Skirting the Scarcity of Student Loan Debt Help Through Bankruptcy in Indiana

October 1, 2012 12:39 pm Published by

This is the third story from Consumer Bankruptcy News, the journal whichi keeps me informed of all the court cases that have to do with individual bankruptcy in Indiana and all across the country. I’m sharing the rulings with my Bankruptcy in Indiana readers to help clarify the principles behind bankruptcy law and the way in which the law actually works.

The bankruptcy “tool” is designed to help eliminate unsecured debts. But the bottom line is that bankruptcy, just like any other tool, cannot fix every problem for every debtor. Student loan debt help is one area in which only is filing personal bankruptcy in Indiana ever of help. (From my point of view as an Indiana bankruptcy attorney, the sooner in the process a client sits down with me and goes over all the facts and all the possible strategies, the more help I am going to be able to provide.)

With  Zuckerberg bankruptcy offices in five Indiana college towns (Indianapolis, Anderson, Bloomington, Richmond, and Columbus), I was particularly inspired by the case of Susan Krieger in Illinois.  The Krieger case, in a sad sort of way, is a bankruptcy “success story”. It’s also an exception, yet there are several important lessons I want to share with Bankruptcy in Indiana readers about it.

 

  • Susan owned $26,000.in student loans. 
     
  • For ten years, Susan had unsuccessfully looked for a position as a paralegal (her education had been in legal studies).
     
  • She had exhausted her savings, finally moving in with her 74-year old mother.  Susan was living on $200 a month in state assistance benefits.
     
  • Susan filed bankruptcy Chapter 7, asking the bankruptcy court to discharge her student loans along with her other obligations.
     
  • The court agreed to discharge her student loans. Why? Krieger satisfied all three parts of the “Brunner test”: a) Repaying the student loan would impose undue hardship, meaning that she  could not make payments and still maintain a minimum standard of living.  b) Her current financial situation is likely to continue for a significant portion of the repayment period.  c) She had persistently tried to find work but lived in a less populated area where opportunities for a paralegal hardly existed.

As an Indiana bankruptcy attorney and debt consolidation lawyer, I offer student loan debt help.  Recently there's been a lot of debate about whether student loans should be treated the same as other consumer debt when it comes to bankruptcy. While some measures were passed extending repayment time for parents, student loan debt in Indiana  is a big problem getting bigger all the time.

     That is not to say that filing personal bankruptcy in Indiana is of no help to most people who
     are burdened with student loans. All of our bankruptcy attorneys agree – because many
     kinds of debt can, in fact, qualify to be discharged through bankruptcy, that frees up money
     to deal with those debts that do not.

In the Krieger case, the bankruptcy court found a “certainty of hopelessness” that is hardly ever ruled with student loan debt.  But, after more than 25 years and 30,000 clients, as an Indiana bankruptcy attorney, what I see about bankruptcy in general is a “certainty of hope”!

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This post was written by Mark Zuckerberg

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