Tag Archives: bankruptcy

What Happens to Student Loans in Bankruptcy?

Graduate - Gril holding signIn most instances, the obligation remains to repay student loans despite filing Chapter 7 or Chapter 13 bankruptcy.

During a bankruptcy case, the debtor is exempt from collection on the student loan, this is called an Automatic Stay. The automatic stay immediately goes into effect upon the filing of the bankruptcy petition and prevents collectors from taking any action against the debtor to collect.

Interest continues to build, even during a pending bankruptcy. As a result, the ultimate balance for a student loan is higher with additional interest.  In some situations, the interest on the loan may be excused.  The type of bankruptcy filed combined with other factors determine whether interest is forgiven. Chapter 7 and Chapter 13 bankruptcies treat student loans differently.

In a Chapter 7 bankruptcy, a debtor’s assets are sold, and debts are paid from sales proceeds in accordance with a priority system of seniority. The priority scheme is set in the bankruptcy code and based upon the order of liens, rather than preferences of the debtor. The most senior debts may be the only debts repaid due to the larger number of debts compared to asset sale proceeds. Student loans are often classified as senior debts and are paid in first priority.

In Chapter 13, debtors enter into a reorganization plan and make payments over several years to repay a percentage of total debts. The Chapter 13 plan establishes new terms for the repayment of debts, and lenders must consent to the plan’s terms. While a complete discharge of a student loan is nearly impossible, it is probable that the loan will be restructured through the bankruptcy plan, and the borrower’s payments each month will be lowered to a more affordable sum.

While it would be nice to have Chapter 7 or 13 bankruptcy eliminate outstanding student loan debt, total discharge of that debt seldom occurs.  More often, student loans are paid first as senior debts or paid through installments in Chapter 13.

*from a recent blog at attorneys.com

 

Find Bankruptcy Data

Our Bankruptcy file provides robust and comprehensive data including the most current data available combined with rich history as our records date back to 2002. We compile our database, which is over 20 million records today and contains a wide array of information such as filing dates, dismissals, discharges, Chapter 7 and Chapter 13.

Student Loans & Bankruptcy

Graduate - Gril holding signHere’s an interesting article from CREDIT.COM regarding Student Loans and Bankruptcy written by Constance Brinkley-Badgett.

The belief that student loans are never dischargeable in bankruptcy is, simply put, not true. Student loans can be discharged in some limited cases. In fact, according to a study published in 2011 by Jason Iuliano, a student at the Woodrow Wilson School of Public and International Affairs at Princeton University, at least 40% of borrowers who include their student loans in their bankruptcy filing end up with some or all Read More…

Banks resubmit bankruptcy contingency plans

Federal banking regulators said the nation’s 12 largest banks have resubmitted plans for navigating a bankruptcy that would not require a taxpayer bailout.

This marks the third time the banks have been forced to refile their plans, which outline their strategy for a rapid and orderly bankruptcy as required by the Dodd-Frank Wall Street Reform and Consumer Protection ActRead More


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Consumer Bankruptcy Filings Inch Up

The number of new bankruptcy filings made last month was up minimally on a month-over-month basis, though activity slowed from a year earlier.

Businesses and consumers made 69,723 bankruptcy filings during June. Activity crept up from the previous month, when there were 69,286 fillings.

But despite the modest deterioration, U.S. Bankruptcy Courts were hit with fewer filings than in June 2014, when the total was 73,855.  Read More

Personal BK in a Post-ACA World

The U.S. Supreme Court just put its stamp of approval on the Obama administration’s health-care reform, and a Boston law professor thinks he knows what will happen next.

In his 2014 study, Northeastern University law professor Daniel Austin dug into personal bankruptcy filings to figure out what happened after Massachusetts lawmakers made health insurance mandatory in 2005.

His findings? Massachusetts residents who file for bankruptcy protection these days have way less medical debt compared to the rest of the country. The typical Massachusetts person or couple who filed in 2013 had $3,041 in medical debt, while people everywhere else had an average of $8,594 in medical debt.  Read More

Can You Discharge Student Loans?

BEBdata Consumer Bankruptcy ListCredit.com news wrote an interesting blog entitled, “Can You Discharge Private Students Loans in Bankruptcy”.

There’s a big misconception that private student loans can never be discharged in bankruptcy. People have repeated that statement so often they believe it to be a fact. The only problem is it’s not quite true.

Some private student loans are clearly eligible to be wiped away in a consumer bankruptcy. Even in a Chapter 7 bankruptcy, it takes only about 90 days to forgive the debt tax-free.

And while these special rules apply to private student loans that meet some criteria, all private students loans are no longer legally collectible once they have expired under the statute of limitations in your state… read more.

 

ANNUAL FILINGS REVIEW 2013/2014

2013/2014 Consumer BK ComparisonDuring the 12-month period ending December 31, 2014, 936,795 cases were filed in federal bankruptcy courts, down from the 1,071,932 bankruptcy cases filed in calendar year 2013—a 12.6 percent drop in filings.

SUCCESSFUL NADA 2015

Everybody is back from a great show in San Francisco, CA.  NADA (National Auto Dealers Association) 2015 was fantastic and it was great to see so many of our valued clients in one place.  Thanks to everyone that made this year’s NADA 2015 one of the best yet!

Don’t forget that NADA is moving the convention date in 2016, breaking from the traditional January/February timeframe.  The 2016 NADA Convention will be held in Las Vegas, Nevada from March 31 – April 3rd.  Hope to see you there!

BEBdata at 2015 NADA.  Cool  RobotBEBdata at 2015 NADA - Force Marketing Booth

 

 

 

 

 

 

Ro Royall, Ann Frank-Shantz and Ron Royall at the 2015 NADA Conference

Ro Royall, Ann Frank-Shantz and Ron Royall at the 2015 NADA Conference