The latest unemployment figures show that jobless claims have increased in SEVEN of the last EIGHT weeks. In the past month alone, almost 62,000 jobs have been LOST. That follows April's 42,000 job losses. Over 100,000 jobs lost in the past 60 days. The stock market, responding to this news as well as shaky situations in Europe, recorded it's worst day today (5/31) in almost two years. In addition to these new numbers, the government is now revising their 'previous' estimates from January, February, and March, which were a bit more optimistic than the numbers actually indicated. They've also revised their GNP estimate to show a more realistic softening. Times are tough. Although they are trying their best to put a positive spin on it, the actual numbers are quite discouraging. If the recent economic downturn has put you into a difficult financial situation, contact us for possible legal remedies to your problems. Your initial consultation is free. Call (731) 423-1888 today.
Under the United States Bankruptcy Code, specifically 11 U.S. Code Sec. 528 (a)(8) student loans are not dischargeable under a Chapter 7, 11, 12 or 13 bankruptcy proceeding. However, if you can establish that you would be under a financial hardship if the student loan was not discharged, it is possible to get what is called a hardship discharge.
What financial situations qualify for a ‘hardship discharge’ has been defined or set forth by case law in many bankruptcy court decisions across the nation. However, the main case that is cited as authority by these courts is a thirty-year old U.S. Court of
Appeals decision, Brunner v. New York Higher Education Services Corp., 831 F. 2d 395 (2d Cir. 1987) and requires a debtor to prove:
(1) That the debtor cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to pay off student loans;
(2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and
(3) that the debtor has made good faith efforts to repay the loans
Proving the points set forth in the Bruner decision listed above might seem simple at first glance. However, hundreds of
bankruptcy litigants have tried and failed to pass the three prong Bruner test. A closer look at each of the prongs of the test reveals that you must:
First convince the court that you can’t maintain a ‘minimal standard of living’and pay back your student loans at the same time. Just what is a minimal standard of living is subject to interpretation. Some courts have defined a ‘minimal standard of living’ as the federal poverty level. There are statistics that indicate that in urban areas a person whose income is below 150% of poverty level requires government subsidies (section 8 housing, Medicaid) to take care of the most basic needs of human existence. Further, due to income-based deferment programs in place with regard to most student loans, the courts often times consider the debtor to be able to make payments and maintain that ‘minimal standard of living’.
Second, you are required to prove that your financial circumstances are going to remain the same for the life of your student loan.
This can prove difficult as no one can predict their economic future with 100% certainty whether good, bad or ugly.
Third, under ‘good faith efforts to repay loans’, the court in the Brunner case looked at the debtor’s attempts to increase income and proof of unnecessary expenses by the Debtor when income might have allowed the Debtor to make payments on the
student loan. If you are thinking about filing bankruptcy and wondering if you could get a hardship discharge, you or your attorney should take a look at recent bankruptcy cases for examples of expenses that have been considered less important or subordinate to that all-important student loan payment. For example, you might find out that courts have determined that debtors should make do with a five year old prescription for eyeglasses and that life insurance has been considered a luxury item.
The presumption at this point should be that obtaining a ‘hardship discharge’ in bankruptcy is the exception rather than the rule. However, aggressive research and lawyering may help. Be sure to retain the services of a competent consumer bankruptcy attorney to assist you in making your decision to go forward.
In a video published on our website Verner discussed whether someone who files bankruptcy will have their name published in the paper.
The question of the week was: “This may sound like something I shouldn’t be concerned with....but I am. If I file bankruptcy, will my name be in the paper?”
The simple answer is – yes, it is very likely that your name will appear in the paper, assuming your local paper takes the time to search the records and publish that record. Also, most newspapers have a website that publishes information mirroring their paper and the fact of your filing bankruptcy might be published on their website. The filing of a bankruptcy petition is a matter of public record. The public, including the newspapers, have free access to all court records unless a judge issues an order that a particular record or file is to be sealed, meaning the public cannot access the record. It is very rare that judges seal records in bankruptcy court except to protect confidential information such as a date of birth or a social security number to prevent identity theft. If you are concerned about the possibility of your name being published on a website or your name being published in your local paper, take a look at the list of West Tennessee and Middle Tennessee newspapers below.
This list gives the web address and contact information for all the newspapers in West Tennessee and Middle Tennessee. Go to their website and determine whether they maintain a data base for bankruptcy filings or some type of search box that will search public websites for bankruptcy filings. You could also call the local papers that cover your area and simply ask if they publish bankruptcy filings on their website or in their paper edition. If you want advice on filing bankruptcy and the consequences of filing bankruptcy, I would be glad to talk to you. I offer a free consultation and you will not be charged a fee unless I am able to help you. Phone (731) 423-1888 or (615) 371-6136.
Here is the list of newspapers that cover the jurisdiction for the United States Bankruptcy Court for the Western District of Tennessee, Eastern Division --- click the link to go to the website and/or get contact information for your local newspaper:
Covington CovingtonLeader(A) (C) (F) (T) (W)
Dresden Dresden Enterprise(A) (C) (W)
Dyersburg State Gazette(A) (C) (F) (T) (W)
Huntingdon Carroll County News-Leader(A) (C) (W)
Jackson Jackson Sun (A) (C) (F) (T) (W)
Linden Buffalo River Review(A) (C) (F) (W)
Martin Weakley County Press(A) (C) (F) (W)
Milan Mirror-Exchange(A) (C) (F) (W)
Paris Paris Post-Intelligencer(A) (C) (F) (T) (W)
Savannah Savannah Courier(A) (C) (F) (W)
Selmer Independent Appeal(A) (C) (F) (W)
Tiptonville Lake County Banner(A) (C) (W)
Union City The Messenger On-Line(A) (C) (F) (W)
Here is the list of newspapers that cover the jurisdiction for the United States Bankruptcy Court for the Middle District of Tennessee, Nashville and Columbia Divisions --- click the link to go to the website and/or get contact information for your local newspaper:
Ashland City Ashland City Times(A) (C) (F) (W)
Clarksville Leafchronicle.com(A) (C) (F) (T) (W)
Dickson DicksonHerald(A) (C) (F) (T) (W)
Fairview Fairview Observer(A) (C) (F) (T) (W)
Franklin Review Appeal(A) (C) (W)
Franklin Williamson Herald(A) (C) (F) (T) (W)
Lewisburg Marshall County Tribune(A) (C) (W)
Murfreesboro Daily News Journal(A) (C) (F) (T) (W)
Murfreesboro Murfreesboro Post(A) (C) (F) (W)
Murfreesboro Rutherford Reader(A) (C) (W)
Nashville City Paper(A) (C) (F) (T) (W)
Nashville La Campana(A) (C) (F) (T) (W)
Nashville Mundo Hispano(A) (C) (F) (T) (W)
Nashville Nashville Business Journal(A) (C) (F) (T) (W)
Nashville Nashville Scene(A) (C) (F) (T) (W)
Nashville Tennessean(A) (C) (F) (T) (W)
Nashville Tennessee Tribune(A) (C) (F) (T) (W)
Springfield Robertson Co. Times(A) (C) (F) (W)
If you need help handling your creditors and want to explore you options both inside and OUTSIDE of filing bankruptcy, call the office today at (731) 423-1888 or (615) 371-6136. In a free consultation, we will help you determine the effects that filing bankruptcy will have on your individual financial situation and help you come up with a plan of action to help “get your life back!”