Social Security Garnished to Pay Student Loans

Student loan default is an epidemic problem among senior citizens. The default rate currently stands at over 12%, more than three percentage points higher than borrowers under 30 years old. According to the U.S. Treasury, more than 156,000 seniors had money taken from their monthly Social Security checks to pay delinquent student loans last year. In contrast, the number of …

Some Student Loans ARE Dischargeable

There are many myths surrounding the topic of discharging student loans in bankruptcy. Some say you can’t do it. Others say you can discharge student loans only if you can prove hardship. Still others say you can discharge private student loans, but not federal student loans. Wrong, wrong, and wrong. All debts are discharged in bankruptcy unless there is an …

Using Student Loans to Qualify for Chapter 7 Bankruptcy

In 2005, Congress changed the bankruptcy laws to include a new “means test” for consumer debtors. The purpose of the means test is to ensure that debtors are not “abusing” the bankruptcy system by unfairly discharging debts they can afford to repay. The means test is a gatekeeper for Chapter 7 bankruptcy and disqualifies certain high income debtors from Chapter …

When is Paying a Student Loan an Undue Hardship?

Section 523(a)(8) excepts federal and many private student loans from discharge in bankruptcy. The exception to the exception is when the debt will “impose an undue hardship on the debtor and the debtor’s dependents.” Unfortunately, Congress did not define “undue hardship” and left it to the federal courts to interpret its meaning. The legislative history of Section 523(a)(8) implies that …

Educational Debts that are Dischargeable in Bankruptcy

The general rule in bankruptcy is that a debtor is not able to discharge student loans absent a showing of undue hardship (a very difficult standard to meet in most courts). However, not every debt to a college or university is excepted from discharge. Some debts, like unpaid tuition, may qualify for discharge during bankruptcy. The bankruptcy discharge is very …

8 Ways Student Loan Debt Hampers the Housing Market

Many people who are considering filing Las Vegas bankruptcy have significant student loan debts. Often discharging these loans is an uphill slog, but there are benefits to bankruptcy, and talking to an experienced Las Vegas bankruptcy lawyer can help debtors know their options. Growing student debts, though, are having substantial consequences on the U.S. economy. In fact, the Los Angeles …

7 Ways to Reduce College Costs, Debt

Student loan debt is a growing problem for people considering Las Vegas bankruptcy, and the biggest news on that front is that the interest rate on subsidized Stafford loans doubled to 6.8 percent, which is where they were several years ago. We discussed the consequences here, primarily that someone starting college this fall and graduating in four years will pay …

6 Findings From the Urban Institute’s Study on Student Loan Debt

Many people who are considering filing Las Vegas bankruptcy have substantial student loan debts. Because the bankruptcy code does not treat student debtors very kindly, they face significant hurdles to making a fresh start. That does not mean bankruptcy is unhelpful or impossible, but it does mean that debtors need an experienced Las Vegas bankruptcy lawyer to help them navigate …

Discharging Student Loans in Bankruptcy

Student loan debt is estimated at over $1 trillion according to a recent article published by the New York Times. This figure is on the rise as loan interest and new debts increase the total. Current bankruptcy law provides that student loans are generally not dischargeable under any chapter of the bankruptcy code, unless the debtor can show that repayment …

8 Facts About Federal Student Loan Rehabilitation

According to the Department of Education, a federal student loan is considered in default if no payments have been made in 270 days. Between the last payment and default, the loan is considered delinquent. The penalties for a student loan default can be severe, and repaying the loan will be significantly more difficult. However, there is one option that you …