Odds of winning an Adversary Proceeding?

[flickflock]

I'm in the midst of a Chapter 7. I have my attorney on retainer and he referred me to another lawyer that specializes in Adversary Proceedings.

Due to the economy, I've been out of work for two years now. The school I went to is no longer open. Due to their reputation being smeared with lawsuits, they shut down the campus here after I graduated. The few jobs available in my field don't pay anything near what I was making prior to the economic crash. People with ten years more experience than I have are getting those jobs and working for pennies.

I also suffer from a chronic medical condition that will eventually kill me. My medical bills for the last year alone were 7k. Those are going into my BK. My doctor has no problem declaring me disabled, however, I'd really prefer not to be. I figure I'd rather make ends meet at a lower paying job and be productive and atleast maintain some standard of living and not be forced to live with my parents in order to pay student loans. I hate to think that I could be a burden on them. They would like to retire and not have to worry about me. I'd also prefer to allow people that really are unable to work use disability. Talk about feeling hopeless....

My only concern is I know lawyers fees are expensive. I may have to see if I can get a lawyer to take the case pro-bono. I hate to start a proceeding only to lose and then have lawyers fees on top of student loan payments. Even if I could only get the Citi private student loans that I took out to consolidate the student loans I had with Sallie Mae discharged, I may be able to do okay. Citi is completely not understanding and once I had no choice to go into default on those... they offer no possibility of making payments. It's payment in full or nothing according to them. They keep threatening to sue me and my doctor keeps warning me that the financial stress is having an effect on my health. Ugh.


(Sidenote: My lawyer keeps telling me that my Citi student loans can be discharged in Chapter 7 and I know this to not be true. He says they do not show on my credit report as an educational loan in the proper way they are supposed to. I just cannot imagine they'd make such a mistake. I do know I did them all online and there was no promisary note or anything that I actually had to sign for them.)

[tobee43]

first, i would like to wish you the best of luck with your bk process and your health. it's a trying time and a difficult one, but you'll be ok.

secondly, i am a bit confused, if your atty is a bk atty, the firm should handle adversary proceedings. and yes, it's possible to win one, we did.

i would ask the firm asking...no, insisting, to help assist you to retain someone else, or at least to make a referral for you, since they no better than anyone, your financial and physical situation and limitations.

best of luck and let us know how you make out.

[flickflock]

Thank you! I think I just needed to know that a real person has actually won one and that it is possible. I see so many mentions of it on the internet saying that it is extremely rare, etc.... I couldn't help but think the entire thing might be pointless.

Since my lawyer only handles Chapter 7 bankruptcy, he did refer me to two other attorneys that I am going to call on Monday to meet with. One happens to be a former judge who now specializes in adversary proceedings. I'm hoping the cost isn't too high. Thank you again.

[tobee43]

your very welcome....the cost was extra but not that much...between 700-1500 depending. i know that seems like a lot, however, depending on what or how much the creditor is going after it's worth your while, also, if you win, atty fees are included in the order.

[debee]

I don't think you two are on the same page.

OP is talking about a debtor-initiated AP to discharge student loan debt.

tobee43 is talking about fighting (& winning) a creditor-initiated AP objecting to the discharge of a particular (but non-student loan) debt.

I'm no expert on student loans, but everything I've read indicates that you'll need several thousand dollars, a permanent disability, and medical expert testimony (from more than one source) to establish the disability, and so on. It's possible, but difficult. Good luck to you.

[tobee43]

i won a case on a closed university. so i'm thinking i might not have been on the same page...however, in the same book.

it was a bit more complexed due to the atty's were still acting as the collectors for the university that went under. but the ap was won.

[justbroke]

It's not so much about establishing a disability, as it is establishing that, medically, you are unfit to work and/or earn enough to ever repay your student loans. There are people who win these, but they are far and few between. I work, daily, with hundreds of people with medical disabilities. Whenever I complain about my small disability, I just look to these folks who inspire me.

In my department alone, we have 2 parapalegics... who are computer software developers! That's out of 25 or so people. They come into work every day and inspire me. We have just about every type of issue, except those on respirators or bed-ridden.

I mention this not to downplay our disability, but that the bar to declare that you can no longer work and pay for your student loans, is quite high.

If you have $3-5K to spend on an attorney that is well-versed in educational loan discharge strategies, then you should go for it. I would definitely make sure you have an experienced attorney who can show you their track record. Don't go to the first attorney that says that they'll take the case and "see not problem winning". You want to see evidence of the attorney's successes and failures. You want an attorney that is going to tell you that it's "difficult" and "highly unlikely" to win a case; but that they have experience and have won in limited circumstances.

[AngelinaCatHub]

First of all, unless I missed something, the OP has not state he has an AP yet. Is he expecting one, going to perform one, or has one going? I would listen to the lawyer he is paying good money to. The loophole he knows may negate the need of a fight. If he only electronically signed the form (which BTW is legal now) and the paper work does not list this as a student loan, he may slip by. More info would be needed to know.

Side bar: My wife had a very bad back. Her life's dream was to crew a tall ship. She went to Elissa in Galveston and saw that she could not pass the physical test but when leaving saw a man called Max. Max was bent over and very crippled. He was young but poorly made. He told my wife that 'sure she could be a crew' that he would climb up to the yards and tether sail. It took him a bit longer that was all. Mrs. became crew. On that ship was a back surgeon who advised her to another surgeon as she was critical. Her back is two rods and nine bolts and 17 years ago and she is 99% right. God works in mysterious ways. 'Hub

[tobee43]

jb, indeed my understanding is the standard is not only extremely high as you have stated. our situation was more complex, in the fact the university had gone under and many did not rec their credits...for me personally while i was in grad school and since i was going into environmental law, it was my chemistry and bio and physic classes that didn't get credited...so we won the ap since the reps from the defrocked university's records and my credits were lost in the shuffle, so i refused to pay.....now, LOL!!! how you like to have to have taken college level chemistry and physics and bio again???? NOT ME!!!...so, we won. so i did not have to pay for that part of the loan covering those classes...

i know in most cases student loans are not dismissed upon any reason and the proofs are quite high.

wow hub, quite a tale...and "HE" does absolutely work in such mystified ways.

[AngelinaCat]

This may be slightly off topic, but reading the posts about universities that have closed, and have basically trashed their students' records, makes me wonder how many people may have taken out student loans, trying to better themselves, or gain a new skill set, only to be victimized by diploma mills?

[HHM]

This may be slightly off topic, but reading the posts about universities that have closed, and have basically trashed their students' records, makes me wonder how many people may have taken out student loans, trying to better themselves, or gain a new skill set, only to be victimized by diploma mills?

Well, looks like we will hit the $1 Trillion in total student loan debt this year. By contrast, total credit card debt is around $860 billion and going down; so no doubt people are borrowing for career transition and certainly some will fall victim.

As to the OP, even with good facts, if you do not have an attorney, your odds or winning are probably less than 5%. The attorneys on the other side approach these AP's as full blown litigation and bring out every trick in the book. I hope you are ready to have an 8 hour deposition where they basically go over your last 2-3 years of bank statements line by line asking you to explain why you spent money on "X" and not your student loans.

JB is right, establishing the condition is not enough, you need to establish that the condition prevents you from earning sufficient income to pay your living expenses and at least something to your student loan debts.

As to this statement:

If you have $3-5K to spend on an attorney that is well-versed in educational loan discharge strategies, then you should go for it. I would definitely make sure you have an experienced attorney who can show you their track record. Don't go to the first attorney that says that they'll take the case and "see not problem winning". You want to see evidence of the attorney's successes and failures. You want an attorney that is going to tell you that it's "difficult" and "highly unlikely" to win a case; but that they have experience and have won in limited circumstances.

It is a bit unrealistic. You want someone who has litigation experience, doesn't really matter in what area of law. Litigation is litigation, only the subject matter changes. But yes, you want someone that has at least touched the issues of student loan debt in BK to some degree, but to try to find an attorney that has brought even 1 of these cases to full conclusion AND won, is going to be tough.

[tobee43]

This may be slightly off topic, but reading the posts about universities that have closed, and have basically trashed their students' records, makes me wonder how many people may have taken out student loans, trying to better themselves, or gain a new skill set, only to be victimized by diploma mills?

good point...however this university had 3 campus in nj....i still never exactly knew what or why, how this could have happened to it. it had been a medium size universisty for over 90 years. for me, it was the first time i ever heard of it happening ever. i saw budget cuts where classes were cut, or programs elimated, but never the likes of this happening?

i don't know abount online schools, but this is the only one i ever knew personally closing.

would love to see all the posts that other universities closing....just to check out the "trend"...although this was a carry over from the early 90's...but if you could like some of those posts, it would be interesting!

[flickflock]

Thanks for the additional info everybody!

What I'm planning to do is initiate an AP. I found a few cases on the net with simliar details to me on the health front (which people won by the way), but I'm just hoping other things like being well below the povertly level for two years now, the school closing down due to misleading people on what their degree would do for them (not the degreree per se but the reputation of the school) and other things that forced the school out of business in my state, the fact that prior to shut down they were sued for making every student use only Sallie Mae for their loans because they recieved a backend on the loans, etc... will help me. Also, apparently little things like being under jurisdiction of the Ninth Circuit (the most liberal circuit of all) could be to my benefit.

I personally don't plan on kicking the bucket anytime soon, but nobody ever knows. Doctors fees, medicine, not being eligible for life insurance, hospitalizations, etc.... all are my first priority. Quite simply, I'm not going to put those high costs on my family just to satisfy two banks that have shown no interest in working a way out of this with me. That is why I choose not to go on disability and put the cost on the system and other people that are far worse off than me. I plan on fighting it out in the court as best as I can in order to not be a burden on my loved ones. If all else fails and I lose... I guess I go on permanently disability for three years and force them to eliminate them that way. Atleast then my health won't fall victim to a system that is ridiculously flawed.

Another interesting thing I read is that perhaps 5% of student loan debt ever actually is persued in court by the debtor in an Adversary Proceeding and only 1% of that makes it to trial. I'm not sure how accurate those figures are, but apparently the banks more often than not choose to not fight because of the cost and the risk that they might lose. (Each time the debtor wins, other cases spring up using that case as an example) This is of course assuming that the debtor passes the Brunner Test.

[tobee43]

best of luck to you with. i also saw a case about a dancer, i believe it was and she won, but she had (i hate to be morbid), but she had lost her foot or something as i barely recall.

hope it all works out well for you!

[ValleYum]

Super interesting 9th District AP here: https://ecf.wawb.uscourts.gov/cgi-bi..._doc?77,455677,,,

The plaintiffs won! May not be germane to your AP attempt but it may give you some inspiration.