Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get rid of student loans by declaring bankruptcy?”
So-called for-profit colleges and universities have been all the rage in recent years, at least if one believes the glut of television advertisements that for-profit higher-education institutions have used to flood American airways.
Some of the claims made by one for-profit college—California-based Corinthian College—were so far from reality that last month the United States Department of Education levelled a $30-million fine on the company. The Department alleged that Corinthian’s Heald College chain misrepresented its job-placement rates—947 times, to be exact.
The Department ordered Heald to close its doors and to stop enrolling students. The 9,000 students currently enrolled in Heald’s campuses in California, Oregon and Hawaii will be allowed to complete their studies or to transfer to another educational institution.
The fate of students of for-profit colleges and universities—those who, presumably, bought into the companies’ slick advertising campaigns—is front and center in Corinthian’s legal unraveling. The unraveling gained steam on May 4, when the company filed for bankruptcy in United States Bankruptcy Court in Wilmington, Delaware.
Federal officials and authorities in numerous states have accused Corinthian of misleading its students, puffing up its graduation and job-placement rates while helping students rack up huge, taxpayer-subsidized loans that were used to pay for school tuition.
“For too many students,” said Rohit Chopra, a student-loan official at the federal Consumer Financial Protection Bureau, “Corinthian turned the American dream of higher education into a nightmare of debt and despair.”
Scott Gautier, who is serving as counsel for a group of some 500,000 former Corinthian students, has said the students’ claims could exceed $25 billion. At the time of its bankruptcy filing, Corinthian had just $19.2 million in assets and $143.1 million in debts.
The United States Trustees’ office helped 16,000 current students form a committee to represent the students’ interests in Corinthian’s bankruptcy. The students are being assisted by lawyers from the Public Counsel Law Center, Robins Kaplan LLP, and Strumwasser & Woocher LLP, according to Business Insider. Anne Richardson, the associate director of Public Counsel Opportunity Under Law, told Business Insider that it was the first time—to her knowledge—that a committee had been set up to represent the interests of students in the bankruptcy of an educational institution.
Richardson said the students’ voices would be “vital” in the bankruptcy process, but the weight those voices will be accorded under United States Bankruptcy law—compared against the claims of creditors—remains unclear. The Department of Education and Consumer Financial Protection Bureau have already secured some $480-million in debt relief to affected students.
If you find yourself needing the services of an experienced Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.
About the Author
Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.
Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.
In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.
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