Hello, this is Jeff Kelly and Today is August 31, 2020. Today’s title of what I’m going to talk about is why should student loans be dischargeable in bankruptcy? I believe that it is way past time to end the economic slavery that millions of college graduates across our country suffer and make student loans dischargeable in bankruptcy just like they were back in the 90s. Can you imagine the nightmare of living with a $200,000 debt that just hangs over your head increases with interest every single year? For many Americans this nightmare is their daily reality. Want to finance a house? Forget it. Want to finance a car? Forget it. How about getting a loan to start a new business? Forget it. When a dark cloud of student loan debt hangs over your head moving forward is economically impossible. Now, prior to 1976, student loans could be discharged just like any other debt. And over the years, restrictions were added.
The first restriction was you had to wait five years after graduating before you could discharge student loans. Then the goal line got changed to seven years and then in 1998, the hammer was completely put down. Student Loans could virtually no longer be dischargeable in bankruptcy. As a result, if you want to go find a good summary on the internet about the history of student loans and bankruptcy, you can go to savingforcollege.com backslash article backslash history of student loans bankruptcy discharge the consequences of making student loans non-dischargeable in bankruptcy. Since 1998, the cost the cost of a college education has more than doubled in real dollar terms. Think about that doubled.
When I went to college, the vast majority of college housing was extremely Spartan, shall we say? Today, most college dorms look similar to a resort, so that colleges can attract students lower them into huge amounts of federally backed debt and make millions. Most colleges now have bloated bureaucracies due to the lack of real market forces. The connection between the true economic value of a college education has been disconnected from the value that said education will produce because of the restrictions on dischargeability in bankruptcy. Many people have been sold on the idea you cannot have a successful life unless you have a college degree. It’s becoming increasingly it’s becoming an increasingly popular choice for many young adults to forego college completely because of the high risk that they will never be able to repay the loans. As a result, someone who should go to college may never develop their full potential because of this artificially inflated price. Currently, the federal government keeps footing the bill for unpaid student loans, colleges get their money from the federal government whether or not a student loan a student ever repays them. Where’s the incentive to keep costs down and connected to the reality of whether or not the loan will ever be repaid?
Now my argument for bankruptcy.
Many famous people in US history have filed bankruptcy and gone on to do great things for the world. Henry Ford’s first automobile company did not make it. Can you imagine a world without Henry Ford? Thank goodness he was able to file bankruptcy, recover and get a fresh start. What about Walt Disney? Can you imagine a world with no Disney? No Mickey Mouse, no disney world? Thank goodness while Disney was able to file bankruptcy, recover and get a fresh start. Because of the current non-dischargeability of student loans, many college graduates who have tons of student loans have never been able to recover from the debt load. What a horrible shame. How many marriages never took place? How many children were never born? How many houses were never built? How many businesses were never started because of the dark cloud of excessive balances on student loans. Any answer to these questions is pure conjecture. But I think it is safe to say that if we could estimate it, the answer would be in the millions.
Nerdwallet reports that 5.2 million student loans are currently in default. Keeping these loans non-dischargeable in bankruptcy does not result in them magically being reimbursed by the students who borrowed 99% of these loans will still never get paid. Bankruptcy has made the United States the best country in history. If you want more detail on that, go to my website, www.kellycanhelp.com and type that in. I’ve got a link to it also on my blog.
Giving people a second chance make sense in so many ways. Remember, there but for the grace of God go you. Bankruptcy is not some magic button people press to make all their debts go away. To file bankruptcy, the debtor must submit documentation under oath to a court of law showing that they are in fact bankrupt. People who attempt to abuse the system end up in jail. The lawyers who work for the United States bankruptcy trustees take their jobs super seriously. And they will zealously enforce the law. My point is that when someone can afford to pay their student loans, they should continue to pay their student loans, even if the loans become dischargeable once again. In conclusion, our bankruptcy system should be allowed to determine who should and should not repay their student loans. Thank you for tuning in.
Transcript: Intro Speaker: It’s time for KellyCanHelp hosted by Jeff Kelly, Attorney at Law with the law office of Jeffrey B. Kelly. And now here’s Jeff Kelly. Jeff Kelly: Hello, this is Jeff Kelly. And in today’s episode, I want to answer the question, is it possible to lose your home in a chapter 7 bankruptcy case? And the answer is yes. You know, this current real estate market is unbelievable. I’ve, I’ve been in practice since 1998. And I’ve never seen anything like it. I’ve never seen a real estate market where somebody in Rome, Georgia can put a house on the market and it sells within a week. So, because of that real estate values have become very problematic for chapter 7 clients. Let me give you an example. Let’s say you have somebody who, you know, 10 years ago, they bought a house for $100,000. And today, the tax assessor says it’s worth 120 Well, that wouldn’t be a problem. In in Georgia, a single person can exempt $21,500, a married couple can exempt $40-43,000. So when when could it become a problem? Jeff Kelly: Well, for one thing, even though the tax assessor says the house might be worth 120,000, it’s possible that it’s worth more, and a chapter 7 trustee. They are not bound by what the tax assessor says they’re not bound by what Zillow says, you know, honestly, they’re not even bound by what an appraiser says, a chapter 7 trustee has a strong incentive to sell your house if they can make money off of it. That’s, that’s how chapter 7 ...
Transcript: Hello! this is Jeff Kelly, and in this podcast today I’m going to talk a little bit about How to fight a creditor lawsuit. So, In Georgia, consumers have the right to fight back against creditor lawsuits. In my experience, the people who I have seen have the most successful outcomes are victims of identity theft. Before I get into it, I wanna go something real quick. A lot of people will call me and say “Why in the world am I getting a letter from you just because I’m being sued?” Well, the answer is. I am a bankruptcy attorney and in my law practice, we send out a ton of direct mail advertisements to people who are getting sued. Often times, our letters will get to people before the sheriff will serve the lawsuit, particularly during this corona time. A lot of sheriff officers are being delayed for obvious reasons and our letter gets there first. So people understandably wanna know when they’re gonna get the information. Usually is about a week or two after our letter hits, but the sheriff is coming he will serve you with a complaint. And it’s very important to make note of the date you are served of the complaint because you have 30 days to respond to it. If you don’t respond, you’re gonna end up with a default judgment against you and that is very very bad because you could lose a lot of important rights. So, what you do if you’ve got a creditor lawsuit against you and you want to fight it? Well, if we’re talking about ...