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  • Robert Weed

Why Joe Biden Should Change Government Policy on Student Loans in Bankruptcy--And How

Let me tell you about Sandy Chamberlain

Sandy, not her real name, is a divorced mom with three kids, 17, 8 and 7. Her annual is $68,952 and she gets $900 a month in child support. (That will drop when the teen reaches her 18th birthday.) That seems like a lot of money but it doesn’t go far around here.

As a family of 4, she has automatic income eligibility to file Chapter 7 if she’s making less than $121,793. She’s under that eligibility cutoff by $42,000 a year! And her student loans? Sandy has $70,757 in student loans. Her payment, if ever hopes to pay it off, is supposed to be be $554.00 a month. Even though she’s $3500 a month below the average for a family of four in Virginia, and it’s considered no “undue hardship” to make her pay $554 a month on the student loan.

Bankruptcy law won't help her, now. Government lawyers, the U.S. Department of Justice, go into bankruptcy court and fight against consumers trying to clear theri student loan debts in bankruptcy. We can’t win when the government lawyers come in to fight against us.

Biden can call off those government lawyers. If the consumer, without government opposition, can persuade the judge–and that may still be tough–the consumer should win. And if the consumer wins at trial, the government should not appeal.

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