the7thirteen

Crocker Case Cracks Notion That Private Student Loans Can’t Be Discharged in Bankruptcy Photo above by James Wheeler from Pexels.   (The horrible pun above the photo is the author’s,  and is not the fault of James Wheeler.) Even people who know nothing about bankruptcy know that student loans are almost impossible to discharge in bankruptcy.   This is unfortunate, since bankruptcy is the system charged with giving individuals relief from crushing debt and granting them a fresh start.   The national student loan debt exceeds $1.5 trillion.   This affects young people, of course, but more than 3 million senior citizens in the U.S. also have student loans.   By any standard, this is an emerging crisis , and it has become a major issue in the 2020 presidential campaign .   To this point, bankruptcy has provided very little relief to individuals struggling with student loan debt.   The Fifth Circuit Court of Appeals is a federal court covering Louisiana, Mississippi

I’m fascinated by bad or corny television commercials.   Some are downright charming .    I’m mesmerized by the underwater-motion and creepy interaction common to pharmaceutical commercials.   And who hasn’t been jarred from a peaceful couch nap by shouted announcements of Big Big RV sales or drag races (“Sunday! Sunday! Sunday!”)?   Naturally I’m intrigued by the seemingly endless parade of “debt settlement” offers. Surely you’ve seen these commercials too.   They might begin with ominous music and actors in crisis, similar to many tax relief commercials.   Or they might open with some good news: “As a result of today’s economic crisis, banks are willing to accept significantly less than you owe!”   Either way, they want to let you know: “If you owe more than $10,000 in credit card debt, our specialists will show you how you can lower your monthly payments, reduce or eliminate your debt, and get your life back on track.” A “real person” will then tell you: “I cut my payment

Photo: Thanks to Aron Visuals Can we can all agree that Sauron, a character in J. R. R. Tolkien’s Lord of the Rings fantasy books, was not a very nice guy?   It’s fortunate he wasn’t better organized.   Sauron's plan for Middle-Earth conquest involved passing out 19 different rings of power to various elves, dwarves and humans.   Sauron then held back the “One Ring” that he intended to use in order to control the other 19 and … lost it.   There are many take-aways here.   “Simple” does not always equate to “well-organized.”   If Sauron lived in modern times, I am sure he would’ve used the same password for all his email and online accounts.   Organization is an important part of success, whether you are trying to conquer mythical worlds, or just trying to complete a Chapter 13 bankruptcy plan.   As discussed in a recent post , it is important to know which creditors are covered by Chapter 13 plan payments, and which ones must continue to be paid separately.   If you

“How Much Are Chapter 13 Payments?” Thanks to Jean-Christopher Andr é  for this amazing photo,  from Tiniteqilaaq, Greenland. It’s critical to know the amount of your Chapter 13 payment each month, but that’s just the tip of the iceberg.   For your Chapter 13 case to be successful, you need to know why your Chapter 13 payment adds up to that amount ­ — and what that amount does and does not cover.   Here are two frequently heard quotes that show how confusion can result from a lack of understanding: 1. Debtor says to Lawyer: “My Chapter 13 payment is $500 per month.   Why is my payment so expensive?   My friend’s payment is only $200 per month!” There is obvious confusion here about the different components that make up a plan payment.  Here are some common items that can affect the plan payment: Car payments.   If your plan is paying debt on one or more cars, this can easily add to the amount that you will be required to pay to the Trustee.  These claims

NOTE: This post was updated on September 17, 2019 to include changes made by the HAVEN Act. Which of these statements about veterans’ benefits are true? 1. Veterans’ benefits are 100% exempt in bankruptcy. 2. Veterans’ benefits can be seized by creditors or the Trustee in bankruptcy. 3. You can lose your VA benefits if you file for bankruptcy. 4. Veterans’ benefits don’t even need to be listed in your bankruptcy case. 5. Veterans’ benefits are classified as “income” that can be used to pay creditors in a Chapter 13 case. Three of the statements (#2, #3 and #4) are totally false.   Statement #1 is true.  Statement #5 is partially true, depending on the exact nature of the benefit.   If you're confused, read on.   THE RIGHT TO RECEIVE VETERANS’ BENEFITS ARE PROTECTED.   Section 522(d) of the Bankruptcy Code lists the property that a debtor can exempt from creditors under federal law, and includes a debtor’s “right to receive . . . a veteran’s benefit[.]”   Sim

To assist you in celebrating this extremely minor (and possibly fictional) holiday: Seven Facts About Chapter 7 ONE:  Chapter 7 is the “liquidation” option under the U.S. Bankruptcy Code.   Virtually any human being can file a Chapter 7 bankruptcy petition.   You will need to have some basis for venue, of course, but there are no age or citizenship limitations.   After amendments in 2005, some individuals may have their Chapter 7 petitions challenged as abusive, if they are deemed to make too much money.   Railroads and most types of banks and insurance companies are barred from filing Chapter 7 TWO:  When a Chapter 7 case is filed, a Trustee is appointed.   The Chapter 7 Trustee receives a commission on any funds paid to creditors.   What if, as in the vast majority of cases, there are no funds to distribute?   The Trustee receives $60 from the bankruptcy filing fee (unless the filing fee is waived by the Court).   When the Bankruptcy Act of 1898 was enacted, the Trustee

“I Didn’t File Bankruptcy On That!” Nonlawyers sometimes use bankruptcy phrases that don’t have parallels in the Bankruptcy Code or in actual practice.  Here are some examples: “Thrown into bankruptcy.”   This phrase is probably a leftover from the distant memory of English debtors’ prisons.   It is possible to be figuratively “thrown into” a Chapter 7 or Chapter 11 bankruptcy using a complicated and arcane tactic known as an “involuntary” petition.   It usually requires three or more creditors to join together and file a petition against someone else.   It is not to be embarked upon lightly and involves no actual throwing, tossing or defenestration.   The vast majority of bankruptcy cases – and all Chapter 13 cases – are filed voluntarily.   Can you throw yourself into bankruptcy?   It sounds physically impossible.  One bad cliché deserves another, so remember that it’s always best to look before you leap.   If you are considering bankruptcy, start by wading in.   Tal