Reopening Discharged Pro Se Case to Initiate Student Loan AP

[k10]

Hi,
I was discharged (2 credit cards) and my case was closed in February. I still have $220k outstanding in private student loans. I'm 25 and have a job now, but on a 50k salary there is no way I can pay down this debt -I'm trying, but the math is impossbile. I'm thinking of reopening the case to file an AP. I'd love to hear your thoughts. Thanks.

[SMinGA]

I'm no expert, but I believe APs get filed by creditors to object to the discharge of certain debts.

[HHM]

Actually, you don't need to reopen your BK. So long as the student loans were "listed" in your BK. You can file the Adversary Proceeding at any time. The AP is a separate case with its own case number. The only requirement to file the AP to discharge student loan debt is that you received a discharge in the underlying BK. You can file the AP at anytime thereafter, even years later.

Now, realize, these cases are NOT easy to win. To even have a good shot at it, you need to hire two expert witnesses to testify as to your earning capacity and job prospects. Also, being so young, it will be an uphill battle to get them discharged. The average cost to do a case like this, and do it for real, is about $10,000 to $15,000. The case is full-blown litigation.

[k10]

Thanks, HHM. And I am aware of the risks and difficulty; I just fear I have no choice. I'm paying $2k/month to meet the minimums on the debt.

I live in NYC where the garnishment cap is 10% of gross wages. What's your take on going into default and getting the 5k taken out through judgement. I'd be paying out much less than I currently am.

[nc73]

I'd go the garnishment route. File again when the law changes, of course you'd have to wait a long while. What you should have done was wait it out until private student loans become dischargeable. Of course who knows when it will become law, or even if it passes.

[JackBondLove]

Thanks, HHM. And I am aware of the risks and difficulty; I just fear I have no choice. I'm paying $2k/month to meet the minimums on the debt.

I live in NYC where the garnishment cap is 10% of gross wages. What's your take on going into default and getting the 5k taken out through judgement. I'd be paying out much less than I currently am.

Well, 10% doesn't sound too bad. You can still sock away money in your retirement accounts. You would just have to live having little or no money in any seizable bank account, and having collection agencies call you all the time.

[Brazzy]

With the laws being changed I wouldnt hold my breath on that one. Understand that a lot of private student loans are guaranteed by non profit organizations. With that said the government is going to be very careful about jacking non profit organizations whose intention is to help kids go to college.

As for the AP cases right now. The "I cant get a good job" approach is not working at all. The cases are mostly successful due when medical issues or extenuating circumstances come into play. The strangest case was a kid going to medical school had a mental breakdown while finishing up the last few courses. It was determined that since he would not be able to obtain a medical license , then he would never make the salary necessary to support the loans. However, the student loans still were not considered discharged. It was settled to the terms that the creditor agreed to not collect on the debt unless the debtor made $X in a single year. The creditor had the right to request tax documents every year.

Beyond that its mostly medical issues where you see the success. Kid wants to be a brain surgeon. Loses both hands in a snow blower accident. Never gonna be a surgeon. Discharged.