There is currently a bill before Congress, the goal of which is to allow the discharge of private student loans in chapters 7, 11, & 13 of the bankruptcy code. This bill was first introduced in 2010 and again in 2011. The Fairness for Struggling Students Act of 2013 was reintroduced Jan. 23, by Senantor Dick Durbin and five other Senators, aiming to reverse legislation enacted in 2005 that allows private student loans to get the same treatment in bankruptcy as federal loans.

A study was recently published where a group of radiologists were asked to review a series of x-ray films. These were trained professionals who were skilled at spotting abnormalities. Each of the subjects was shown at least one image that contained a picture of a gorilla. Eighty three percent of the subjects did not spot the gorilla. This is reminiscent of another study where a group of students were shown a film of a basketball game. During the game a man in a gorilla suit ran across the court. Again, the great majority of the viewers did not “see” the gorilla.

GOOD NEWS seems like a rare thing these days, but if you have been contemplating a short sale of your home or trying for a deed in lieu of foreclosure with the lender there is a slim ray of hope. As of last night, the United States Senate and House have passed the 2013 American Tax Payer Relief Act. In section 202, the bill calls for the Mortgage Debt Relief Act to be extended until 1/1/2014. This means if you avoid owing a deficiency to your lender by means of a short sale or a deed in lieu you will not be socked with a big income tax bill for the forgiven debt.

Safe? What could happen if I forget to list an asset or skip one of my creditors? In short your bankruptcy could take more time, both yours and your attorneys and it could cost more- a lot more. A recent article on this topic, published on the internet by the Bankruptcy Law Network, and written by Susanne Robicsek, a North Carolina bankrupty attorney, can be found at http://www.bankruptcylawnetwork.com/bankruptcy-and-the-unknown-asset/ . Susan points out that you can file bankruptcy without all of your information, but is firm that doing so in not a good idea.

While recent surveys show that the rate of bankruptcy in the United States has risen during the recent recession anyone who looks closely will also see that the chief reasons for that increase are only peripherally related to the recession. The biggest cause, regardless of whose surveys or studies you choose to believe is medical debt. Surveys show that between 50 and 70 percent of all Chapter 7 bankruptcies are to some extent caused by exploding medical costs. The next biggest reason is credit card debt.

Where can I find the money to pay for a bankruptcy? While this is often not the first question a new client asks it is often the most important one. It doesn’t take long for the debtor to discover that Chapter 7 attorneys must ALWAYS be paid up front. Because they are cruel? No, because when a bankruptcy is filed the attorney becomes a creditor. So, regardless of the bottom line the debtor can find himself on the outside looking in if he can’t come up with all the costs and fees.

3/26/12

Many debtors worry about the effect of filing bankruptcty, on their credit, their reputation and often with the possible effects it may have on their employment. The law does not allow such discrimination. Section 525 of the Bankruptcy code provides that:

§ 525. Protection against discriminatory treatment