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Due to recent changes  the process of applying for relief from student loan debt in bankruptcy has become much easier. Previously debtors had to have this decided by having a lengthy motion in front of the Judge. Now the debtor can apply by filling out a form that is sent to the Department of Justice which then makes a recommendation to the Court. This new process will apply to all “DOE-held” federal loans. A student loan can be discharged in bankruptcy in certain circumstances. Generally, a student loan will not be discharged in bankruptcy unless the borrower can demonstrate that […]

In the case of  In re Jesslyn Anderson,    F3d    (9th Circuit Court of Appeals 3/1/21), appeal number 20-60014  the chapter 7 debtor was allowed to retain her homestead exemption even if she moves out of the house after the filing of the bankruptcy and does not reoccupy or file a declaration of abandonment within 6 months after vacating the house. Even though this case was decided in the debtor’s favor,  if you are considering filing for bankruptcy and moving out of your house you should consult with an experienced bankruptcy attorney before reaching a decision.  Every case is unique and what […]

The United States Constitution states: “[The Congress shall have Power] to establish . . . uniform laws on the subject of Bankruptcies throughout the United States.”  The Framers of the Constitution wanted to make sure there would be a uniform bankruptcy system so that one State would not put someone in debtor’s  prison for a debt that was discharged in another State.  While we don’t have debtor’s prisons anymore, a high load of debt can certainly feel like you are not free to move forward with your life.  If your debt feels like it is getting out of control it […]

The United State District Court  Western District of Washington responded back in March of 2020 to the COVID-19 crisis by setting up procedures which in bankruptcy cases allowed debtors to make their appearances remotely.    On May 13, 2020 the Chief United States District Judge for United States District Court of the Western District of Washington further extended the proceedings under which remote appearances are allowed.   In bankruptcy chapter 7 cases this means that for the time being debtors are appearing by telephone at the 341 creditor meetings instead of being required to appear in person.   I have represented debtors […]

What is the cheapest way to file for chapter 7 bankruptcy?  This is a fair question.  If you are thinking about bankruptcy you probably can’t afford to spend much money on filing for one.  One way to delay spending money is by applying for an installment payment plan of the filing fee.  The Court rules allow for payment of the $335 filing fee within 120 days after you file for the bankruptcy.   Another option is to enter a payment plan with the bankruptcy lawyer.   I can work out payment plans.   But, you should be aware that the entire attorney fee […]

Navient has more than 10 million student loan customers.  If you have a student loan there is a good chance that Navient could be your servicer.   A lawsuit brought by the American Federation of Teachers against Navient was filed in Federal Court in 2018 alleging that Navient misdirected borrowers into loan repayment and forbearance programs when they should have been directed to the Public Service Loan Forgiveness program.   The terms of the settlement included payment to fund  an independent organization to educate borrowers in public service about the forgiveness program, payment to the plaintiffs, customer service training,  monitoring of customer […]

In the case of California Coast Univ. v. Aleckna No. 16-158 (M.D. Pa. Aug. 28, 2019) the Court held that California Coast University violated the bankruptcy stay where it excluded the graduation date from the debtor’s transcript because she owed $6300 in overdue tuition. The debtor had filed a chapter 13 bankruptcy which prohibits creditors from collecting from the debtor .   The court noted that it is well settled that withholding a transcript in an attempt to force the debtor to pay a debt violates the bankruptcy stay.    The debtor was also granted costs and attorney fees to be […]

In some cases a debtor can have their bonus taken in bankruptcy even if they have not been paid it yet.   However there was some good news for the debtor in the May 2019 case of  In re Brown in Illinois.   In that case the debtor had been receiving bonuses every year that she had been employed, and the trustee argued that there was enough past history so that the future bonus was part of the bankruptcy estate and could be taken to pay creditors.   However, the Court held that the bonus was not part of the bankruptcy estate since […]

Some representatives in Congress are still interested in a bill that would allow people to discharge private student loans in bankruptcy (the Private Student Loan Bankruptcy Fairness Act of 2013 (H.R. 532) ). This bill was introduced in 2013 but still has not become law. Before 2005 in most cases you could wipe out private student loans with the bankruptcy file and discharge. This changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This law exempted private student loans from bankruptcy discharge similar to a federal student loan. So, if you file bankruptcy today you can only […]

In an opinion filed on August 8, 2013 in the case of Corvello vs. Wells Fargo Bank (combined with the companion case of Lucia v. Wells Fargo), the Ninth Circuit Court of Appeals ruled that Wells Fargo had to meet its obligations involved in a federal Making Homes Affordable Program (also known as HAMP). Mr. Carvello, (the homeowner) was provided with a trial period plan (TPP) that required the homeowners to provide documentation so that Wells Fargo could determine eligibility for HAMP. The homeowners were also required to make trial payments to Wells Fargo. The TPP also specified that if […]