Creditors of Student Loans Go after Co-Signers

Katy Stech of the Wall Street Journal recently wrote an editorial about Kristina Pietras, a student who became burdened with student loan debt before dropping out of the University of Toledo. Various lenders lent Pietras $132,000 in loans. Pietras’ parents had co-signed her loans.

Lenders took Pietras and her co-signers to court, where they argued that she was paying $150  month for a cable television package and recently had new carpet installed instead of paying back the loans. Her parents were paying her cell phone bill at $70 a month while she worked at an Arby’s restaurant.

“The court is, thus, confronted with this dichotomy: the debtors, when incurring obligations on behalf of their daughter, find the means to pay for one obligation but not the other,” wrote Judge Richard Speer of the U.S. Bankruptcy Court in Toledo.

As more and more students find themselves unable to repay loans, the creditors are going after the co-signers. More than 90 percent of student loans require a co-signer. More and more co-signers may find themselves in bankruptcy court if this trend continues. Contact our firm for a free consultation.

Benjamin Brand Services- Chicago bankruptcy lawyers .

Illinois Bankruptcy Court Facing Eviction from Will County Courts

The Northern District of Illinois Bankruptcy Court is looking at possible eviction from their courtrooms in Joliet. Will County has seen an increase in court cases because of population growth, and now needs more space.

An extension on an existing lease is due to expire soon, and Will County Judge Gerald Kinney said he needs the courtroom to accommodate his own crowded court system.

Kenneth Gardner, clerk of the bankruptcy court, said that the courtroom has been in its current location since the 1990s, before Will County bought the building. He said 7,548 cases were filed there in 2010, originating in Grundy, Kendall, LaSalle, and Will counties. It was the court’s busiest year since 2005.

Kinney told county board members the bankruptcy court cases could wind up in Chicago, but Gardner said it would seek a new courtroom in the area to keep them local. “Our intent, for sure, is to stay there,” Gardner said.

Kinney said Will County’s main courthouse is crowded and fails to meet security standards set by the Illinois Supreme Court. The county is expecting to receive five new judges in 2012 because of its population growth.

Kinney said he’d work with the bankruptcy court to give them time to find a new location.

If you are considering filing for bankruptcy and have questions about the process, contact a Chicago bankruptcy attorney for more information.

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