Yahoo Finance Covers BLC’s $440,000 Student Loan Discharge Win

Featured in Yahoo Finance: Bankruptcy Law Center attorneys Ahren Tiller and Brett Bodie won a discharge of nearly 99% of a client’s $440,000 in federal student loans.

Most people believe student loans can never be erased in bankruptcy. A Bankruptcy Law Center case covered by Yahoo Finance shows that belief is wrong — and it changed our client’s life.

The case: $440,465 in medical school debt

Our client, Seth Koeut, was born in a Cambodian refugee camp and came to the United States as a child. He earned a degree from Duke University, finished medical school, and passed his board exams — but was never matched with a residency program, a fate that befalls thousands of medical graduates every year. Without a residency he could not practice medicine. He applied to roughly 5,000 jobs and worked retail and restaurant positions while his federal student loan balance grew to $440,465.66.

BLC attorneys Ahren Tiller and Brett Bodie represented Mr. Koeut in his Chapter 7 bankruptcy and the adversary proceeding required to seek a student loan discharge — through dismissal, appeal, and trial — arguing that his loans imposed an undue hardship under the Brunner test.

The result: 98.9% discharged

In December 2020, the U.S. Bankruptcy Court for the Southern District of California ruled in Mr. Koeut’s favor, discharging 98.9% of the debt and leaving a balance of $8,291.67 at 0.11% interest, with no payment due for years. Rejecting the government’s claim that he had not tried hard enough, the court wrote that a medical school graduate working as a parking attendant and dishwasher “cannot be described as lazy,” and concluded: “Koeut deserves a break.”

The Department of Education did not appeal. Yahoo Finance covered the win as part of a growing national trend of courts recognizing that student loans can be discharged when repayment would impose an undue hardship.

What this means if you are drowning in student loan debt

Student loans are hard — not impossible — to discharge. It requires a separate lawsuit inside your bankruptcy (an “adversary proceeding”) and proof of undue hardship. The right facts, the right evidence, and attorneys who have actually won these cases make the difference. Learn more in our guides on how to file for student loan bankruptcy and why these discharges are hard to obtain, or start with the basics of Chapter 7 bankruptcy in San Diego.

If student loan debt has made your financial life unlivable, call 800-551-7922 for a free consultation with the team that won this case.

Prior results do not guarantee a similar outcome. Every case depends on its own facts. Case details above are drawn from the public court record and Yahoo Finance’s reporting.