Bankruptcy Dishonesty Means No Discharge. . . and Worse

Overwhelming debt causes a great deal of stress. You may lose sleep, become angry, or get scared. Fortunately, the federal bankruptcy laws can restructure your debts, provide a fresh start and alleviate your stress.

However, it is critical that you play by the rules.

A man in Tama County, Iowa, recently discovered the importance of honesty and fair dealing during the bankruptcy process. According to the Waterloo Cedar Falls Courier, Jay Freese was convicted of bankruptcy fraud and sentenced to 18 months in federal prison. He was also ordered to pay a $5,000 fine, a $100 civil penalty, and will be on supervised release for three years following prison.

According to court records, Freese ran into debt problems with his hog operation. He obtained an operating loan from Lincoln Savings Bank and put up equipment including a Bobcat, Kubota tractor and ATVs as collateral. He later traded the ATVs for a corn-burning stove valued at $10,700, then filed for Chapter 7 bankruptcy protection. Freese did not list the ATVs or the stove in his bankruptcy filing, even though he still owed Lincoln Savings $354,000.

The bank cried foul after it discovered that Freese had not listed the collateral securing its loan. When questioned, Freese said that he sold the Bobcat and the tractor. Investigators subsequently discovered that there was no sale. They also discovered that he had given his sister $5,700 in cash and she wrote a check in that amount so it would look like payment for the equipment.

A search of Freese’s property by FBI agents found the equipment, along with five firearms, a boat, a snowmobile, a collection of farm toys and $22,102 in cash, none of which was disclosed in the bankruptcy. After being discovered, he pled guilty to bankruptcy fraud charges. Additionally, the bankruptcy court denied discharge of all of Freese’s debts.

Bankruptcy is powerful medicine, but it is only available for debtors who are honest about their income, expenses, assets, and debts. Dishonesty during bankruptcy can mean loss of bankruptcy protection as well as criminal charges.

Rental History Useful for Rebuilding Credit

The average American’s FICO credit score hit an all-time high this past April, nosing in at 692. FICO scores range from 300 to 850. Although judgment of credit scores is often in the eye of the beholder, anything between 700 and 749 is considered a good score, with the best scores ranging 750 and higher.

Debtors emerging from bankruptcy are often far below the national average credit score, so rebuilding and improving is a high priority for many. Fortunately, Experian and TransUnion, two of the country’s largest credit reporting bureaus, are now allowing landlords to report rental payment histories for tenants. According to an article in the Washington Post, “nearly 20 percent of renters saw an increase in their score of 10 points or more after just one month” once rental payments were included in the consumer’s credit profile. An extra 10 points on a credit score can mean the difference between a “poor” credit score and an “average” credit score, which translates to a better interest rate and a lower monthly loan payment.

There are two ways for a landlord to submit rental payments to a credit bureau (a tenant may not self-report). The first is when a landlord agrees to receive payment through a third party service, such as RentTrack. Tenants are able to pay rent through RentTrack via credit card or echeck directly from a bank account. There is a small processing fee for these services.

The second way to report rent payments is when a landlord provides a history of rental payments to the credit bureau, such as through TransUnion’s Resident Credit program.

Another option for consumers to include rental payments in a credit analysis is to use an alternative credit data company such as ECredable. These credit bureaus will verify a tenant’s rental payment history and include this data in a credit report and score, which can be used during a loan application. Under federal credit regulations, the mortgage company is required to consider this information during its loan approval process.

Your bankruptcy discharge will provide a fresh start, but it is up to you to rebuild your credit score. This takes time and attention. Your bankruptcy attorney can help you analyze your situation and make recommendations for improving your score after bankruptcy.

Filing Chapter 13 after a Chapter 13 Discharge

Chapter 13 cases last 3 to 5 years. A lot can happen in that time. In some cases, a debtor may need additional bankruptcy relief. This article will address some of the rules of filing a second Chapter 13 case after receiving a Chapter 13 discharge.

Eligibility for Chapter 13 discharge

The law restricts the availability of a Chapter 13 discharge if the debtor received a Chapter 13 discharge in a previous case. Section 1328 of the Bankruptcy Code states that a court may not grant a Chapter 13 discharge to a debtor who has received a Chapter 13 discharge in a case filed under chapter 13 of this title during the 2-year period preceding the date of such order.

The time period described in Section 1328 is measured between filing dates, not discharge dates. To illustrate, suppose a debtor files her first Chapter 13 case on January 3, 2013, and she receives a Chapter 13 discharge. She is eligible to file a second Chapter 13 case and receive a discharge on January 3, 2015.

It does not matter under what chapter the original case was filed. For instance, if a case was filed as a Chapter 7 on January 3, 2013, converted to Chapter 13, and discharged, the debtor is still eligible to receive a second discharge on January 3, 2015 (2 years after the filing date). This is because the original case commencement date did not change, even though the debtor converted to another bankruptcy chapter.

Note that Chapter 13 cases generally last between three and five years, meaning that a debtor could hypothetically receive a Chapter 13 discharge, then immediately file a second Chapter 13 case that is also eligible for discharge.

Eligibility to be a Chapter 13 debtor

The time limit contained in Section 1328 is not a statute of limitations and does not disqualify the individual from filing Chapter 13 bankruptcy. There is no general limit to the number of times or frequency an individual may file Chapter 13 bankruptcy. That said, a debtor is ineligible to be a bankruptcy debtor for 180 days after the Chapter 13 case closes if it was dismissed:

  • by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case; or
  • after the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay.

See 11 U.S.C. § 109(g).

Applicability of the Automatic Stay

The Bankruptcy Code also limits the reach of the automatic stay in a case filed after a Chapter 13 discharge. The automatic stay is effective for only 30 days if you had a bankruptcy case pending within 365 days of the case filing. See 11 U.S.C. §§ 362(c)(3) and (4). The bankruptcy court may extend the automatic stay if your case is filed “in good faith” and you are not abusing the bankruptcy system. Even if the automatic stay is terminated, most courts find that the property of the bankruptcy estate is still protected from creditors. That may include your house or your vehicles. Additionally, garnishments of post-bankruptcy wages are generally protected in a Chapter 13 case. 

Filing Chapter 7 after a Chapter 7 Discharge

Bankruptcy is meant to provide debt relief to honest, but unfortunate individuals. For some, bad luck seems to hang around a while. For others, bad luck seems to have moved in permanently. Unfortunate individuals with continuing or reoccurring debts may find relief through the federal bankruptcy laws which can provide a third, or even fourth opportunity to start fresh.

Eligibility for Chapter 7 discharge

There are a few wrinkles in the law for repeat Chapter 7 filers. First, the federal law limits the availability of a Chapter 7 discharge if an individual has received a Chapter 7 discharge in a previous case. Specifically, Section 727 of the Bankruptcy Code states that a court may not grant a Chapter 7 discharge if:

the debtor has been granted a [Chapter 7 discharge] in a case commenced within 8 years before the date of the filing of the petition.

This section confuses many debtors and some bankruptcy attorneys. The time period is measured between filing dates, not discharge dates. To illustrate, suppose a debtor files her first Chapter 7 case on January 3, 2010, and she receives a Chapter 7 discharge. She is eligible to file a second Chapter 7 case and receive a discharge on January 3, 2018.

It does not matter under what chapter the original case was filed. For instance, if a case was filed as a Chapter 13 on January 3, 2010, converted to Chapter 7, and discharged, the debtor is still eligible to receive a second discharge on January 3, 2018 (8 years after the filing date). This is because the original case commencement date did not change, even though the debtor converted to another bankruptcy chapter.

Eligibility to be a Chapter 7 debtor

The time limit contained in Section 727 is not a statute of limitations and does not disqualify the individual from filing Chapter 7 bankruptcy. There is no general limit to the number of times or frequency an individual may file Chapter 7 bankruptcy. That said, a debtor is ineligible to be a bankruptcy debtor for 180 days after the Chapter 7 case closes if it was dismissed:

  • by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case; or
  • after the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay.

See 11 U.S.C. § 109(g).

Applicability of the Automatic Stay

The Bankruptcy Code also limits the reach of the automatic stay in a case filed after a Chapter 7 discharge. The automatic stay is effective for only 30 days if you had a bankruptcy case pending within 365 days of the case filing. See 11 U.S.C. §§ 362(c)(3) and (4). The bankruptcy court may extend the automatic stay if your case is filed “in good faith” and you are not abusing the bankruptcy system. Even if the automatic stay is terminated, most courts find that the property of the bankruptcy estate is still protected from creditors. That may include your house or your vehicles. It would not protect you from garnishments of post-bankruptcy wages in a Chapter 7 case.

If lady luck seems to have lost your address, you may need to schedule another consultation with your bankruptcy attorney. A second Chapter 7 case may provide the means for another chance at a fresh start. 

Beware "Too Good to Be True" Legal Advertising

Bankruptcy attorneys make many promises. Many of these promises are true, some are half true, and a few are not true at all. Today’s article will investigate whether a certain bankruptcy advertising promise is true, kind of true, or a lie. Specifically, the promise by an attorney to “start” a bankruptcy case for $100 (or $149, or $199, or $249, or $299). This sort of promise is common on Craigslist and weekly advertisement pages found at the laundromat. Is it true?

What does “start” mean? Let’s start our investigation with a key word in the promise: “start.” The law is very clear about when a bankruptcy case “starts.” Section 301 of the Bankruptcy Code clearly states:

       (a)   A voluntary case under a chapter of this title is commenced by the filing with the bankruptcy court of a petition under such chapter by an entity that may be a debtor under such chapter.

Consequently, a bankruptcy case is started (commenced) only when a petition is filed with the bankruptcy court. To find out if an attorney can start a bankruptcy case for only $100, let’s turn to the economics of the case:

Credit Counseling. An individual must complete a credit counseling class with an approved agency before he or she is eligible to be a debtor in bankruptcy. The typical cost for this class is around $50. A truly indigent person may qualify for a fee waiver. Waivers are reserved for the most desperate of situations, and when the attorney is working pro bono. Accepting $100 from the client will likely disqualify the person from a fee waiver.

Filing Fee. The court fee for filing a bankruptcy case is $306 (Chapter 7) or $281 (Chapter 13). Filing fees may be made in installments, not to exceed four payments within 120 days after the petition is filed. Conceivably, a debtor could apply to pay the court filing fee in installments and not pay anything (or $50) at the time of filing.

The debtor may also apply for a waiver of the filing fee, but the court will only approve a fee waiver if the debtor’s attorney is not paid for his or her work during the case.

Attorney Fees. Bankruptcy attorneys do not generally work for free. Accepting payments after filing for pre-bankruptcy Chapter 7 work violates the bankruptcy automatic stay and creates an ethical conflict because the attorney is a creditor. Debtors do not have to pay attorneys that make “under the table” deals to accept post-filing payments in Chapter 7 cases. Attorney fees are often paid in installments during a Chapter 13 case, although most attorneys require some money up front for pre-filing work.

Is the promise true or not? Probably not. This advertisement could be true if the attorney will file a fee installment agreement and accept attorney fees in payments during a Chapter 13 case. It could also be true in a Chapter 7 case if the attorney is representing the client for $50, pro bono, or agrees to accept a small post-petition fee and discloses the agreement to the bankruptcy court.

The truth is that the promise to “start” a bankruptcy case for $100 is often simply an offer to put that money into the attorney’s bank account and commence some kind of pre-bankruptcy work. This advertising is usually a bait-and-switch ploy, misleading at best, and unethical.

You may want to ask yourself: if an attorney advertises for clients using half-truths or outright lies, do you really want this attorney representing you in an important legal matter? 

Hard Truths about Bankruptcy

 In the movie Jerry Maguire, Jerry’s crisis of conscience leads him to write a company memo/mission statement for his sports agency. The title of the memo is “Things We Think And Do Not Say.”

It promptly gets him fired.

Every profession spins its services and has its “dirty little secrets.” Bankruptcy is no different. The benefits of filing are well-known. They include:

  • Stopping lawsuits, creditor harassment, and other debt collection activities
  • Protecting real and personal property
  • Eliminating or reducing unaffordable debts

But filing bankruptcy cannot guarantee happiness, or future prosperity, and, sometimes, debtors don’t even receive the fresh start that attorneys promise in the yellow pages. There are positive and negative aspects to filing bankruptcy, and there are risks. Knowing the negative consequences of filing bankruptcy can help you make an informed choice.  Let’s look at a few hard truths about bankruptcy:

Bankruptcy wrecks your credit

Fair, Isaac and Company (FICO) reports that an individual with a 680 credit score will lose between 130 and 150 points by filing bankruptcy. A bankruptcy filing is a public record that can stay on a credit report for up to ten years from the date the case is filed. Each debt discharged during a bankruptcy case will be reported as “included in bankruptcy” and will remain on a credit report for up to seven years.

[Positive aspect: some credit scores actually increase after filing bankruptcy. Bankruptcy stops the continuation of negative reporting and helps you recover quickly from burdensome debt.]

Bankruptcy does not discharge all debts.

Filing bankruptcy does not mean that you can “walk away” from all of your financial obligations. Some debts are excluded from the bankruptcy discharge as a matter of law. Secured debts, such as a car or house payment, must (generally) be paid for or the property must be surrendered. Certain debts are deemed non-dischargeable, such as child support payments and some taxes. Other debts are not dischargeable because of bad acts, such as charging up credit cards on a spending spree on the eve of bankruptcy.

[Positive aspect: most debts are dischargeable and will never again trouble you.]

Bankruptcy can affect your employment

Bankruptcy can cause the loss of a security clearance, which can mean loss of a position and ultimately termination of employment. There is no prohibition for private employers who may freely discriminate against a person with a bankruptcy, which sometimes happens during the hiring phase.

[Positive aspect: federal law prohibits employers from firing employees for filing bankruptcy. Bankruptcy stops collection calls and clears up debts that may negatively impact employment.]

Bankruptcy Affects Future Housing

Federally guaranteed home loans are generally not attainable for several years after a bankruptcy. Mortgage brokers call this post-bankruptcy period “seasoning,” and the average waiting period is two to four years. Additionally, there is no legal prohibition against a landlord discriminating against an individual with a bankruptcy on his or her credit report. Some bankruptcy debtors are either rejected during the apartment application process or forced to pay a larger security deposit to guarantee future rental payments.

[Positive aspect: many individuals are able to qualify for home loans two years after filing bankruptcy.]

Buying a Vehicle before Filing Bankruptcy

 While having reliable transportation is important for most American families, it can be critical for a debtor in Chapter 13 bankruptcy. The average Chapter 13 case lasts three to five years, and during that time the debtor is prohibited from incurring additional debt without court approval. While it is possible to get court approval for a different vehicle during the bankruptcy case, it is not an easy process when factoring in a conservative bankruptcy court judge, the objection from the bankruptcy trustee, and the scarcity of lenders and auto dealers who will work with a debtor in bankruptcy. Consequently, a debtor who purchases a vehicle during bankruptcy often overpays for a vehicle he or she doesn’t want.

The answer for many debtors preparing to enter Chapter 13 bankruptcy is to finance a new vehicle before filing bankruptcy. There are several good reasons to do this, including:

  • A newer vehicle is less likely to fail than an older vehicle, and a new vehicle has a “bumper to bumper” warranty that will last three to five years (or more). That means that the bankruptcy case will not fail because of an expensive vehicle repair, or the need to purchase a new vehicle.
  • Many debtors can benefit from a new vehicle purchase on the bankruptcy Means Test. The Means Test calculates disposable income that is available to pay unsecured creditors (like medical bills and credit cards). For some debtors, the purchase of a new vehicle will qualify the debtor for Chapter 7 bankruptcy. For others, money that is spend on secured creditors (like a car payment), will reduce the amount available for unsecured creditors. For most debtors, the issue is simply this: would the debtor rather spend money buying a new car, or repaying credit cards during the bankruptcy case?
  • The Bankruptcy Code generally allows a vehicle to be crammed down to value, unless it is purchased within 910 days of the bankruptcy filing. See Section 1325(a), hanging paragraph. While cram down is not available to modify the principle amount owed on a “910 vehicle,” most courts allow the interest rate to be modified. The U.S. Supreme Court has stated that the proper interest rate to use in a cram down case is about 2% over the prime interest rate (called the Till rate, after the case). See Till v. SCS Credit Corp., 541 U.S. 465 (2004). As an example, if a Chapter 13 debtor obtained a vehicle loan at 19% interest, the loan interest rate could be crammed down to a more reasonable interest rate. This rate may be discovered by contacting the local Chapter 13 trustee’s office, or it is often posted on the standing trustee’s website.

For many debtors, purchasing a new vehicle prior to bankruptcy is simply planning for bankruptcy success. The U.S. Supreme Court, in Milavetz, Gallop & Milavetz, P.A. v. U.S., 559 U.S. 229 (2010), specifically approved the idea of incurring a debt just prior to a bankruptcy filing, so long as the debtor intends to pay the debt in full and doesn’t incur the debt with a “bankruptcy motive.”

If the impetus in financing a new car prior to bankruptcy is a “bankruptcy motive,” the court will find that the debtor has not acted in good faith and the he (and his attorney) will be answering questions regarding abuse of the bankruptcy system. In order to stay on the “right side of the law,” a vehicle purchase on the eve of a Chapter 13 bankruptcy filing should be necessary, “sensible” (one judge quipped that he would not allow a debtor to keep a car nicer than his own), affordable, reliable, and meet the needs of the debtor’s family. Think of it this way: a $20,000 Ford Focus is fine, a $30,000 Toyota Camry maybe ok if it is within the debtor’s budget and means, and a $70,000 Lexus is not. See a common sense discussion of purchasing a new car on the eve of bankruptcy in the case of In re Wolf, No. 13-13174-BFK (Bankr. E.D.Va, October 3, 2013).

When purchasing a vehicle before bankruptcy, be mindful that the vehicle title must be recorded within 30 days in order to create a valid and enforceable lien on the vehicle (called “perfecting the lien”). See 11 U.S.C. § 547(c)(3)(B). If the debtor files bankruptcy and the lender records its lien after the 30 day period, the bankruptcy trustee may be able to set aside the lender’s lien as an avoidable preference and declare the vehicle free and clear. The trustee can then take and sell the vehicle. Section 547 offers the debtor a “safe harbor,” but only if the lien is recorded within 30 days of purchase, regardless of what the state law provides. See Fidelity Financial Services, Inc. v. Fink, 522 U.S. 211 (1998). To make matters worse, Section 522(g) prevents a debtor from claiming exemptions in voluntarily transferred property that the trustee recovers for the estate. See Russell v. Kuhnel (In re Kuhnel), 495 F.3d 1177 (10th Cir. 2007). The debtor may lose both the vehicle and any vehicle exemption in equity. This is certainly a grave penalty for the debtor, especially since the debtor did nothing wrong.

The solution to this trap is simple: before filing, ensure that the lender or lienholder has recorded its interest with the state Department of Motor Vehicles timely. Having a copy of the recorded lien for the bankruptcy trustee will help clarify the matter.

If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

Should You Change Banks When Filing Bankruptcy?

Every night, while the rest of the country sleeps, Wells Fargo Bank cross-checks all newly filed Chapter 7 bankruptcy petitions against its list of account holders. If a Wells Fargo account holder has filed bankruptcy, the bank may place a “temporary administrative pledge” (a “hold”) on the debtor’s account(s). This hold is a certainty if the debtor has a bank account and owes Wells Fargo money. The bank then sends a letter to the Chapter 7 trustee requesting instructions as to how Wells Fargo should dispose of the account funds.

When a debtor files Chapter 7 bankruptcy, all of his assets become property of a bankruptcy estate and are under the control of the bankruptcy trustee. The debtor may claim assets as exempt, such as bank account funds, but the claim is only an interest in the funds (at least according to the Supreme Court decision, Schwab v. Reilly). A party in interest has 30 days after the meeting of creditors to file objections to the debtor’s exemption claim. Only then is the property actually exempt.

So what does all this mean?

It means that Wells Fargo can place a hold on your Wells Fargo bank account and refuse to release your money until 30 days after your 341 meeting has concluded. That could be more than two months after you file! That is the consequence of a recently decided case from the Ninth Circuit Court of Appeals, Mwangi v. Wells Fargo Bank, No. 12-16087 (9th Cir. August 26, 2014).

The Ninth Circuit in Mwangi stated that debtors lacked standing to assert that Wells Fargo violated the automatic stay when it froze their account because: (1) the debtors had no right to possess or control the account funds during the 30 day period for objections to claimed exemptions (the property was under the control of the trustee); and (2) after the objections period ran, property claimed as exempt passed out of the bankruptcy estate. See Section 522(l); see also Smith v. Kennedy (In re Smith), 235 F.3d 472, 478 (9th Cir.2000)(“[i]t is widely accepted that property deemed exempt from a debtor's bankruptcy estate revests in the debtor”).

Based on this ruling, Chapter 7 debtors should examine their banking situation prior to filing bankruptcy, especially when Wells Fargo is involved. Opening up another account at a different bank after filing bankruptcy and changing all direct deposit accounts may help. An experienced bankruptcy attorney can review your case and recommend a strategy to avoid a bank account freeze. 

If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

Social Security Garnished to Pay Student Loans

Student loan default is an epidemic problem among senior citizens. The default rate currently stands at over 12%, more than three percentage points higher than borrowers under 30 years old. According to the U.S. Treasury, more than 156,000 seniors had money taken from their monthly Social Security checks to pay delinquent student loans last year. In contrast, the number of Social Security checks garnished for student loan payments during 2000 was. . . six.

The Trouble with Co-Signing

Many older Americans find themselves deep in student loan debt due to a co-signer obligation. Many are unaware that co-signing a student loan obligation makes the co-signer obligated for 100% of the loan. If the student/borrower is unable or refuses to pay, the lender may seek to collect from the co-signer.

Government-Guaranteed Student Loans

If a defaulted loan is government-backed, the government may collect from government funds owed to the debtor. That could be Social Security, disability checks, income tax refunds, government retirement pensions, or other government money the debtor is entitled to receive. The government may garnish 15% of the entitlement through the Federal Payment Levy Program.

Bankruptcy Can Help

While it is well-known that student loans are difficult to discharge, filing bankruptcy can provide time to repay student loans, or simply provide a breathing spell from collection. During a Chapter 13 case, the bankruptcy automatic stay protection stops garnishment and other collection actions against the debtor and all co-signers -- regardless whether the student loan is paid during the bankruptcy case.

If you are in danger of garnishment from a defaulted student loan, speak with an experienced bankruptcy attorney. Your attorney can review your situation and discuss your options for repayment, forgiveness, or discharge using the federal law.

 If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

Are Your Student Debts Student Loans?

 Baseball pitcher Tom Glavine was recently enshrined into Major League Baseball’s Hall of Fame in Cooperstown, New York. Glavine’s Hall of Fame plaque describes him as a "Durable, dominant and deceptive starting pitcher whose control, change of speeds and placement of pitches translated into 305 wins." Glavine was renown for pitching to the corners of the plate, away from the batter’s strength.

Glavine’s approach is copied by many bankruptcy attorneys when attempting to discharge a student loan. The federal courts have interpreted the “undue hardship” standard for discharging a student loan as an extremely high bar. In most cases, seeking to discharge a student loan on the basis of undue hardship is simply setting the creditor up for a home run.

Instead, many bankruptcy attorneys nibble at the corners of the Bankruptcy Code.

One discharge tactic is to exploit the distinction between student loans described in Bankruptcy Code Section 523(a)(8)(A)(i) and student debts defined in Section 523(a)(8)(A)(ii). A nondischargeable student debt is “an obligation to repay funds received as an educational benefit, scholarship or stipend[.]” The key language here is “repay funds.” Some courts have found that “an obligation to repay funds” can only arise after funds are actually distributed. If no money changes hands, then the debt does not qualify under Section 523(a)(8)’s exception to discharge. See In re Oliver, 499 B.R. 617 (Bankr. S.D. Ind. 2013); In re Christoff, 510 BR 876 (N.C. Cal. 2014).

This approach is useful when a college or university keeps a student “tab” for tuition, fees, and/or education-related expenses. Since no funds are distributed, no obligation to repay is created. Consequently, these debts are not excepted from the bankruptcy discharge.

Nibbling at the corners can mean real victories on the ball field or in the bankruptcy court. If you are obligated for student debts or student loans, speak with an experienced bankruptcy attorney and discuss your options. 

If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com