     Kristi Feathers-Carreon & Associates | Thursday, January 13, 2000 - 08:37 am 
This is interesting. As the rules stands now student loans are usually non dischargable in a Bankruptcy unless you can qualify for destitute. This excerpt shows that ,that may be changing! That would give students a little more freedom to include loans rather then having them exluded every time. This info may be helpfull to students that have filed BK or will be filing BK. This is general info and not intended to fit any exact person
The honorable Samuel Wilson, Chief Unites States
District Judge for the Western District of Virginia
recently issued an opinion stating that Bankruptcy
Court Judges may grant a partial discharge of student
loans. The court found the plain language position set
forth in In re Taylor to be unpersuasive. It was
apparently a case of first impression for the Western
District of Virginia. Virginia and the Fourth Circuit
are not known for their trail blazing character. |
| voigtkampff | Thursday, January 13, 2000 - 10:11 am
Even outside of a bankruptcy discharge for undue hardship under §523(a)(8), it maybe possible to get help on student loans outside of bankruptcy.
Some loan programs allow income-contingent payments. So even if you owe $1,000 per month, if your income establishes that all you can afford to pay is $25 per month, then that is all you have to pay. And the credit report will show that you are current and paying according to terms.
This was explained to me by Dept of Education personnel at a bankruptcy seminar in December, 1998, right after the code changes took away the 7 year rule on student loans. In the example given at the seminar, if all you can afford to pay is $0, then pay $0 and you are current. |
| Gary | Thursday, January 13, 2000 - 10:55 am
Voightkampff: My entire case against Equifax revolved around their reporting of my student loans, and the resulting apeal based on the jury instruction of 20 U.S.C. 1080a(f)(2), stating, the credit reporting agencies could report for seven years, information about a borrowers defaulted student loan accounts with the U.S. Department of Education (DOE), from the first date the DOE reported them to Equifax. You said the code changes took that away, meaning what? The time frame has been lengthened? To what?
My student loans were discharged due to extreme hardship, ie.; no job, no home, no hope of employment.
For Kristi, you, and anyone else interested, something should be understood here:
If you use student loans to acquire a college degree, that you can now use to gain employment and make a substantial income with for the rest of your life, no court in the country will let you not pay those loans back. (Unless your like Belushi in Animal House and go to school for seven years without any chance of learning anything). |
| voigtkampff | Thursday, January 13, 2000 - 03:19 pm
Gary, the "code" change that I refer to is the Bankruptcy Code. In October or November, 1998 the code made it harder to discharge student loans. It used to be that nearly all student loans could be discharged, even without proving undue hardship, as long as 7 years had elapsed from when the payments first came due (aside from deferments, etc.). Sorry for the confusion. Should have realized that people would think FCRA when they saw a 7 year period.
I don't know about your "no court in the country" comment, but that is a fairly accurate statement of the law in my circuit. Never seen a reason to research other circuits.
I litigated a §523(a)(8) case about 2 years ago. My client had a bachelor's degree, a master's degree, and a law degree. Attorneys are not fun clients. With 3 degrees, he had a good sized student loan. The student loan organization settled before trial, and agreed to accept either $75 or $100 per month (I forget which) until it was paid off. That was better than the $1,000 or so that they were asking before. I am very inexperienced in this area, but I have read every published opinion in my circuit, and there have been some creative resolutions by judges. They do not just say Yay or Nay. They meet halfway sometimes. |
