Tag Archives: bankruptcy

pay attention to bankruptcy

I wish more people would pay attention to bankruptcy.  Just because someone has advice to give, doesn’t mean it’s worth saying.
Voy7, or anybody else with valid advice: is there any hope if a guy has $40,000+ of school loan debt, majority is being serviced through Sally Mae with a minority from private lenders.  I can’t provide too much information, as I don’t know my friend’s entire situation… but I know he hasn’t made a payment in two years, they’re pissed, and he has such a small income there’s no way to even attempt it. (Sally Mae’s minimum payment is about 50%+ of his monthly income, which is already being spent at 100%.) Bankruptcy affects a lot of us.
Aside from budget ideas and helping him find a better job… Any ideas?  I don’t think bankruptcy is ideal, but the stress of this is causing him serious physical issues (migraines).  I’m not sure what to tell him.  Any ideas are greatly appreciated.
The reason I ask: the law firm that I found locally that helps negotiate debt and will help with bankruptcy said if it’s student loan debt they can’t help.  So, I am not sure what is so different about student loan debt. Student loan can be cancelled if person becomes permanently and totally disabled. Also Stafford, PLUS, and SLS loans disbursed after January 1,1986, can be canceled under two other circumstances: The school you attended improperly certified your ability to benefit from the training given, or the school you attended closed while you were in attendance or within 90 days after you withdrew from the bankruptcy school according to http://infospeak.org/?p=95 and http://bnkut.com
In addition to the above four reasons, a National Defense Student Loan can be canceled if you enter into full-time teaching or military service. A National Direct Student Loan and a Perkins Loan can be at least partially canceled under two more additional circumstances: becoming a Head Start Program Staff Member or a Peace Corps Volunteer. Sounds nice in theory, Voy7, and glad you shared the code. Are you an actual US lawyer or do you just play one here on TV? You can obviously Google the bankruptcy code and copy and paste…so I guess that entitles you to dis people for simply trying help, eh?
Here’s something irrefutably valid…filing for chapter 7 as an individual and getting approved for it are 2 entirely different things. Learn about bankruptcy at https://erinjgz.wordpress.com/2015/10/11/learning-about-bankruptcy-in-2015/
The determination to let somebody do a chapter 7 is ultimately made by a judge and the reality is far fewer individual filers have been permitted to use chapter 7 since the rules were amended.  Cases where personal and business debt has been intermingled or where someone borrowed money personally (such as from an equity line/loan) to use for a business can often have an easier time getting a judge to go along. At least that’s the way it’s been in my area…which is why I shared it. That doesn’t mean that’s the way it is elsewhere.  
The trend since the amended rules is that an individual debtor is going to be forced into some type of payment arrangement with their creditors and not permitted to use “the magic eraser” chapter 7 provides…which is one of the primary reasons the rules were changed in the first placeā€¦this is how bankruptcy affects people.