A Texas bankruptcy judge has denied a request by student loan giant, Navient, to dismiss a class-action lawsuit accusing the firm of illegally collecting on loans that were discharged in bankruptcy. The decision means the case can move forward and allow the opportunity for an appellate court to consider whether loans historically viewed as exempt from bankruptcy can be discharged.
The ruling is an important one, as the Department of Education is currently reviewing the high standard student loan borrowers must meet to have their student loan debt discharged in bankruptcy. The case in question focuses on a specific type of private loan debt (i.e. – money loaned to borrowers to pay for unaccredited programs, such as bar exam study courses and K-12 educational expenses). However, if the appellate court rules in favor of the plaintiffs, it could mean that borrowers with similar student loans from other companies could qualify for the same relief.
Before this ruling, bankruptcy courts have determined that the types of loans in question in this case cannot be discharged because they were received as an “educational benefit.” Recently however, lawyers and judges have started to challenge whether loans to help borrowers study for the bar exam and other similar debts truly fit into the category.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
