Can I get rid of student loans with bankruptcy?
The general rule is No, Private and Federally backed Student Loans are Non-Dischargeable in Bankruptcy unless you show all three of these elements below.
However, even if you don’t meet these requirements, there are still ways to help relieve your student loan debt through a chapter 13 bankruptcy.
- You are unable to maintain a standard of living. One thing you have to show is that if you were forced to repay your student loan debt, you wouldn’t even be able to maintain a minimal standard of living (pay rent/mortgage, pay utilities, buy groceries, etc.).
- You have experienced prolonged hardship. Next, you have to show that your ability to repay the student loans won’t change or improve in the coming year (you won’t have an increase in income or decrease in other expenses; you have a permanent or chronic medical condition).
- You have made “good faith” efforts to pay. Lastly, the Court wants to see that you have actually tried and failed to pay back the loans. So, for example, let’s say you have made tried to make minimum payments on the loans or you’ve even tried one of the federal government’s repayment plans – those efforts would be on your side in your argument that the debt should be discharged.
Don’t be fooled. Discharging student loan debt in bankruptcy is not automatic. If you file a bankruptcy, your attorney will then have to file a “sub-lawsuit” or adversary proceeding within your bankruptcy and directly sue the student loan company and state that you have met all of the above requirements. Then, most times, the Judge will decide whether you have or not and what relief he or she wants to grant you.
The good news is that it appears that more and more Judges and more and more student loan companies (including the federal government) are becoming sympathetic to those with lots of student loan debt. It’s no wonder things might finally start to change since student loan debt actually makes up for about $16.7 trillion of the total debt of Americans (Forbes).
Contact the Law Offices of Keith D. Collier now for your free in-office or phone consultation and let us tell you whether bankruptcy might be a good option for you.
In the last week I randomly pulled 10 new client files to look at how their credit score was affected by their bankruptcy. We pull credit reports using a service provided by a company called CIN Legal Dates Services. This company pulls date from credit bureaus to try and predict how a persons credit score will be affected after filing bankruptcy. Of the 10 cases I pulled only one had a negative affect. The other 9 had an average increase in the next year of over 80 points. Some increases were over 130 points. The one that had a negative prediction started with a 720 credit score and was predicated to take a 35 point drop to a 685. Even with filing chapter 7 bankruptcy this person still had a credit score higher than most of the people in the Untitled States.
So don’t believe everything you hear from people or read on the internet. Find out for yourself. We can pull your Credit Scores today using this service to see what your score could be after filing bankruptcy without having to first file you.
Chapter 13 Bankruptcy Plan of Reorganization
A chapter 13 bankruptcy plan is just that – a plan. It tells the court how much money you plan on sending to the court and when. It then describes who you propose to pay and how much you propose to pay them. Items like your house, car, IRS tax debt, property taxes and child support or alimony enjoy priority status will get paid before things like credit cards, repossession balances, or judgment creditors. The bankruptcy code only requires you to pay those creditors what you can afford to pay them and in many cases, that amount is very small.
At the Law Offices of Keith D. Collier, we have spent countless hours scouring the bankruptcy code, reading case law, and arguing in front of bankruptcy law judges to get you the lowest payment possible while still keeping the things that are important to you like your house and cars. Since we only practice bankruptcy law, we are always at the forefront of any new developments or emerging trends in the bankruptcy code so we can best use these new findings for our clients.
When you file chapter 13 or chapter 7 bankruptcy, you have basically thrown up a huge wall against your creditors. This huge wall is the bankruptcy code’s “automatic stay.” The automatic stay is essentially a federal injunction against any act to collect a debt. This means that your creditors cannot contact you, garnish wages, seize money in bank accounts, repossess vehicles or sell your house without first going to the bankruptcy court judge and explaining why. That’s where we come in. We are your representative in court. We file a plan with the court describing exactly how you intend on reorganizing your debt and then we go and enforce that plan.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy may help you stop garnishments, save your car, and save your home. Moreover, chapter 13 bankruptcy may help you consolidate all of your other debts such as credit cards, repossession balances, and IRS tax debt. Chapter 13 bankruptcy effectively helps you reorganize ALL OF YOUR DEBT to make payments more affordable. Chapter 13 bankruptcy is an especially powerful tool because it lets you prioritize what debts you really want or need to pay such as mortgage and car payments and then your other creditors will in many cases just be left with the “scraps”.
The Law Offices of Keith D. Collier is a law firm devoted exclusively to bankruptcy law. We have filed chapter 13s to stop wage garnishments and reduce the monthly household bills to make life more affordable. We have filed chapter 13s to stop the repossession of vehicles while the repo man’s tow truck idled menacingly in front of the home or place of employment. We have even filed chapter 13s to stop foreclosure sales merely moments before the sale of the home. Click on stop repossessions or stop foreclosures to learn more.
Choosing a Bankruptcy Attorney
Since chapter 13 bankruptcy lasts for three to five years, you must take great care in choosing a law firm to represent you because that law firm will be representing for the duration of that three to five year period. Here at the Law Offices of Keith D. Collier, we usually put our entire attorney’s fee inside the chapter 13 plan. This means that we get paid just like your mortgage or cars companies do – through the bankruptcy. This also means that if we are to get paid, you have to be successful in your bankruptcy. We have found that by aligning our interests with our client’s interests, both parties can work together to ensure your bankruptcy is a successful one. Unfortunately, many bankruptcy law firms will require a substantial down payment equal to more than a $1,000.00 and then they have less of an incentive to closely monitor your case and make sure it goes smoothly for you because they have less invested. We do things a little bit differently – if you don’t succeed, then we don’t succeed.
Contact our offices today to for a free phone or in-office consultation to see if chapter 13 bankruptcy can help you.
Are Debts Obtained Through Fraud Dischargeable in Bankruptcy?
Bankruptcy is a very powerful tool to get your financial house back in order. However, one type of debt that often proves confusing for clients is debt involving allegations of fraud. Many times clients want to file bankruptcy on a certain credit card or unsecured loan but believe that bankruptcy cannot help them because the creditor is accusing them of fraud. The client will then become fearful that the bankruptcy won’t help them, or, worse that the client may go to jail.
I can optimistically say that this is simply not true most of the time. The bankruptcy code states that most unsecured debt (with several important exceptions) is dischargeable. The code goes on to state that even where accusations of fraud may be present, the burden is on the creditor to come in and contest the bankruptcy to make sure that particular debt is not discharged through the bankruptcy. This is a rare situation and even when it does happen, the benefits of the bankruptcy still outweigh the draw backs.
While most bankruptcy attorneys simply err on the side of telling their clients that bankruptcy cannot help them because there are allegations of fraud, the Law Offices of Keith D. Collier will fully educate you on the risks and benefits associated with your filing. We will explain your best and worst case scenarios and explain how the code and case law may affect your case. We will then zealously represent you to make sure your rights are protected from big banks and aggressive creditors. At the Law Offices of Keith D. Collier, we practice in nothing but bankruptcy and believe in being on the cutting-edge of the law. Whether you have a simple or complex case, the Law Offices of Keith D. Collier can help you weather these difficult financial times.
Qualify for a Chapter 7 Using the “Business Debt Exception”
Chapter 7 bankruptcy is a powerful tool, one that can help you get out of debt quickly so that you can start to rebuild your financial foundation. However, many are told that they don’t qualify for a chapter 7 and this is normally because they make too much money. I am here to tell you that just because you make decent money doesn’t mean you don’t qualify for a chapter 7. In addition to the numerous avenues our firm can use to qualify for the chapter 7 under the means test, there is a commonly overlooked “loophole” called the “Business Debt Exception”.
This exception is designed to allow people who make decent money to still qualify for a chapter 7 as long as the majority of their debts stemmed from business debt or “non-consumer” debt. There has been a great debate in the bankruptcy world over what constitutes “non-consumer” debt and the list of what counts and what doesn’t is a long one indeed. You should speak to one of our knowledgeable, friendly bankruptcy attorneys to find out if your debt falls into this exception.
Too many times, I have met clients that were misinformed by other bankruptcy attorneys and lead to believe that the clients’ only option was to file a 5-year-long chapter 13 bankruptcy. While chapter 13 does have many, many advantages and can help you successfully reorganize your debt, why would you want to be in bankruptcy for 5 years if you can accomplish the same thing in as little as 4 – 6 months? Moreover, the bankruptcy code allows you to make “voluntary payments” after the conclusion of your chapter 7 so if you really want to repay a company or person you used to owe money to before the bankruptcy, the bankruptcy code allows that.
The bottom line is that if you want the most for your money and the best, most cutting-edge legal advice you can obtain, you need to be your own advocate and find the bankruptcy attorney that is right for you. The Law Offices of Keith D. Collier offers both free in-office and phone consultations. An attorney is standing by right now to answer all of your questions.
Government Shutdown to Affect 800,000 Workers
Just when you thought the economy was starting to pick up again, Washington politicians deal the American public another blow. This time it’s in the form of a government shutdown. Cnn.com, Foxnews.com and the Huffingtonpost.com are all reporting that the furloughs are set to affect over 800,000 federal workers that are deemed to be “non-essential”. Moreover, this comes at a time when the unemployment rate is close to stagnant. Experts at CnnMoney.com are predicting that while the stock market may not take a large hit, the American dollar will. This is will in turn lead an increase in the cost of overseas goods, most importantly – oil.
All of these furloughs and increases in prices mean only one thing for Florida citizens – less income and higher expenses. When you encounter financial trouble, you need to speak to someone with the knowledge and experience to help guide you through difficult financial situations. At the Law Offices of Keith D. Collier, we pride ourselves on remaining at the cutting edge of all bankruptcy law developments so as to better represent our clients.
Just yesterday, I spoke to a client that was convinced that she wouldn’t qualify for a chapter 7 bankruptcy because she thought she made too much money. She had spoken to several other bankruptcy attorneys prior to calling me who had also told her that she wouldn’t qualify and that she would need to be in a chapter 13 for the next five years, repaying some of her debt. After having a free 30 minutes phone consultation, I learned that she might qualify under the little known “business debt exception”. To learn more about the “business debt exception”, click here. It turns out that she did qualify and because she called the Law Offices of Keith D. Collier, she is now on her way to financial recovery.
Get Out of Debt With Your Federal Income Tax Refund
Every year millions of Americans receive their federal income tax refund for many things from property taxes, automobile and homeowner’s insurance, medical procedures to vacations, electronics and theme parks. This year, however, the IRS is reporting that the processing of federal income tax refunds will be delayed due to the government shutdown. CNN is reporting that the processing of new returns will be delayed one to two weeks thus further delaying receipt of your tax refund!
If you’re in debt and want to clean up your credit, save a house or vehicle or just are sick and tired of the phone calls from debt collectors, then call The Law Offices of Keith D. Collier and use your refund to get out of debt. The New Year can bring you more of the same harassment from creditors, sleepless nights worrying about repossession, or fear of foreclosure on your home. Or, you can take the initiative and do something about it by getting “your financial house” in order.
Using your tax refund to get out of debt is a legal use of your income tax refund and can help you get a leg up on the New Year and start it out right. Call the Law Offices of Keith D. Collier today for a free consultation to learn how.