Wednesday, May 27, 2015

Student Loans & Bankruptcy: What are the Options?

I am drowning in student loan debt. Is this debt dischargeable in bankruptcy? 

Traditionally, student loans were not considered a dischargeable debt under federal bankruptcy laws. However, as national student loan debt has skyrocketed into the trillions of dollars, struggling graduates may be able to escape the burden of four-figure monthly payments by successfully proving severe financial hardship. As well, there are a number of less common avenues through which student loan debt may be discharged, which could be a financial life-saver for those meeting eligibility criteria. 

Three-prong undue hardship test

Under current consumer bankruptcy law, there is a three-part test to determine if a student loan is dischargeable based on undue hardship. First, you must prove that, if forced to repay the loan under its minimum payment terms, you would be unable to maintain a minimum standard of living. While the phrase “minimum standard of living” has not been officially defined in the bankruptcy code, it is generally considered to mean the financial ability to maintain adequate housing and meet daily needs for the borrower and his or her dependents. 

Second, the borrower must show that the inability to maintain a minimum standard of living is not temporary in nature, and is likely to continue throughout the duration of the loan repayment period. Lastly, discharge may be possible if you have made a true good faith effort to repay the loan prior to filing for bankruptcy – which means a period of at least five years. 

Known as the Brunner test, this three-prong analysis looks for poverty, persistence, and good faith – and may be a good option for borrowers who have tried, but are simply unable, to repay that those looming and unrelenting education debts. 

Other options

As a debtor, there may be other options for avoiding student loan repayment, primarily if your alma mater is involved in any kind of investigation for fraud or consumer deceit. In some instances, students have earned relief from part or all of their student loans by successfully highlighting their school’s false promises or exaggerated graduation/employment rates – thereby triggering a consumer protection or breach of contract action. 

If you are struggling with student and consumer debt, please contact Miami Valley bankruptcy attorneys at Cox, Keller & Lusardi right away.  You can reach our office, conveniently located in Xenia, Ohio, by calling (937)262-4789 today. 

Tuesday, May 26, 2015

Thistledown Racino and Horseshoe Casino to Seek Bankruptcy Protection

Can a corporation in bankruptcy continue to operate as normal?

Citing poor regional performance, Caesars Entertainment Operating Company has filed for bankruptcy seeking to climb out of $18.4 million in debt.  Caesars owns 50 casinos worldwide, including a 20% stake in two Ohio Casinos, Horseshoe Casino in Cincinnati and Thistledown Racino in Cleveland.  

The bankruptcy will likely have little to no effect on casino operations.  The company’s CEO, Gary Loveman, assured employees and gamblers that they will continue to host events and meetings.  Guests are welcome at the hotel and all gaming will remain in place.  The director of gaming, lodging and leisure at Fitch Ratings commented on the bankruptcy stating that  “Casinos in the past have operated through bankruptcy with little disruption to loyalty programs or services.  They own a small piece so it’s really not a major factor for those casinos.”

Most bankruptcies do not involve the dissolution of a business.  They protect debtors by reorganizing their debt or discharging it as necessary.  News of the bankruptcy resulted in a 4% drop in stock price of Caesars entertainment (NASDAQ: CZR).  

If you or your business are in need of protection from creditors, bankruptcy may be the best option for you.  You deserve attorneys who have experience and dedication to their clients like the ones at Cox, Keller & Lusardi.  Call us today to schedule an appointment at (937) 372-6921.  We provide a free, no obligation consultation to discuss your legal needs.

Monday, May 25, 2015

Effect of Bankruptcy on Drivers’ License Suspension in Ohio

I recently went through Chapter 7 bankruptcy and my Bureau of Motor Vehicle fees were discharged as a debt. Can I get my license back? 

For Ohio drivers, nothing can be more frustrating than losing your license for failure to pay fines, penalties and fees to the Bureau of Motor Vehicles (BMV). One the one hand, you’d love to get to work to pay back what you owe. On the other, your loss of driving privileges prevents you from getting to work on time – if at all! 

However, for those who have opted to pursue Chapter 7 or Chapter 13 consumer bankruptcy, there may be a remedy to this discouraging situation. For more information about the positive effects of consumer bankruptcy, including regaining balance and control of your life, be sure to contact an experienced Miami Valley bankruptcy law attorney right away. 

Discharging suspension fees following bankruptcy

The BMV may impose a license suspension for any number of reasons, from dropping out of school to committing a DUI. Each category of suspension carries hefty fines and penalties, and this can create an impenetrable hindrance for many Ohio workers. 

However, Section 4510.10 of the Ohio Revised Code affords Ohioans a number of options in repaying their fines, getting back on the road, and resuming employment or education as quickly as possible. Under Section 4510.10(H), a bankruptcy petitioner having successfully commenced the Chapter 13 or Chapter 7 consumer bankruptcy process may regain access to driving privileges by presenting the BMV with a filed and court-stamped Petition or Discharge in Bankruptcy, as well as a copy of the Schedule of Debts indicating the debts that were included in the bankruptcy. Under the law, the BMV is thereafter required to reinstate driving privileges and reissue the petitioner’s driver’s license, provided there are no additional underlying debts or issues that may prevent reinstatement (e.g., outstanding child support). 

Petitioners seeking reinstatement following bankruptcy should direct their paperwork to Ohio Bureau of Motor Vehicles, Attn: Compliance Unit, P.O. Box 16583, Columbus, Ohio 43216-6583, or appear in person at any Reinstatement Center. 

If you are considering bankruptcy or would like to learn more about the process, please contact the law firm of Cox, Keller & Lusardi today by calling (937)262-4789 today. 

Wednesday, May 20, 2015

Congress to Consider Student Debt Forgiveness in Bankruptcy

Can I discharge my student debt in bankruptcy? 

The concept of bankruptcy has been around since the inception of the United States, and various types of debts can be forgiven through a consumer bankruptcy proceeding. Unfortunately for millions of educated Americans, student loan debt is not currently found on this list; however, Congress is considering an amendment to current bankruptcy policy to allow for the possible forgiveness of insurmountable student loan balances.

A group of 12 senators recently introduced the Fairness for Struggling Students Act of 2015 – a piece of legislation aimed to reduce the staggering $1.2 trillion in outstanding education loans. While barely two pages in length, the potential impact of this Act is enormous, and could conceivably allow struggling borrowers the opportunity to enjoy financial peace along with their prestigious undergraduate, graduate and doctoral degrees.

In essence, the Act is drafted to include a new definition of dischargeable debt – namely, any debt made or guaranteed in whole or in part by the federal government or acquired through the attendance at an institution funded in whole or in part by federal funds. The definition also covers the discharge of debts acquired through the advancement of federal funds via stipend or scholarship.

Since 2005, private student loan debt has been excluded from the bankruptcy conversation, unlike other private secured and unsecured debts (e.g., mortgages, car loans, credit cards). However, as more and more students pursue higher education – and more and more university-level fraud is uncovered – the student debt amounts have skyrocketed. As a result, students have had to make mortgage-sized monthly payments, while delaying the purchase of a home or starting a family. 

If you are considering bankruptcy and would like to discuss your options as a consumer debtor, please contact Miami Valley Bankruptcy today for a free consultation by calling (937)262-4789. Our experienced bankruptcy attorneys serve clients in Xenia, Jamestown and Beavercreek, Ohio.

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Miami Valley Bankruptcy, Brian Lusardi, Esq., assists clients with Bankruptcy matters including but not limited to: Common Myths, Cost of Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, The New Bankruptcy Law and Personal Bankruptcy in Xenia, Ohio, and the cities of: Wilberforce, Alpha, Spring Valley, Dayton, Bellbrook, Yellow Springs, Cedarville, Fairborn and Clifton; and the counties of Greene and Montgomery.

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