Bankruptcy is supposed to give debtors a fresh start – unless they’re struggling with student loans. But a little-known provision is helping these clients in bankruptcy court.
In 2005, Chuck Stewart’s life had come to a screeching halt. His partner was in the hospital with a terminal illness and he had only $300 in his bank account. He couldn’t find a job, and the $60,000 in student loans he took on for a doctorate in education weren’t going anywhere. That’s when he decided to file for bankruptcy.
“I spoke to two lawyers and they both said the same thing: ‘It’s going to be extremely expensive and you are going to lose,’” he said.
In a typical bankruptcy, Stewart would have to show that his income was below the median level for the state or that his expenses outweighed his disposable income. With a tower of medical bills and unable to find employment, he likely would have qualified. But because his loans were for school, lawyers said it would be impossible.
Are you a student & wondering if bankruptcy can work for you? Give our office a call at (410) 484-9000 and let us help you explore your options.