Ten years ago this month the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) became effective. The act was designed to make filing bankruptcy more difficult by requiring filers to provide more information to court trustees that supervise the process and by installing a mathematical formula to keep higher income debtors out of chapter 7.
Private Student Loans are the single worst debt in existence. They lack any formal Income Based Repayment (“IBR”) plans and the debts are generally not discharged in bankruptcy without undergoing expensive litigation and claiming a special hardship. In recent years, the National Collegiate Student Loan Trust, the largest holder of private student loans, has filed
As the old saying goes, if you don’t use it you lose it. The “it” in this case is the right to sue someone for an unpaid debt. Every state has a set of laws that create a deadline for creditors to sue for an unpaid debt. In Nebraska there are two key laws that
On February 25, 2015, the Nebraska bankruptcy court issued a new student loan opinion that should lift the hopes of debtors overburdened by student loans. See In re DeLaet, Case #13-04032.
What is striking about this opinion is that the court granted a discharge of student loans to a relatively young debtor in good
New York attorney Austin C. Smith writes an important article in the American Bankruptcy Institute under the heading The Misinterpretation of 11 U.S.C. 523(a)(8) suggesting that federal courts have been misapplying the student loan exception to discharge since 1990.
Section 523(8) of the Bankruptcy Code provides that bankruptcy does not discharge an individual debtor from
Obtaining a discharge of student loans is a rare occurrence these days, and when the loans in question are exclusively Federal loans, the chances of discharging the debt are slim. The Nebraska bankruptcy court reinforced that reality in an opinion issued on January 8th. See In Re Harris, Adversary Case #14-4001.
The 8th Circuit Bankruptcy Appellate Panel denied Kathryn Nielen’s application to discharge her student loans, and the result, although discouraging in many respects, is not all that surprising. (Nielsen vs. ACS Inc, No. 13-6034, 8th BAP 2014) The debtor graduated high school in 1995 and went on to obtain an Associates of Science degree in
The Nebraska Bankruptcy Court has ruled that a $40,913 federal student loan owed by a 67 year old debtor whose sole source of income was from Social Security retirement in the amount of $830 per month should be discharged. In re Grimes, Case #06-81303 (2013). In coming to its decision, the court
There has been a definite change in the attitude of bankruptcy courts are taking towards the discharge of student loans in bankruptcy. I am reading cases throughout the nation that indicate a greater willingness of the Courts to discharge these debts. A case affecting debtors in Nebraska with student loan debt underscore this recent change
Reading the opinion just issued by the Bankruptcy Appellate Panel for the 8th Circuit in the case of Shaffer vs. Iowa Student Loan Liquidity Corporation, I am wondering if we are now witnessing a greater willingness of the bankruptcy courts to discharge student loans.
Susan Shaffer is a single woman in her 30s