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Cape Girardeau Bankruptcy Blog

Why student debt is nearly impossible to discharge in bankruptcy

If you research Chapter 7 bankruptcy, you may come across the confusing fact that student loan debt is not dischargeable except under narrow conditions. Especially if you aren’t able to pay your student loan bills, this may seem unreasonable, but this is a special case for several reasons.

According to the Department of Education’s website, a graduate must prove “undue hardship” in order to discharge federal student loans, but success is exceptionally rare. The court defines hardship fairly restrictively; you must not be able to keep a minimal standard of living while paying student loans. A court often reserves this title for the most destitute situations.

When bad things happen to good people

John Smith (not his real name) began to receive collection phone calls after he went from a two-income household down to a one-income one. Then, John lost his job when his employer needed to reorganize. If that wasn’t bad enough, his wife took his hunting dog when she left. Yes, John is having a country music kind of year.

The thing about not being able your bills is how it can affect you. You start losing sleep, you don’t eat as much, and on many days, you just don’t feel like getting out of bed. John is suffering from financial stress.

What you can do about automatic stay violations

One of the major benefits to filing bankruptcy is the automatic stay, which pauses creditor harassment and other actions while you manage your financial situation with the court.

When you file bankruptcy in Missouri, the court will send a notice to the creditors you list on your application. This will instruct them to abide by certain rules until the judge decides how to proceed. Despite the automatic stay, however, some debt collectors might continue to harass you.

The trustee's role in bankruptcy proceedings

When a person files for bankruptcy protection, it is not likely that they will face their creditors in court. They may not actually appear before a judge as well. However, they will certainly sit down with a bankruptcy trustee. This post will briefly highlight the trustee’s role in the bankruptcy process and explain some of the questions debtors may be asked during their meeting.

Trustees in Chapter 7 Bankruptcies

A checklist for dealing with overwhelming debt

Debt is stressful, especially when you are behind on payments. Worse yet, debt collectors may start sending relentless letters and calls. It can feel like giving up is the best answer. There are strategies to pay down overwhelming debt even when it appears impossible. Consider the following checklist for getting out of debt quicker.

Will you lose your house in chapter 7 bankruptcy?

Many people struggle for years with high debt and aggressive creditors instead of pursuing bankruptcy. They may worry that declaring bankruptcy will ruin their credit, take away their car and maybe even their house. Losing a house is a particularly strong pain point. Homes are central to our lives – they carry special memories, provide shelter and represent a family’s unique personality.

The prospect of losing a home may keep some individuals from declaring bankruptcy out of fear. The idea of bankruptcy may be intimidating, but in reality it is a tool that helps people get out of debt and start over. What actually happens to a person’s house when they file for chapter 7 bankruptcy?

But they can’t do that: What can—and can’t--debt collectors do?

Years ago, in the 1970s, our federal government codified the Fair Debt Collection Practices Act (FDCPA). The idea was to help consumers who had outstanding bills avoid harassing or bullying tactics from collection agencies trying to obtain payment.

Where before, virtually no rules were in place for debt collection shenanigans, now there would be parameters—and punishment—for collection agencies that went too far. Calling someone at work was taboo, calling early in the morning or late at night was verboten, threatening legal action they had no intention of taking was forbidden.

Fair debt collection: Creditor Harassment and Bankruptcy

For years consumers have enjoyed the protection of the Fair Debt Collection Practices Act. Codified in 1977, the Act outlines very specific rules debt collectors can use—and those they cannot—in order to collect money owed to the original creditor.

For example, say you owe Sears $700.00 for that emergency refrigerator purchase. But two months into payments, you lose your job. Before you know it, within months, you have completely defaulted. Sears calls you—but to no avail, because, as they say, you can’t get blood from a stone and you simply do not have the money to pay them.

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