Posted on Jun 26, 2015
Courts Rule That Disabled Woman Living Below the Poverty Line Must Repay Student Loans.Why ! ?
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The judge has no heart. This woman will never pay her student loans back. Why? Because She Has No Income And Is Disabled. She probably hasn't made any good faith attempts to pay it back because she has no income. This part really burns my butt...
The debtor didn’t meet the “undue hardship” test required by the bankruptcy code, U.S. District Judge Peter J. Messitte said in his opinion. Unlike credit card debt, student loans can almost never be discharged in bankruptcy. The only way people who have filed for bankruptcy can get rid of the debt is by proving that repaying them would impose "undue hardship" on their lives.
That standard is not defined in the law, so it has been left to the courts to decide exactly how bad someone's circumstances need to be to qualify for relief.
Despite proving that paying back her student debt would leave her unable to afford basic living expenses, two judges ruled a woman could not discharge it in bankruptcy.
Monica Stitt, a 45-year-old woman, is unemployed, disabled, and living far below the poverty line. Still, a federal district judge decided in June that she could not cancel more than $37,000 in student debt in bankruptcy, because she hadn’t made a good-faith attempt at repaying the loans.
Her entire income—about $10,000 per year, according to the judge—consisted of Social Security disability benefits and public assistance. She has been unemployed since 2008
http://www.bloomberg.com/news/articles/2015-06-22/courts-rule-that-disabled-woman-living-below-the-poverty-line-must-repay-student-loans
The debtor didn’t meet the “undue hardship” test required by the bankruptcy code, U.S. District Judge Peter J. Messitte said in his opinion. Unlike credit card debt, student loans can almost never be discharged in bankruptcy. The only way people who have filed for bankruptcy can get rid of the debt is by proving that repaying them would impose "undue hardship" on their lives.
That standard is not defined in the law, so it has been left to the courts to decide exactly how bad someone's circumstances need to be to qualify for relief.
Despite proving that paying back her student debt would leave her unable to afford basic living expenses, two judges ruled a woman could not discharge it in bankruptcy.
Monica Stitt, a 45-year-old woman, is unemployed, disabled, and living far below the poverty line. Still, a federal district judge decided in June that she could not cancel more than $37,000 in student debt in bankruptcy, because she hadn’t made a good-faith attempt at repaying the loans.
Her entire income—about $10,000 per year, according to the judge—consisted of Social Security disability benefits and public assistance. She has been unemployed since 2008
http://www.bloomberg.com/news/articles/2015-06-22/courts-rule-that-disabled-woman-living-below-the-poverty-line-must-repay-student-loans
Posted in these groups: 
Bankruptcy
Bankruptcy
Posted >1 y ago
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Student loans are just about the one think that cannot be included if you file bankruptcy. I would image it is because everyone would amass about $100,000 in student loan debt to become an underwater basket weaver and then claim bankruptcy. Doctors would get about $175,000 in debt, secure a position, and then claim bankruptcy as well. Which agency took her to court to enforce payment? My ex has a brazillion dollars in student loan debt and has no intention of ever having a job, let alone repay her student loans. This is confusing me. How can the ex get decades of 'undue hardship deferrments' with NO job, but tax exempt benefits from disability only means one has to repay? That's messed up.
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SGT (Join to see)
SFC Mark Merino, Mark, it may depend on which judge you get. I don't really know. I understand the reason behind no bankruptcy claims on student loans, unless you can pass all three tests. Then, you are considered to be a hardship case. It is messed up. I have a 32 year old nephew who has never had a job in his life. He sits around all day drinking beer. Nothing is wrong with him besides being LAZY! He filed for, and got, a disability claim, which is about a $1000 a month for memory problems. Gee, wonder what's causing his memory problems? Another nephew had a bad wreck on his Harley two years ago, and although he stil rides it, he filed and got a physical disability. A niece of mine who is married to the Harley guy, and about 5 years ago, while on food stamps, got a free boob job. How can this crap happen? All three are on on a horse, riding the system. I'm so pissed about that. I'm ashamed to have relatives like that.
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SGT (Join to see) Wow! Sad story, her lack of attempt in good faith is what causes her to fail the undue hardship test. Of course good faith is not defined well either. Perhaps if she had prior contact and explained why, sadly the facts don't speak to it. This federal statute was made strict during the last Clinton administration with a Republican Congress.
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SGT (Join to see)
LTC John Shaw, So Sir, I guess those loans will never even be attempted to be paid back. I feel really sorry for her. I wonder if she had any relatives to help her. It didn't touch on that either.
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It ain't the judge ....
In 2005, President George W. Bush signed into law The Bankruptcy Abuse Prevention and Consumer Protection Act [BAPCPA] which no longer allowed debtors to discharge their private student loans. Prior to BAPCPA, student loans originating from private lenders could be discharged.
http://carybankruptcy.com/blog/are-student-loans-dischargeable-in-bankruptcy
In 2005, President George W. Bush signed into law The Bankruptcy Abuse Prevention and Consumer Protection Act [BAPCPA] which no longer allowed debtors to discharge their private student loans. Prior to BAPCPA, student loans originating from private lenders could be discharged.
http://carybankruptcy.com/blog/are-student-loans-dischargeable-in-bankruptcy
Are Student Loans Dischargeable in Bankruptcy?Sasser Law Firm
Sasser Law Firm helps clients by specializing in bankruptcy law and litigation including chapter 7, 11, and 13. We are located near Raleigh/Cary, Wake County, NC.
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