Today the Center for Responsible Lending (CRL) filed this brief in the Supreme Court in support of Thelma McCoy's petition to have the court take up undue hardship discharge for student debt in bankruptcy. Currently and for some time, different courts of appeal have split in how they interpret what is "undue hardship," with some courts taking a holistic "totality of the circumstances" approach and others following a rigid, demanding test known as the Brunner test. A number of courts representing some of the Blackest areas in the country such as the Fifth Circuit, have interpreted Brunner in draconian ways demanding “total incapacity” or a “certainty of hopelessness” in repayment.
The brief addresses the unfairness of the Brunner test's harsh, unforgiving assessment of "undue hardship," as well as its inconsistency with the text of the Bankruptcy Code. Most importantly, the brief focuses on the impact of student debt on borrowers of color, illustrating how these debtors are further hindered by the Brunner test and would benefit from a more holistic approach, as some circuits have adopted.