Student loan debt is not dischargeable in bankruptcy. That’s not news–it’s pretty much common knowledge. But student loan debt for newly-minted lawyers is a growing problem, since the job market for lawyers is, well, abysmal would be an optimistic assessment. [A] generation of J.D.’s face the grimmest job market in decades. Since 2008, some 15,000 [...]
Student Loans
On more than one occasion, I have represented individuals in Chapter 7 and Chapter 13 bankruptcy cases when the debt that prompted the filing was wholly or in large part co-signed debt. It seems that underwriting standards for most large loans have become tighter and nowhere is this more true than in the case of [...]
Below poverty level income for five of the past six years was no basis for discharging a chapter 7 debtor’s student loans, where she was voluntarily underemployed, had no dependents, and lived with her boyfriend, relying on his income as if they were married, according to the Bankruptcy Appellate Panel for the Eighth Circuit. The debtor in [...]
Bankruptcy lawyers and their clients are plagued by the Brunner test when trying to discharge student loans. While the Bankruptcy Code says that student loans may be discharged if the debtor shows “undue hardship,” the Brunner test provides that student loans may only be discharged if the debtor shows: (1) inability, at his current level [...]
The 8th Circuit Federal Bankruptcy Appellate Panel recently upheld a Minnesota bankruptcy court’s discharge of $300,000 in student loans, even though the debtor’s husband was paying for a newly installed screened-in deck and had just purchased a luxury Chevrolet Suburban. In this case, In re Walker, 2010 WL 1407769 (8th Cir. BAP April 9, 2010), [...]
Payments on student loans that are guaranteed ultimately by the federal government — the vast majority of student loan debt, in other words — can be garnished from your paycheck. And it can be done without going to court. But bankruptcy can stop the garnishment. Even if you live in a state that prevents garnishment [...]
