fit the parameters, and making payments exhibits the good faith requirement.

Consult a bankruptcy attorney.

On the other hand, see

http://www.nsclc.org/a...

From the National Senior Citizens Law Center:

The federal Debt Collection Act of 1982 authorized the use of administrative offset to recover government debts but prohibited its use on all claims that were outstanding for more than ten years. In 1991 Congress passed the Higher Education Assistance Act of 1991 which purported to abrogate statutes of limitation with respect to student loans, but made no reference to 42 U.S.C. § 407(a) the anti-assignment provision of the Social Security Act. An earlier Congress had enacted a provision stating that 407(a) could not be modified except by express reference. Subsequently in 1996, Congress passed the Debt Collection Improvement Act which extended the 1982 offset authorization to Social Security benefits with express reference to 407(a). The ten year limit was retained in the 1996 legislation. 31 U.S.C. § 3716(e)(1). How are these statutes to be reconciled? Two Circuits addressed this question within two weeks of each other last year and reached opposite conclusions. Lockhart v. United States, 376 F.3d 1027 (9^th Cir. 2004); Lee v. Paige, 376 F.3d 1179 (8^th Cir. 2004).

Lockhart appealed to the Supreme Court which this week unanimously affirmed the Ninth Circuit decision in favor of the government. Lockhart v. United States, ___U.S.___, 2005 WL 3299398. Lockhart argued that the repeal of the statute of limitations in 1991 applied only to then valid means of debt collection. The Court rejected this argument and found the express reference in the 1996 legislation to be sufficient. "The fact that Congress may not have foreseen all of the consequences of a statutory enactment is not a sufficient reason for refusing to give effect to its plain meaning."

Justice Scalia joined in the opinion of the Court and filed a concurring opinion stating his view that statutory express reference provisions such as 407(b) are without effect because "one legislature cannot abridge the powers of a succeeding legislature." Fletcher v. Peck, 6 Cranch 87 (1810). For further information, contact Gerald McIntyre in the NSCLC Los Angeles office.