CALL NOW 702-880-5554
  • 8985 S. Eastern Ave., Suite #350, Beltway Corporate Center, Las Vegas, NV 89123
CALL US TODAY 702-903-1459
Speak to a Lawyer
Free Consultation
CALL NOW 702-880-5554

Oregon Debtor Discharges Law School Debt

I hope you enjoy reading this blog post. If you want to hire a bankruptcy lawyer, click here.
Suspense Accounts
Table of Contents

It is well-known that student loan debt is particularly burdensome. The bankruptcy code does not take kindly to it, and over the last fifteen years Congress has increasingly altered it to protect creditors’ interests, including its own. Although, in recent years it has enhanced income-contingent repayment plans and hardship discharges. Nevertheless, debtors are still taking their cases to bankruptcy court, and thankfully winning against their creditors. The latest victory goes to a debtor who had $85,000 in student loan debt for a law degree. Here are the facts.

  • Michael Hedlund borrowed money from The Education Resources Institute (TERI) and the Pennsylvania Higher Education Assistance Agency (PHEAA) in the form of guaranteed federal loans.
  • Hedlund sat for the bar exam twice, failed, and then locked his keys in his car for the third time. Because he could not become a lawyer, he lost his job. This is a reason not to take on student loan debt for professional education: If you can’t obtain the license, you still have to pay the debt.
  • Starting in 1999, Hedlund obtained forbearances due to his low income, which allowed the interest to accrue. After his forbearances ended, he tried to consolidate his loans but was told they were already in default status. Nowadays, he would qualify for the government’s Income-Based Repayment (IBR) plan, but that didn’t exist at the time.
  • After TERI and PHEAA began garnishing Hedlund’s wages in 2003, he filed chapter 7 bankruptcy.
  • The bankruptcy court granted a partial discharge of all but $30,000 of Hedlund’s debts to PHEAA. A Bankruptcy Appellate Panel reversed the decision, so Hedlund appealed to the 9th Circuit Court of Appeals, which sided with Hedlund. The case went back to the bankruptcy court, the judge passed away, and the successor judge again sided with Hedlund. PHEAA appealed to district court, won again, and finally the case went to the 9th Circuit Court of Appeals again. The lesson here is that some student loan bankruptcy cases can take a very long time to reach a conclusion, but often the money is worth it.
  • At issue was whether Hedlund had made a “good faith” effort to repay the loans. Compared to a similar case, the appellate court found that he had, granting him a partial discharge of his loans.

    • Michael Hedlund fought hard to discharge his student loans, and by sticking it out he won against a tenacious creditor. If you are in a similar situation as he was, and you have the help of an experienced and equally tenacious Las Vegas bankruptcy lawyer, you might be able to reduce some of your student loan debts as well.

    For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.

    Schedule Today!

      Free Consultation

      Categories

      Recent Posts

      About the Author
      George Haines

      George Haines is the Owner and Managing Attorney of Freedom Law Firm in Las Vegas, Nevada. For over two decades, he has helped thousands of individuals and families overcome debt through bankruptcy, foreclosure defense, loan modifications, and consumer protection cases. Licensed in Nevada, New York, and New Jersey, George guided Nevadans through the Great Recession and COVID-19 era, earning a reputation for practical strategies that save homes, protect wages, and provide fresh starts.

      Before founding Freedom Law Firm, he co-founded one of Nevada’s most recognized consumer law practices. He is an active member of the National Association of Consumer Bankruptcy Attorneys, the American Bankruptcy Institute, and other leading organizations, reflecting his commitment to excellence and consumer advocacy.

      More About George
      George Haines

      Owner and Managing Attorney

      you also might be interested in

      Your Life After Chapter 13

      Your Life After Chapter 13

      January 20, 2026

      Finishing Chapter 13 feels like finally getting to the end of a long, winding trail you weren’t sure you’d ever finish. You’ve had this repayment plan hanging over your head

      Read More »

      Our Locations

      8985 S Eastern Ave Suite 100 Las Vegas, NV 89123
      1180 N. Town Center Dr., Suite 100 Las Vegas, NV 89144​
      8985 S Eastern Ave Suite 100 Las Vegas, NV 89123
      Schedule Today!

        Free Consultation

        Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

        Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

        Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.