• College Grads Learning Truth About Student Loans In Bankruptcy

    The standard to get rid of student loan debt in bankruptcy is “just exceptionally high,” Todd Brown told the Buffalo News in an article published on October 8, 2011. “Most other kinds of debt you don’t have to jump through those hoops,” said Brown, an associate professor at the University at Buffalo who practiced bankruptcy law.

    The Buffalo News story is another in the spate of articles about the increase in college graduates filing for bankruptcy. A study released by the Institute for Financial Literacy in September found that from 2006 to 2010, bankruptcy filings increased 21 percent among those holding a bachelor’s degree. Even if “a bachelor’s degree is the new high school degree,” the Buffalo News also noted that those with master’s degrees or higher rose at a similar rate.

    Even before the Financial Literacy study, CBS News reported on July 31, 2011, that bankruptcy is not an option for the more than 500,000 students who have defaulted on their student loans since 2008. The college graduate profiled by CBS is paying $160 per month on her federal loans and $800 per month toward a private loan, even though both loans were for the same amount of $40,000. Lauren Asher with The Institute for College Access and Success told CBS that private student loans are much more like a credit card or sub-prime mortgage as they tend to have variable rates and have no consumer protections. “Some people say it’s like graduating with a mortgage and you don’t have a house,” Asher said.

    Sallie Mae, the nation’s largest provider of educational loans in the United States, notes on their website that several laws were passed in the 1990s that made student loans ineligible for cancellation in bankruptcy. Before you even consider a bankruptcy means test , you should speak with a Chicago bankruptcy attorney to make sure that filing is in your best interest. Our firm strives to help all clients become debt free and credit rich, but recent college graduates should remember that neither Chapter 7 nor Chapter 13 bankruptcy will discharge your student loan debt unless you are physically unable to work. If you have additional questions, contact our office today to set up a free consultation.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • How to Survive Garnishment in Illinois

    The bad news for Illinois residents is that the statute of limitations relating to the underlying debt on which the wage garnishment is based are longer than in most states. However, the good news is that Illinois allows less of your income to be garnished than is permitted under federal law or in most other states.

    If you are facing wage garnishment, you should know that Illinois also exempts more non-wage types of income than many other states. For example:

    • Social Security – These benefits are generally prohibited from garnishment under federal law, except in cases involving child support, alimony, federal taxes or certain other types of debt to the federal government.
    • Pensions or Retirement Plans – Most states protect public employee pensions, but private retirement pension benefits like the money in a 401(k) or IRA are also exempt from garnishment.
    • Public Benefits or Entitlements – Workers’ compensation, unemployment benefits and veteran’s benefits are some of the protected forms of public assistance.
    • Insurance or Annuities – Health or disability benefits and life insurance or annuity proceeds are among insurance benefits that are often exempt.
    • Alimony or Child Support – Exempted up to the level needed for support.

    If everything you own falls under an exemption, then the creditor is not able to take anything. Are these exemptions still not going to be enough to help you with your situation? Perhaps now is the time for you to consider completing a bankruptcy means test . Our Chicago bankruptcy lawyers can determine whether a Chapter 7 or Chapter 13 filing would benefit you more and help end creditor harassment. If you are facing wage garnishment or have questions about filing for  bankruptcy , contact our office today to set up a consultation.

    Benjamin Brand Services – Chicago bankruptcy attorneys