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Undue hardship is a legal term used in bankruptcy and anti-discrimination litigation to determine if the burden of an action is too great to require it. Student loan and tax debt are generally not forgivable, except in cases of excessive hardship. Undue hardship is difficult to prove, but can exempt a debtor from repaying their debt. In civil rights laws, employers are required to provide reasonable accommodations, but not if it creates an undue burden. The decision is made on a case-by-case basis.
Undue hardship is a legal term used in bankruptcy to determine whether student loan and some other types of debt will be forgiven. It is also used in anti-discrimination litigation to determine whether an employer will be required to provide specific accommodations for an employee. Undue hardship essentially means that the burden of the action – repaying loans or carrying out housing – is so great that the court will not require the action to occur.
Student loan debt and tax debt are favorably protected by United States laws. Under the law, student loan debt and IRS debt generally cannot be forgiven, even in bankruptcy, as other credit card debt or types of debt can. Essentially, this means that a person cannot escape student loan debt and will be required to pay and, at times, garnish on his or her salary.
The only exception to this rule regarding student loan forgiveness in bankruptcy occurs when there is excessive hardship. Undue hardship means that the hardship caused by repaying student loans is far greater than the hardship a normal person would face. Typically, in order to meet this standard and be exempt from repaying their student loan or tax debt, the debtor must demonstrate that they will absolutely be unable to maintain even a minimal standard of living if they are forced to repay the debt. It must also demonstrate that his situation is not expected to improve anytime soon and that repayment of the debt will continue to place an undue or insurmountable burden on him for most of the rest of his life.
The bankruptcy judge will decide on a case-by-case basis whether the charge would entail such a burden on the debtor. The standard is very difficult to achieve. It is possible, however, especially in cases where a person has become totally or permanently disabled and therefore unable to work to repay the debt.
In civil rights laws, undue hardship also exists as a legal concept. Employers are required to provide reasonable accommodations for disabled employees under the Americans with Disabilities Act. Accommodation is also required for religious employees’ right to observe their religious beliefs under Title VII of the Civil Rights Act of 1964. While employers are required to provide these modifications to protected employees, they are not required to do so if doing so would create an inconvenience or undue burden. Whether a burden or hardship is sufficient to eliminate the employer’s obligation is also decided on a case-by-case basis by a judge or jury.
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