Forum Post: Is voluntary Bankruptcy an option?
Posted 13 years ago on Oct. 5, 2011, 9:02 a.m. EST by skycaptsteve
(12)
from Brisbane, QLD
This content is user submitted and not an official statement
If you're in the 99% breaking your back for 70K-150K+ loans & increasing medical expenses is voluntary bankruptcy an option? what would happen if there were mass bankruptcies..
The last I understood about bankruptcy is that the two things you cannot get out from are student loans and child support. If I'm not mistaken, 5 years ago they did some changing in the whole bankruptcy options to protect the financial institutions. Funny, it's like the banks saw this coming a long time ago and took the precautionary measures at the time.
(I'm not from a Law background) but would it be possible to lobby against this? For instance if a high profile lawyer / judge came on board to represent a select few to set the precedent in proving a flaw in the system. I mean if a debt ceiling can be raised, this seems poignant?
Do you mean to investigate the bankruptcy laws were purposely changed because a financial meltdown was predicted in America? I'm sure there's a connection.
Exactly, It's a pretty interesting theory isn't it? Add it to the bucket list of conspiracy theories in American economics but push it to the very top.
People who put things like this together work with 5,10,20+ year trending projects (economics 101) and it seems like the Government in office works to a much shorter time frame (however long they can sustain being in office). Corporates clearly have a greater stake than government in power. Corporates are relying on populous ignorance to create systems like these years before their projected return, or in this case safeguard.
Hmmmm...this might stir up an investigation. I do remember the bankruptcy law changes were back during the huge wave of the mortgage market. And wasn't there a report issued back in 2004 stating a risk developing in the housing market?
wow. if that's the case it flew completely under the radar. Which is a cause for concern at how many other policies were changed in this time that might have even stronger negative ramifications in the next 5 years. Who do you speak to, to investigate things?
I may be signing off for the next 8+ hours (it's 12am here)
Get some rest! Sounds like a long road ahead!
I'll see what I can dig up and see if worth posting in new thread.
yeah sure thing. I'm an active campaigner (HA) no really I'm a design/digital/comms director for a national charity over here and have ran a fairly successful campaign advocating a conservation effort as well.
In other words, if you give me some leads I should be able to help out here
here's an excerpt from a 'Legal Helpers' site. Looks to provide some sort of legal advice in the US. It covers Bankruptcy and student loans. More questions and answers are available on their site (http://www.legalhelpers.com/personal-bankruptcy/common-questions.html#anc_9) It seems legit...
Can I get rid of student loans or tax debts?
Any bankruptcy attorney must have a sophisticated understanding of bankruptcy law to deal with student loan and tax debts. Until October 1998, student loans were discharged through Chapter 7 bankruptcy if the first payment on the loan became due more than seven years prior to the date of filing. In October 1998, President Clinton signed a new law into effect that disqualified all student loans from discharge. Legal Helpers can still help you obtain relief from your student loan debts through the use of Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, our attorneys can consolidate your student loan debt, along with any other outstanding bills, and arrange an interest free repayment plan, so that you do not have to suffer through the burden of garnishments, harassment and other collection efforts by student loan agencies. We may even be able to reduce the amount paid to the student loan agency during the course of your Chapter 13 bankruptcy so that your consolidation payment is as low as possible. If you would like to find out more about how Legal Helpers can ease the burden of student loan debts through the use of Chapter 13, call toll-free at 1-800-260-1402 to speak directly with a Legal Helpers attorney.
Tax debts are generally subject to discharge only if you file personal bankruptcy more than three years after you file a timely, truthful tax return. If your return is filed late, the taxes are generally discharged only if you file bankruptcy more than two years after filing a truthful tax return. Of course, these are general rules and you should speak with a Legal Helpers representative who will perform a detailed analysis of these issues.
@trickledown: more so it just seems against the concept of bankruptcy if you're ineligible because of student loans. What if a precedence was set for bankruptcies of student loans?
Would a judge really 'garnish' wages if an individual was living off a very minimum wage with obvious evidence that it would not be enough to cover day to day expenses?
@dantes44 I'm wandering what would be a considerable amount, taking into account things like ongoing insurance expenses, medical, child support etc. based on what I've been reading on we are the 99%
Maybe I'm misreading your question. Is your income between 70k-150k? Or is that the amount of loans owed back?
oh hypothetically if you had loans owing in excess of 70K, 100k, or 150k+ (the three figures that I'm seeing reoccur on the 99% tumblr)
personally I'm actually in pretty good financial position (on about 48-50k a year as a contractor, with about 30K in student loans after a double degree) Australia is quite supportive in that regard.
A M.D. might exit graduate school with $150k in loans. In theory, they make $100k/year in earnings but these are doctors. And they are supposed to be for the health of all ... and not for-profit health care systems.
OK. Yeah, totally misread it. I thought your income fluctuated between 70 and 150. I'm not sure, I owe a bit for med. expenses but nowhere near even 10 k. I have creditors calling me but that is far as it goes. I'm going to pay it back when I save enough. Haven't had any wage garnishing yet. But if someone is up to 70k+ I'm sure they'll go for them more aggressively.
So, to put it short---- I don't know :-)
oh no that's fine. Thanks for the input. Do you have any access to the initial policies / contracts you signed with your student loans?
We have a completely different system over here, student loans are actually supplied by the government and not through creditors and are only owed when you reach a certain threshold of income (way above minimum wage) and owed without interest. Tuition fees are considerably less too, as mentioned earlier for a 4.5 year double degree in Business and Design I only owe 27K
Mine aren't student loans (if you're asking me.) Mine are medical bills when I was unemployed and too stupid to sign up for COBRA. COBRA if you don't know allows someone to continue their group health insurance from their prior employer for a certain amount of time for a monthly fee. I'm fairly young and healthy so didn't think I would need it. Ooops.
Oh man, hope you can pull through okay. Is there such a thing as free legal?
The rules are that way for student loans because a moral panic was sparked off in the 70's about black kids getting student loans for college and then filing for bankruptcy the second they graduated. Typical Republican race-baiting turned into law.
As for if a judge would garnish the wages of someone "just getting by", that very much depends on the judge. They are given a lot of leeway in how they rule on cases. Also depends on how good your lawyer is. Get ready for your creditors to say that if you are wearing anything other than ashes and sackcloth in the courtroom that you obviously have enough money to pay.
Hmm.. that was really informative. I feel like There's a campaign in here to call to action a public lawyer capable of taking this to court (pro-bono) and setting a precedent - I've no law background - but would it be plausible to find a exemplary case (99% tumblr seems to be full of them) where it is without a reasonable doubt that the individual qualifies for bankruptcy?
(my background is in comms strategy) I feel a high profile case with legitimate PR would also garner public support - despite occupy having plenty of public support there's also plenty of inaction for corporate pressure. Sitting on the chat for the last 30mins makes this obvious.
Certainly laws can be changed. Hell, if the President can send people to Gitmo or start a war with just a stroke of his pen, he could probably declare all student loans null and void. Would he ever? Heh, I don't know!
Didn't one of your presidents raise the debt ceiling 17 (or more) times while in office? There's a lot of questionable things that happen behind closed doors. I'd like to put this idea in someone's head though.
Heh, until a few months ago, raising the debt ceiling was just a meaningless formality that happened at regular intervals with no news coverage.
Republicans only care about the national debt when Democrats are in office. Democrats just don't care.
Also, depends on the types of loans. If it is student debt, you are out of luck. If it is over a certain amount, a judge will garnish your wages.
70k-150k is a pretty big difference. Which is it?