Discharge of Debt Tag

25 Aug When Is An Undue Hardship Not An Undue Hardship? When It Involves A Student Loan.

Student Loans are generally not dischargeable in bankruptcy, and there is no statue of limitations on their collection. This makes it very difficult to get away from a student loan, and now it appears that the bar has been raised and it is even harder to receive a hardship discharge from a student loan in the 4th Circuit bankruptcy courts.
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10 Jul Avoiding “Good Faith” Objections to Chapter 13 Plans

Sometimes a chapter 13 case is filed, instead of chapter 7, due to concerns over possible non-dischargeability complaints. Perhaps the debtor has incurred large credit charges or balance transfers recently, or maybe he or she owes a large debt to a creditor who might claim fraud, or a wilful or malicious injury. If there are creditors who are upset with the debtor over misconduct, chapter 7 may be an invitation to expensive bankruptcy court litigation over dischargeability issues; hence the decision to file chapter 13 instead. But what about the possibility of an objection to the chapter 13 plan, or an objection to dischargeability of the debt in chapter 13? It's a good idea to minimize the chances of such objections or complaints, if possible, through careful drafting of the initial chapter 13 plan. This can be accomplished by proposing, along with the initial filing, a generous chapter 13 plan providing for full payment of all creditors, or something close to full payment. This may induce an otherwise unhappy creditor into believing that time and money should not be wasted objecting to a chapter 13 plan which, after all, provides for a large payment to the creditor. This tactic may also induce the creditor to forego filing a non-dischargeability complaint within the mandatory 60 day deadline, which runs from the date of the creditors meeting, due to the creditor's expectation of a large payment under the plan.
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30 Jun Is Administrative Discharge of Student Loans Available in Bankruptcy?

Administrative standards for discharge of a trade schoolstudentloanare not available in a bankruptcy case according to the United States Bankruptcy Court for the Northern District of Ohio in the case of Gregory v. U.S. Department of Education (April 1, 2008), which ruled that the requirement of undue hardship must always apply to the discharge of student loans in bankruptcy. The court then used the potential availability of a closed-school administrative discharge under 34 C.F.R. 682.402(d) as one reason for denying a hardship discharge for which the debtor qualified under two of the three prongs of the Brunner test . The record of this case suggests thatthe debtorrepeatedly informed the Department of Education and its collection agents that the school had closed before she completed the program, but was never provided with information on how to apply for an administrative discharge. The opinion is also silent as to whether such information was provided to the debtor or her attorney when the Department of Education filed its proof of claim in the Bankruptcy case.
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