There are many sad stories of people going into significant debt to finance their education. Then, they graduate and cannot find a job or get laid off. This spells potential doom if the amount of debt is too high and they cannot recover their earning power promptly.
I have many clients with significant student loan debt and it would be nice if it were easy to discharge that debt in bankruptcy along with their other unsecured debts. Unfortunately, it is not. Any attempt at discharging student loans in bankruptcy is a difficult and uphill struggle to say the least. There are numerous potential pitfalls, including the possibility that you may end up with a sufficiently larger tab then when you started.
An interesting case having to do with student loans occurred in Wisconsin recently, in In re Dustin John Busson-Sokolik, the debtor tried to discharge a student loan debt of $3,000 that he owed to the Milwaukee School of Engineering directly. The Bankruptcy court ruled against the debtor and found that the debtor owed $16,248.78 to the school, an amount that included costs and attorney fees. In the ruling, the court found that the actual use of the money that was lent to the student is not relevant, the important aspect is that the purpose of the loan was for education.
This is where the debtor and the debtor’s attorney should have chosen to cut their losses and just live with the bankruptcy court’s decision. Instead, they appealed the bankruptcy court’s decision to the district court, the district court ruled that the appeal was frivolous and not only affirmed the bankruptcy court’s ruling but extended it to $80,269 and made the debtor’s attorney jointly and severally liable for $61,249.50 of it!
The Seventh Circuit Court of Appeals later affirmed the ruling but reduced the total amount owed to $51,417.77, with the debtor’s attorney still jointly and severally liable for $30,971 of that amount.
Once again, the lesson to be learned is that sometimes it is better to cut your losses. Also, whenever you are trying to discharge a student loan debt, be very careful because you will face a potentially dangerous battle that could make your problems (and debts) worse. Make sure that you consult with a knowledgeable bankruptcy attorney who can advise you of the likelihood of success and whether it is a path you want to take.
If you live in the Phoenix, Arizona area and would like a consultation regarding your particular set of circumstances, give us a call at 866-703-3287 for a free consultation with an attorney at Wright Law Offices.
Why should you hire our firm to represent you in bankruptcy?
Great question. Here are a few reasons:
- 1. Bankruptcy is our sole area of practice. Attorney Wright has over 10 years of experience in the field of bankruptcy and has helped over 1000 people successfully file.
- 2. Attorney Wright has an accounting background that is useful in analyzing complex financial documents. Prior to law school he obtained a degree in accounting from the University of Wisconsin School of Business. He exercised his strong numerical aptitude in the field of accounting, including several years with The Kohler Co., before ultimately deciding to pursue a law degree.
- 3. New clients meet with an attorney during their first visit. We understand your time is valuable. It is important your questions are answered quickly and accurately so you can take appropriate steps to secure a better financial future and eliminate fear and stress.
4. In business, referrals are the highest form of professional compliment. We frequently receive referrals from other lawyers and previous clients.
- 5. Our firm is small which enables us to focus on quality over quantity. We don’t have billboards on the I-10 or banners affixed to public transportation. Our approach is a bit more understated. We care about people and doing things right and it shows in our low employee turnover and positive reviews.
- 6. Perhaps the most important consideration is the cost of filing bankruptcy. We continuously assess our fees to ensure we offer fair and competitive pricing. We want to offer you a deal without sacrificing the quality of your experience.
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Mr. Wright and his staff were amazing. They made a negative situation a lot better and turned it into a positive. Could really tell they care helping people and I will refer their Phoenix Bankruptcy Attorney firm to friends and family. Thanks again.
I called around looking for the right bankruptcy lawyer and came across Benjamin Wright. He personally called me for the consultation seeing how I live in Kingman AZ. He was very helpful from the start and his staff was very friendly and explained any questions I had, sorry for all the questions. I would definitely recommend Wright law offices, and I do!! Thanks for everything, you made what seemed like a hard thing to do simple!! You guys rock!!!
Great lawyer, he really helped my mother out of a jam. She was totally new to bankruptcy and he talked with us for about an hour and a half to make sure she wouldn’t be worried.
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I had a very positive experience with Attorney Wright. He or his staff returned my e-mails and calls promptly (even after business hours occasionally). His fees were reasonable. He was patient with me when I showed up in court missing an important document. He is aggressive, but fair and nice.