In this adversary proceeding from bankruptcy court in Houston, a debtor tried to discharge her private student loans. She had taken them out in 2004, consolidated them in 2006, and then filed bankruptcy in 2008. Meanwhile in 2005, the law changed so that private student loans were no longer dischargeable in bankruptcy. The debtor argued that since the loans were originally incurred in 2004, they should be discharged in the bankruptcy case without proving "undue hardship."
The court ruled against the debtor. The court, U.S. Bankruptcy Judge Letitia Paul presiding, found that since the bankruptcy was filed in 2008, the law at that time governed whether or not the student loans could be discharged. No evidence was submitted by the plaintiff, a dental hygienist, that she could not afford to repay the loans or that repaying them would be an "undue hardship." Judgment for the defendant Educap, Inc.