One of the biggest qualms with the bankruptcy system many debtors have is regarding the non-dischargeable nature of student loans. With recent figures showing student loan debt as surpassing credit card debt for most Americans, the burden many experience with this type of debt is causing an undercurrent of legislative reform.
The Private Student Loan Bankruptcy Fairness Act of 2011 is the name of a bill introduced by U.S. Representative Steve Cohen of the Ninth District of Tennessee.
The bill would make private student loans generally dischargeable in bankruptcy as a way of addressing the mounting student debt crisis that many have written about. This bill would specifically:
1. Strike subpart B of Section 523(a)(8) of the Bankruptcy Code which makes general education-purpose loans nondischargeable;
2. Keep the nondischargeability (absent proof of undue hardship) of government-guaranteed student loans, but ensures that non-profit-backed loans, generally excepted from discharge, are only nondischargeable if substantially all the funds for the loan program are provided by a non-profit. This tightens up the existing subpart A, which provides for the nondischargeability of any student loan even if only “part” of the program funding derives from a non-profit.
The bill was referred to a subcommittee in July 2011, but to date, no further action has been taken on the bill. Experts predict that no change to the dischargeability status of student loans will take effect until sometime in 2013 (hopefully sooner). We will be following the status of this and related bills and keep the blog posted.
The law firm is a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA) and the Orange County Bar Association Outreach Committee.
The founding partners, Amid Bahadori and Bryan Thomas, were both recently named “Top Attorneys” by OC Metro magazine.
You have been in financial difficulty for some time. You may have a pending foreclosure sale. Or have a judgement against you and your wages may be garnished.
See a bankruptcy attorney now!
Don’t wait until the day before your house is up for auction. Don’t wait for the wage garnishment forms to show up at the office.
You need time to make an informed decision. And your attorney needs time to prepare your case. You can avoid many problems and anxieties by giving your attorney (and yourself!) some breathing room.
Sometimes the line between reality and “reality television” blur . . .
Sonja Tremont-Morgan, joined the cast of Bravo’s “Real Housewives of New York” in its third season. In September 2009, Hannibal Pictures Inc. won a $7 million judgement against Morgan after their movie-production partnership fell apart. The court issued a temporary restraining order against Morgan prohibiting her from “depleting or diverting her assets”.
Morgan appealed the ruling, and then last November, filed for Chapter 11 bankruptcy. This move automatically stopped Hannibal’s attempt to collect on the outstanding judgement.
Now Hannibal Pictures is requesting that Morgan’s Chapter 11 bankruptcy be dismissed due to alleged “flagrant, malicious and contemptuous conduct”.
In response, Morgan’s attorney wrote: “Ms. Morgan found herself being pulled in multiple directions and sought Chapter 11 to implement one of its primary purposes: to obtain a temporary breathing spell and the opportunity for a fresh start.”
Hannibal’s dismissal bid ignores Morgan’s “obvious need for relief,” and is based on a “partial picture” of her financial situation. Her attorney also said that bankruptcy laws offer sufficient safeguards to prevent a debtor from running roughshod over her creditors.
In January, 1,495 Orange County individuals and businesses filed for protection in federal bankruptcy court, 17.8% higher than a year earlier. Just five years ago, 89 filings were made in the local bankruptcy court.
We’re proud to have recently joined ProVisors’ community of professionals!
Amid T. Bahadori – Attorney – Bankruptcy – Newport Beach, Irvine, CA.
Many of my clients worry about being able to rent a new place to live after filing for bankruptcy and surrendering their (usually underwater) house. The concern is often founded in the belief that people with bankruptcies on their credit report are unable to rent. Fortunately, things aren’t as bad as many clients fear.
My usual recommendation is for the clients to look at properties for rent by owner instead of traditional large apartment complexes. The more traditional complexes tend to be more inclined to reject applicants whom have a recent bankruptcy on their credit.
Much more likely to rent to applicants with recent bankruptcy filings are individual landlords. They are usually far more concerned about you, the individual, than about your credit. A good job and first and last month’s rent often are sufficient to satisfy these landlords. Particularly, in light of the current state of the real estate market, many landlords are eager to rent out their properties and are more willing to overlook something like a bankruptcy on the potential tenant’s report.
Another, and even better option is a “Lease With Option to Buy,” or LWOB. This is a special form of rental, typically involving three provisions in addition to the usual rental clauses:
1. You have the first right to buy the property at some time in the future (usually 2 or 3 years);
2. Some or all of your monthly rent payment is credited to the purchase price if you buy the property; and
3. The purchase price is set at the date of signing.
A LWOB has a number of advantages, which include being able to rent a nicer condo, townhouse or single family home than might ordinarily be available, being able to lock in the potential purchase of the property at today’s lower prices, rather than the price the property might sell for in 2-3 years, and building up a substantial down payment on a property you might decide to buy.