Biden Administration Urges Supreme Court to Reinstate Student Loan Relief Plan in Emergency Appeal
The Biden administration has filed an emergency appeal at the Supreme Court urging the justices to reinstate the president’s latest student loan relief plan, The Hill reported. The appeal asks to temporarily lift a lower court ruling that currently prevents President Biden from implementing his Saving on a Valuable Education (SAVE) Plan, which would lower student loan payments for millions of borrowers. If the Supreme Court is not inclined to intervene on their emergency docket, U.S. Solicitor General Elizabeth Prelogar alternatively requested the justices take up the legality of the plan on the merits and expedite consideration so oral arguments can be held this fall. The court ordered the SAVE Plan’s challengers to respond by Monday afternoon. The posture mimics how the Biden administration handled challenges to its earlier student debt plan, which would’ve forgiven at least $10,000 in debt relief to individual borrowers. Last year, the Supreme Court struck down that plan in a 6-3 vote along ideological lines after agreeing to take up the matter in full once it received a demand for emergency action from the Justice Department. The SAVE plan was first introduced after the Supreme Court’s decision.
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Fifth Circuit Receivership Opinion Raises Questions About the Automatic Stay
Fifth Circuit says that the court must have obtained personal jurisdiction over a third party in a receivership to enforce an injunction. Is the same true for the automatic stay and the discharge injunction in bankruptcy? Is there no injunction before there’s personal jurisdiction?
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Preserving Defensive Setoff Rights Doesn’t Require Filing a Claim, Judge Glenn Says
Defensive setoff rights are not discharged by chapter 11 confirmation, even when no proof of claim was filed.
Nondischargeability Is a ‘Thing’ for Corporate Subchapter V Debtors, Judge Thorne Says
The tide is turning against corporate Sub V debtors. Two bankruptcy judges now side with two circuits in holding that debts of corporate debtors can be nondischargeable.
BAP Pushes Back Against Kelly on the Dischargeability of Disciplinary Costs
The Ninth Circuit BAP rebelled against the Supreme Court’s departure from the statute in Kelly v. Robinson on dischargeability under Section 523(a)(7).
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Fourth Circuit Broadly Defines Restitutions that Aren’t Discharged in Chapter 13
The federal appeals court brushed aside technicalities under state criminal law in deciding that an order for restitution was not discharged under Section 1328(a)(3).
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Judicial Estoppel Barred the Debtor from Filing an Undisclosed ‘PI’ Claim, Circuit Says
Eighth Circuit holds that a chapter 13 debtor, not the trustee, has standing to bring personal injury claims.
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Federal Government to Pause Student Loan Payments, Interest for 3 Million Borrowers
In response to court rulings blocking key elements of the federal government’s new student loan repayment program, the Biden administration will be giving about 3 million borrowers a reprieve from their monthly payments, The Epoch Times reported. The 3 million borrowers eligible for the pause are enrolled in the income-driven repayment program dubbed SAVE and have a monthly payment that is more than zero, according to the U.S. Department of Education. About 4.5 million SAVE enrollees who qualify for zero-dollar payments because of low incomes will not be included in the pause. The payment pause is similar to the COVID-19 student loan relief that lasted for 3 1/2 years, from March 2020 through September 2023, during which borrowers didn’t have to pay monthly bills and interest didn’t accrue. Borrowers who are eligible for the new pause will be informed directly in the coming days. The announcement was made days after a federal judge in Kansas blocked the implementation of the final segment of the SAVE plan but declined to unwind the portions of it that are already in place. The blocked segment is a calculation formula update scheduled to take effect on July 1. It would have allowed borrowers with undergraduate loans to have their monthly payments capped at 5 percent of their discretionary income, down from the current 10 percent limit. (Subscription required to view article.)
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