Archive for 'Bankruptcy'

Senate Introduces Private Student Loan Debt Legislation

Tuesday, January 29th, 2013 at 5:59 pm  
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Senators Dick Durbin (D-IL), Tom Harkin (D-IA) and Al Franken (D-MN) have introduced the Fairness for Struggling Students Act of 2013. According to a press release issued by Senator Durbin, the bill seeks to reverse a 2005 change to bankruptcy laws that prevented private student loans from being discharged in bankruptcy proceedings. While government issued or government guaranteed student loans have long been protected in a bankruptcy, meaning that bankrupt borrowers were still responsible for repayment, until 2005 private student loans were treated like other types of debt. According to Durbin’s office, “In 2005, the law was unjustifiably changed to give private student loans the same privileged bankruptcy treatment as government loans, even though private student loans have vastly different terms and fewer consumer protections.”

According to the Huffington Post, among those organizations that support the bill are the American Association of University Women, the Consumer Financial Protection Bureau, the U.S. Department of Education, and Sallie Mae.

The bill was introduced in the previous Congress, but failed to pass out of committee.

Student Loan Debt Discharged

Saturday, August 4th, 2012 at 5:00 am  
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According to a report in the New York Law Journal, a “once in a blue moon” phenomena occurred: a bankruptcy judge discharged a student loan debt. Typically, student loans aren’t dischargeable in bankruptcy proceedings. In this case however, a 64-year-old woman took out $16,900 worth of student loans a quarter of a century ago, but was never able to complete her education because she had to care for her ill parents. The judge found that the consumer, who had been laid off from an $11 per hour assembly line job, would never be able to repay student loan debt, which with interest totaled over $56,000, and discharged it in bankruptcy.

How Bankruptcy Can Stop Debt Collectors and Give You a Fresh Start

Tuesday, May 8th, 2012 at 11:41 am  
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The following guest post is written by Atlanta Bankruptcy Attorney Will Geer, whose firm helps consumers and small businesses file bankruptcy to overcome unmanageable debt.

Debt collectors are the scourges of society in my book. Who would call an elderly woman struggling to feed herself on Social Security and tell her that if she doesn’t pay her past due medical bills, the hospital will take all her Social Security money and force her into a nursing home to die? A debt collector would, and this story was told to me by a very real client.

In the above situation, the debt collector would most certainly be liable for significant damages under the federal law known as the Fair Debt Collection Practices Act. But sometimes, there are just too many creditors knocking at your door to want to fight that battle over and over again.

Fortunately, there exists a solution to your debt problems that is fully endorsed by the U.S. Government. That solution is found in Title 11 of the U.S. Code, otherwise known as the Bankruptcy Code. Each year, millions of Americans file bankruptcy to achieve a fresh start and obtain freedom from overwhelming debt.

You may ask how bankruptcy can actually stop the creditors from calling. When a person files bankruptcy, something called the “automatic stay” goes into effect that does just what its name implies. It “stays” all creditor collection activity against the newly filed debtor. Collection activity includes everything you could think of regarding creditor action against you, including all forms of communication (phone calls, letters, emails, etc.), garnishments, repossessions, and foreclosures.

Regardless of whether you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you will receive a discharge shortly before your case is closed, meaning that all the debts you owed prior to filing bankruptcy will be wiped out. The only exceptions are a few debts Congress felt should not be dischargeable, such as student loans, DUI fines, debt incurred by fraud, and certain tax obligations.

Not only that, but subsequent to filing, a permanent injunction is put into place, meaning that none of your creditors from before you filed can ever contact you again regarding your debts.

Hopefully this information will give you some comfort in knowing that a solution to your debt problems does exist, whether it is fighting debts you truly do not owe or filing bankruptcy to obtain a fresh start on life.

Bankruptcy is not for everybody, and only an experienced attorney specializing in bankruptcy law can advise you whether or not filing for bankruptcy relief is the appropriate solution to your debt problems.

Seniors Especially Hard Hit by Debt, Bankruptcy

Wednesday, September 9th, 2009 at 6:01 pm  
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A recent Associated Press article highlights the fact that the economic crisis is hitting retirees and seniors especially hard. Citing AARP statistics, the story reported that people 55 and older made up almost a quarter of the bankruptcy filings in 2007, and that bankruptcy rates quadrupled for seniors ages 75 to 84. Medical bills, the leading cause of bankruptcy, is largely to blame, but the stock market’s nosedive has left many retirees with a withered nest egg.