Student Loan Debt
Posted: Mon Oct 20, 2014 11:26 am
I have a client with similar facts and we are preparing to file the Chapter 7 case to discharge credit card debt so she can focus on paying the student loans.
We are prepared to show the amount of the student loans that the debtor used for tuition, books, commuting to campus, etc. for the non-consumer debt argument.
Peter M. Lively, J.D., M.B.A.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400 * Toll Free: (800) 307-3328 * Fax: (310) 391-2462
On Monday, October 20, 2014 9:07 AM, "nath don rogerclim@gmail.com [cdcbaa]" wrote:
Given how common I imagine the scenario of PC's seeking to avoid the means test through a big pile of student debt should be, I am surprised how hypothetical and uncertain this discussion has been. If these cases haven't yet arrived, my money is that there is a flood of them around the bend.
What is the local practice? I have an upcoming case in which my PC is an unbarred lawyer with loads of law school debt. She earns more than the median income. One available approach would be for her to omit the means test entirely while providing some kind of supplemental declaration stating that she sought her law degree for a business purpose which clearly seems satisfied. Another approach would seem to be to file the means test but then to deduct the student loan payments to bring her into a 7.
Is one approach preferable/lower risk than the other?
On Mon, Aug 11, 2014 at 1:28 PM, Jay Fleischman bankruptcy@gmail.com [cdcbaa] wrote:
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>In the case of In re Kelly, 841 F.2d 908 (9th Cir. 1988), the court determined that if a debt isnt incurred for business ventures or other profit-seeking activities then it is considered to be consumer debt. This reasoning was followed in In re Price, 353 F.3d 1135 (9th Cir. 2004), which confirmed that the purpose of the debt is the determining factor.
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>With that in mind, I'd look into your debtor's rationale for getting the master's degree. Was it to advance in his or her chosen profession? If so, I'd argue that it isn't a consumer debt.
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>Jay S. Fleischman, Esq.
>Shaev & Fleischman, LLP
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