District Court Denies Debtor Discharge of Student Loans: Appellate Panel Says ‘Not So Fast’! We’re following a potentially important bankruptcy case in 2013 that may affect the ability of individuals to discharge student loan debts in bankruptcy. On August 21, 2013, the U.S. Bankruptcy Appellate Panel for the Eighth Circuit (B.A.P.) reversed and remanded a decision of the U.S. Bankruptcy Court for the Eastern District of Missouri which denied a discharge of a debtor’s student loan debt. The B.A.P. found that denying the debtor a discharge of her student loan debts to National Collegiate Trust was an undue hardship on the debtor and remanded the decision to the Bankruptcy Court to look at each individual loan owed to National Collegiate Trust to determine if the debtor could pay any one or more of those loans owed over the course of a year. The Debtor in this case did not seem…
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A question that often comes up when we speak with clients is how to tackle student loans when it comes to bankruptcy. Oftentimes, a young family is swimming in debt, a significant amount of which is in the form of student loans. A recent article in on CNN Money brought to light just how dire the student loan situation has become. According to the article, the average student loan debt of a person who graduated in May 2013 was $35,200. For many, this debt is manageable until they get married and now have two combined student loan payments, plus a mortgage, plus medical bills, etc. Student loans have their own set of requirements when it comes to bankruptcy. Loan companies are not going to easily forgive the debt of student loans. Below, you will find a few things to consider when trying to recover from the mounting debt of college…
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KANSAS CITY, Mo., Aug. 20, 2013 /PRNewswire/ — The United States Bankruptcy Court for the Western District of Missouri entered an Order on May 29, 2013 approving a settlement for a Missouri woman owing more than $400,000.00 in student loans. Per the settlement the woman is entitled to receive a bankruptcy discharge of up to $325,000.00 of student loans. The holders of the student loan debt were Suntrust Bank and Educational Management Corp. Our client agreed to a repayment schedule of approximately 25% of the balance over a ten (10) year period of time. Upon successful completion of the partial repayment, the entire balance will be discharged. Neil Sader and Megan Dennis of The Sader Law Firm represented this client. Sader stated, “While student loans generally are not dischargeable in bankruptcy, there is a hardship provision which can be used in certain deserving circumstances.” The client in this case was…
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