Legal Forum

People often ask me why student loans can’t be included in bankruptcy? If a person is unemployed, sick or injured, or barely making it with low income, than why should it matter if a debt is a credit card loan or a student loan? Who made this decision? The answer is: the United States Congress. Now, as tens of thousands of small businesses shut down due to COVID lockdowns, the ability of student borrowers to find work and repay loans is even more reduced. Millions of borrowers are in full default.

Many people do not realize that student loans were fully dischargeable in bankruptcy through the 1980s. Ironically, no one was suffering from unpayable student loans in the 1980s for the precise reason that leaders in banking and higher education knew better than to charge young people with low income too much, because loans were not guaranteed by the government. College was cheaper back then for a reason, now the sky is the limit.

To this day, people can even put old tax debts into a bankruptcy, but not student loans. This is ironic considering the fact that to owe taxes, a person must once have had an income from which the tax debt was derived, while a person with student loans may never have had the income they thought they’d achieve at the time the loan was made, typically when they were young and inexperienced.

Since the United States Congress is responsible for making student loans impossible to discharge in bankruptcy, the only way to fix the problem is to contact one’s senators and U.S. representative and demand that the law be changed again to put student loans BACK into bankruptcy.

Ironically, the student loan crisis has gotten so bad that now there is widespread support for universal forgiveness of all student loans. Perhaps if Congress had refrained from removing student loans from bankruptcy, such a drastic step would not now be on the table.

It’s easy to e-mail one’s senator or congress person. Just google “current [name of U.S. state] senators” and their websites will appear. To contact one’s U.S. representative, just go to the U.S. House of Representatives website and input one’s zip code. Just as with the senators, one may e-mail U.S. representatives directly through their website.

But wait… why did the US Congress make this decision? The answer is that by funding educational institutions THROUGH student borrowers, Congressional spending is cloaked and hidden behind young people’s naive efforts at self improvement. The borrower doesn’t get the money; the school gets the money from the US Congress. But the borrower is blamed and held accountable. It’s a classic switch and bait…

Arrested for DUI In Palm Bay or Melbourne, FL? Under Florida law, you’ll lose your driver’s license if you refuse to submit to the breath alcohol test. But you’ll also lose your license if your reading is .08 or higher.

Need more information or want to speak to an Melbourne, FL attorney now? Call us at (321) 253-6223.

Refusing to submit to the breath alcohol test means a suspension of one year–or eighteen months if there has been a previous refusal.

However, when people submit to the test and receive a reading of .08 or higher, the driver’s license suspension is typically only six months.

Is there anyway to prevent the automatic suspension? Yes, within 10 days of your arrest, you may apply for a business-purpose-only license or initiate an appeal of the driver’s license suspension. This is done at a DMV Administrative Review Office.

Challenging the DMV determination is called a “Formal Review.” As long as the demand is filed within ten days, you will receive a temporary driving permit that will allow you to drive while the appeal pends.

The Formal Review occurs at a DMV Administrative Review office. Police officers that witnessed the alleged incident are subpoenaed and give sworn testimony about what they witnessed. One benefit of the hearing is it gives defendants a preview of what police will say about them ahead of time–before the case is heard in criminal court. Your attorney cross examines the police witnesses, present other evidence that may contradict their testimony (if available), and present case law that supports a determination that the suspension of the driver’s license would be improper.

Keep in mind the Formal Review relates to the automatic suspension of your license immediately after an arrest. Win or lose, the main case will proceed in county court, potentially affecting one’s driving privilege and involving other criminal sanctions.

Many younger people are completely unaware that once upon a time, when people couldn’t find work, they could file bankruptcy and wipe out their debt–including their student loans.

Yes, in the 1980’s, when Baby Boomers were in college, student loans could be discharged in bankruptcy. Back then, people didn’t need to borrow much in order to go to school, and schools and housing were affordable. Schools and housing need to be affordable again. But the educational industry won’t change until it is forced to change. Setting students free is step one.

Society benefits when young people become educated and create innovations. Turning young people into indentured servants is destroying the United States economy, strangling the housing market, and forcing young people to stay in dead end jobs instead of creating new businesses. Student loans are dragging the economy down, and much of the debt is held by foreign governments and banks.

Many people don’t realize that student loans are currently treated the same as criminal restitution in bankruptcy court–debts owed due to criminal activities. For example, if a drunk driver injures somebody, they’ll owe criminal restitution, which can’t be wiped away in bankruptcy. Student loans are treated the same.

Why not treat student loans the same as tax debts, which can be discharged under certain conditions? Or better yet, treat student loans the same way that other unsecured debts are treated–make them fully dischargeable.

Student loans create an illusion that the American economy is equally accessible. It’s not. But young people don’t realize their mistake until it’s too late.

It’s time to wipe out the University-Student Loan complex and force our society to make college (and college housing) cheap and accessible to young people once again. The people getting rich from student lending must be held accountable. If students can pay their debts, they will. If they can’t, they’ll have to take their chances in bankruptcy court, possibly surrendering assets and damaging their credit. This is more than sufficient accountability for financial decisions made at a young age. It’s time to make lending and educational institutions accountable for their lies to American youth.

Common Question: I’ve been served with a foreclosure, should I move out immedately?

Answer: Don’t move out until a sale date is set, unless you have some other reason to move, like a job in another city. The foreclosure may take months or even years–especially if a bankruptcy is filed or the the foreclosure is disputed by the borrower.

Sometimes people file bankruptcy, indicate an intention to surrender their home, and move out. Yet banks don’t initiate a foreclosure for several YEARS. That means that homeowners may be liable for HOA fees or city water bills that accrue following their bankruptcy. Bankruptcy wipes away debt that exists at the time of the bankruptcy, it does not transfer ownership. That only occurs in a foreclosure, short sale, or deed transfer.

The reason for this is that federal courts do not have jurisdiction over property ownership, just bankruptcy and debt discharge. Only state courts have jurisdiction over foreclosure, wills, and other property related legal matters. After a person files bankruptcy, and the bankruptcy stay is lifted after the debts are discharged, state courts must still finish processing any pending foreclosures.