The winds of change may be blowing regarding student loan dischargeability in bankruptcy cases, as two recent federal appeals court cases demonstrate. Section 523(a)(8) of the bankruptcy code states that in a chapter 7 or chapter 13 case, the bankruptcy court will not discharge any student loan debt “unless excepting such debt from discharge under [...]
Student Loans
“Her entitlement to a discharge in bankruptcy is unquestioned.” She is “destitute” according to Chief Judge Frank H. Easterbrook of the 7th Circuit Court of Appeals in a recent opinion. These are the opening statements that begin a sad story. Despite her extreme circumstances, a 53 year old woman who had not been able to [...]
The Eighth Circuit Bankruptcy Appellate Panel upheld a lower court’s ruling discharging $204,525.00 in student loans, despite the lender’s argument that the debtor could have continued her education and sought higher-paying employment as a chiropractor. Shaffer v. U.S Department of Education, No. 12-601o (8th Cir.BAP Oct. 30, 2012), involved an unmarried debtor in her mid thirties [...]
You’ve been slapped with a notice of a student loan offset. It can be reduced. The offset means that your tax refund or Social Security benefits will be used to pay a federal student loan. Your bankruptcy lawyer already told you that you can’t qualify for a hardship discharge because you have a modest standard [...]
Discharge of student loans in bankruptcy is an uphill battle according to a New York Times article. News papers these days abound with descriptions of truly desperate families saddled with massive student debt. The story of Ohio student loan debtor Doug Wallace, age 31, unemployed and legally blind is hardly unusual. In fact, it [...]
