Thinking about discharging your student loan debt? Read about these cases!

[JackBondLove]

http://openjurist.org/284/f3d/773/goulet-v-educational-credit-management-corp

The Court wouldn't give a discharge even to this guy!

"if the leveraged investment of an education does not generate the return the borrower anticipated, the student, not the taxpayers, must accept the consequences of the decision to borrow."

http://openjurist.org/267/f3d/324/in-re-patricia-brightful

A woman gets sexually harassed (and thereby blackballed from work), becomes suicidal over the harassment, and she can't get a discharge.

"dischargeability of student loans should be based upon the certainty of hopelessness, not simply a present inability to fulfill financial commitment."

"[a] finding of undue hardship is reserved for the exceptional case and requires the presence of unique or extraordinary circumstances which would render it unlikely that the debtor ever would be able to honor his obligations"

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Editorial note:

There should be a law that any student looking to get a student loan - or at least a loan that is no-dischargeable - needs to go through a special debt seminar, with cases like these presented, so that they really know what they are getting into. Maybe then, little Johnny may choose State U, or even better, Podunk Community College, instead of IvyPrice U - or even better yet, do work study so that there would be no debt!

[Fresh]

Thanks for These!

JoeBondLove,

I appreciate you providing the links to these. After reading the opinions, I think both of these cases lacked a ton of evidence. With the second one, I really got the impression that if that woman had documented her psychiatric problems, the case would have been different. "Glaring psychiatric" problems as viewed from a Bankruptcy Court's perspective was obviously not enough. The appellate court even mentioned "expert testimony" and that this was not the case where there was any.

With the first case, I think the situation would have been different if that man had sought in-patient treatment, and perhaps had been unsuccessful over a period of time, like if he had gone several times and had just been unable to make it. I think the vast majority of the population knows now that addicts of all kinds fall many times before making it. It's just a rough road to go for most of them.

One of the things I absolutely agree with you on is that students should absolutely be aware of what they are signing with student loans of ALL kinds. But, one thing I believe is that a lot of students really do not understand that they will have to support themselves as well as pay these loans. Additionally, some do not believe they will be without a job for any period of time. There's something missing in the equation of education and doing well automatically equals a job. Too many of us here and elsewhere know that you can do everything "right" and life has a way of creating hardships and challenges. It's just the way it is.

Someone had posted here not long ago about the rate of student loan default which is steadily increasing. That with increased rates of underemployment and unemployment are horrendous trends and the consequences even worse.

What I am hoping is that for many who have student loans is that more employers will provide incentives to pay portions of the loans. The federal model is excellent. A friend of mine works at the SEC and she has been getting up to $10k extinguished for each year of service worked. They cap it at $60k

I also think that in both of these cases perhaps it would have been an incentive for both parties to basically pay these loans back in kind even if they were not provided with pay. Let's say that man was able to work even part-time for a non-profit and get some of that debt extinguished. I think a lot of new graduates would be glad to do that. Having that option would be a good choice for many.

[lifemoveson1]

Always get a second opinion and if necessary, a third...and never forget to trust your own judgment and pure common sense...sometimes, folks in the legal community don't get it right and we are left on our own to cringe and live with the judicial consequences of that information...always check with another source or alternative.