WITH STUDENT LOANS IN BANKRUPTCY, THE FACTS DETERMINE THE LAW
PART THREE OF THREE
By Jay Weller
Many Articles found in the mainstream media references Student Loans in Bankruptcy decry the difficulty of Discharging such Student Loans. However, in reality, many Student Loans can be Discharged in Bankruptcy, but the Debtors do not seek such relief that they may be eligible.
A Study by Jason Juliano, possessor of a Juris Doctorate from Harvard Law School and PhD Student in Politics at Princeton, found that approximately 40% of those who sought to Discharge their Student Loans in Bankruptcy were successful. However, most of the persons, 99.9%, filing Bankruptcy with Student Loan Debt never seek to Discharge their Student Loans.
Furthermore, Juliano found that Debtors who successfully Discharged their Student Loans in Bankruptcy were less likely to be employed, more likely to have a physical hardship and more likely to have lower incomes the year before they filed for Bankruptcy.
Of 169,774 Student Loan Debtors who filed Bankruptcy in 2007, only 213 Debtors filed Adversary Proceedings seeking the Discharge of their Student Loan Debt and 169,557 sought the Discharge of their Student Loan Debt but did not file an Adversary Proceeding. The Debtors that did not file an Adversary Proceeding but sought the Discharge of Student Loan Debt probably are persons on some form of Disability, where a Court such as in Social Security Disability Cases, has prior adjudged that the Debtor is Disabled, and unable to work.
Of the 213 Debtors who filed Adversary Proceedings seeking the Discharge of their Student Loan Debt in Bankruptcy, 51 received a Full Discharge, 30 received a Partial Discharge, 25 received some form of Administrative Relief, and 107 received no Discharge or No Relief.
The Student Loans represented in Juliano’s Study represented approximately 71.2 of all Student Loans.
Jay Weller is a Bankruptcy Attorney and the Founder and President of Weller Legal Group. Weller Legal Group represents only Debtors in Bankruptcy Proceedings, and other Debt Related Issues. Weller Legal Group has Offices in Clearwater, Port Richey and Lakeland, Florida.
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