Student Loans and the Means Test in Chapter 7 Bankruptcy
The Chapter 7 “means test” determines whether your income qualifies you for a Chapter 7 bankruptcy. Otherwise known as the Chapter 7 Statement of Your Current Monthly Income, the means test prevents debtors with higher-than-median income from filing Chapter 7 bankruptcy. The interaction of student loans and the means test often requires careful consideration to […]
Is There a Statute of Limitations on Student Loans?
A statute of limitations sets the maximum time after you default on a debt within which the creditor can sue you. Statutes of limitations protect defendants from plaintiffs who do not pursue legal actions with reasonable diligence. The Department of Education recently found that more than 40% of borrowers have stopped making payments on their federal […]
What Happens to Student Loans in Chapter 13 Bankruptcy?
Student loans remain valid debts after discharge in either Chapter 7 bankruptcy or Chapter 13 bankruptcy. However, paying your student loans in Chapter 13 bankruptcy allows you some breathing room to pay your other debts. What Is Chapter 13? Chapter 13 bankruptcy is sometimes called the “wage-earner’s bankruptcy.” Many people who do not qualify for Chapter […]
Student Loans are Holding Back Home Ownership
America’s student-loan debt grows by $2,726 every second. Total student loan debt in the United States has topped $1.3 trillion, second only to mortgage debt. Nearly one-third (30%) of Americans know someone who has delayed the purchase of a home because of student loan debt. And more than half of those expect that delay to last longer […]
Tuition is Dischargeable in Bankruptcy
Section 523 of the Bankruptcy Code provides that student loans are not dischargeable in bankruptcy. But unpaid tuition is not a student loan. While it is extremely difficult to discharge student loans in bankruptcy, unpaid tuition is dischargeable in bankruptcy. 11 U.S.C. 523(a)(8) provides that, absent undue hardship, a debtor cannot discharge student loans. The […]
The DC Area Residents with the Highest Student Loan Debt
The latest research from WalletHub compares the average student loan debt to median income of residents in more than 2,500 U.S. cities. The research allows us to see who in the Washington, D.C. area has the highest student loan debt in comparison to income. The following table sorts D.C. area cities based on the ratio […]
Student Loan Forgiveness Could Narrow the Racial Wealth Gap
The racial wage gap is wider today than in it was in 1979. And according to this recent Washington Post article, student debt is exacerbating the gap. Student loans make it more difficult for to save money and accumulate assets. Targeted student loan forgiveness could narrow the racial wealth gap. Education levels directly influence both economic opportunity and […]
Student Loans Jeopardize Retirement for Older Americans
Retirement is supposed to be a time to leave behind the hassles and stress of the workforce. In many ways, retirement is the reward for a lifetime’s contribution to the economy and country. We usually consider student loans to be a problem for the young. But today’s retirees increasingly face crushing student loan burdens. Believe […]
The Effects of the Great Recession on American Wealth
I just finished reading the 12th Edition of State of Working America, which provides some excellent insights into the effects of the Great Recession on American wealth. The book is the work of the Economic Policy Institute, a nonpartisan, nonprofit Washington, D.C. think tank, created in 1986 to broaden the discussion about economic policy to […]