Thursday, March 24, 2016

A Story of Student Loan Hell

Occasionally I receive emails from people who have read the blog wanting to share their stories or objecting to what I wrote about their case.    They are a poignant reminder that the legal issues we deal with affect real people.   When I write about a case, I am writing about the facts as found by the Court.   The story that comes out of the official court record may be very different from how the individuals involved saw it.   Today I received an email from a woman who offered to share her story about her 30 year ordeal with student loans.   I am reprinting it below as received except that I explained some of the abbreviations she used.  While I can't vouch for the accuracy of the account, I do believe that she is describing how it looks to her.   Here is a story of student loan hell from Florida:

Dear Bankruptcy Attorney:
I'm in Florida but all bankruptcies are thru the Federal court system.  I have old student loans (taken out 1981-1983) for a total of $8,000 at 9% interest ($720 per year for 10 years) thru the GSL program (which was not Stafford at the time).  The promissory note (“PN”) said the Department of Education (“DOE”), my bank and I had to be in agreement if the note was to be changed.  The PN said (on the back) that the loans even if not repaid in full should not go past 15 years in repayment.

Tuesday, March 22, 2016

Cases Demonstrate Multiple Ways to Leave Chapter 7

Paul Simon once said that there must be fifty ways to leave your lover.   Two recent cases show that as with failed romances, there are multiple ways to leave chapter 7.     In Torres v. Krueger (Matter of Krueger), No. 14-11135 (5th Cir. 1/19/16), the Fifth Circuit dismissed a chapter 7 case for “cause” under 11 U.S.C. §707(a), while in In re Karlinger-Smith, No. 15-10214 (Bankr. W.D. Tex. 1/26/16), Judge Tony Davis found that he could have involuntarily converted an individual debtor to chapter 11 but declined to do so. These cases illustrate the variety of ways in which a case filed under chapter 7 can leave that chapter. The opinions can be found here and here.