Articles Tagged with Student loans

Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I keep my car if I file bankruptcy?”


In a surprise to many who had begged GM to reconsider, the car company recently revealed it would ask a federal bankruptcy court to shield the company from lawsuits relating to defective automobiles that occurred prior to the company’s 2009 bankruptcy filing.


Detroit sign Charlotte Bankruptcy Attorney North Carolina Chapter 7 LawyerSeveral costly wrongful death suits have already been filed against General Motors regarding its faulty ignition switch system which has been linked to at least a dozen deaths. The problem involves the ignition switch slipping out of the “run” position, something that shuts down the engine and other crucial safety features like airbags. GM says the trouble has led to at least 13 deaths, though other consumer safety groups say the real number is many times higher.


GM has admitted that it first became aware of the problem more than a decade ago, yet it waited until February of this year to issue a recall. The choice to wait years and years to alert consumers to such a dangerous defect has stunned many and led experts to conclude the automaker could face billions of dollars in liability if it is discovered that many more people died in accidents related to the faulty ignition switch.


However, one thing GM has in its favor is its July 2009 bankruptcy filing. That bankruptcy led to a reorganization of the company and ensured that the GM which exists today is no longer liable for the liabilities incurred by the pre-2009 GM. Congressional leaders and safety critics had called on GM to avoid hiding behind the bankruptcy process, a call GM appears to have been unwilling to heed.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I get rid of student loans by declaring bankruptcy?”


In what many hope is a sign of things to come, the Illinois State House recently passed a measure that calls on the U.S. Congress to drastically overhaul the current student loan system, specifically with regards to the ability of students to have their loans discharged in bankruptcy.


Textbook Charlotte Bankruptcy Attorney North Carolina Student Debt LawyerThe measure, known officially as House Resolution 620, says that it is high time for the federal government to change the way it regulates student loans, shielding lenders from the usual risk of bankruptcy that they almost always contend with when granting a loan. The resolution asks that Congress take steps to change these laws and allow student loans to be fully discharged by filing bankruptcy.


As it stands today, student loans are the only kind of consumer debt that is categorically excluded from bankruptcy under federal laws. Though no one believes students should discharge loans in bad faith, the reality is that some degree programs simply drown students in unmanageable levels of debt that they will never be able to repay. Allowing these students to be financially crippled for the rest of their lives harms not only those students and their families, but ultimately society.


Many experts have said that trapping students in huge amounts of debt often has hidden consequences beyond financial stress. These people are far less likely to start new businesses, take risks on getting a new or better job, instead settling for a secure paycheck rather than taking a chance on something that might pay off big down the road.

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Debt Letter blocks Charlotte Bankruptcy Lawyer North Carolina Debt Collection AttorneyIt’s often the case that North Carolinians facing financial trouble and thinking about bankruptcy don’t understand all of the important details about the process. One common misunderstanding is that once a bankruptcy has been filed all your debts are immediately discharged, meaning you can start anew with a blank financial slate. Sadly, that is not always the case as there are some categories of debt that cannot be discharged during the bankruptcy process. Though this may not affect everyone, it’s important to understand which debts are and which debts are not dischargeable before beginning the bankruptcy process.


What does it mean to “discharge” a debt?


So how do you know which categories of debt are dischargeable and which aren’t? Start by looking at the bankruptcy code. Section 523(a) of the Bankruptcy Code contains a list of which debts cannot be discharged during a bankruptcy. This means that if your debts fall into one of the listed categories even if you prevail in your bankruptcy filing you will still be responsible for paying back the money owed.


What is not dischargeable?


Some good examples of debts that are not dischargeable during bankruptcy include things like child support and alimony arrearages, back taxes, many if not most student loans, debts that were not disclosed by the debtor and certain personal injury judgments and, oddly, debts that are related to housing fees. Also, debts that were acquired by fraud and debts that are related to criminal penalties or restitution are not eligible for discharge.

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