A former law student has won a bid in bankruptcy court to discharge nearly $340,000 in education debt because her diagnosis of Asperger Syndrome rendered her unable to hold a job and repay her loans. The U.S. Bankruptcy Court for the District of Maryland on May 17 found that Carol Todd, who attended the University of Baltimore School of Law, met the difficult burden of showing that she would suffer undue hardship if forced to repay her debt.
Todd, who was 63 at the time of her student loan discharge trial in Nov. 2010, received a GED at 39 and began pursuing higher education. She received an associate degree at Villa Julie College, now Stevenson University, and a bachelor's degree at the College of Notre Dame of Maryland, now Notre Dame of Maryland University. At Towson University, she obtained two master's degrees. She then enrolled at the University of Baltimore School of Law and Regent University, and took classes online at an unaccredited school. But after all of that, Todd was never able to keep a steady job.
She filed for Chapter 7 bankruptcy in 2009, when she owed $339,361 to three student loan creditors. Due to a controversial amendment to U.S. bankruptcy law in 2005, it is very difficult for filers to discharge their unpaid student loans in bankruptcy court. There are, however, some exceptions. The most powerful exception to this law is the so-called “undue hardship” exception.
If a filer can prove to the judge that he or she would not be able to repay student loans due to an undue hardship, then the student loans may be discharged. This standard, however, can often be hard to meet. Indeed, Todd’s attorney stated one can “hardly find a student loan case where the debts are discharged.”
To check out the Court’s opinion, see: Todd v. Access Group, Inc., Adv. Pro. 10-00091-RAG (D. Md.).