There is a great deal of confusion regarding the dischargeability of private student loan debts in bankruptcy. This confusion arises largely because the treatment of private student loans has changed over the course of the last decade.

Prior to October 17, 2005, if the program under which a student loan was issued, insured, administered was a for-profit, private (non-governmental) entity, the loan may have been discharged in bankruptcy. However, if the program itself, such as GSL, LAL, etc. received non-profit funding by participation of nonprofit entities, the loan was not dischargeable in bankruptcy.

For bankruptcy cases filed after October 17, 2005, the only way a student loan can be discharged is if the debtor is able to show “undue hardship” as that term is interpreted by the courts in whatever district the case is filed in. It is a an extremly difficult legal standard to meet, and the vast majority of student loan debts are simply not dischargeable.

In both Oregon and Washington, there are normally penalties for filing subsequent bankruptcy cases within one year after a prior case has been dismissed.

The main penalty is that the automatic stay, which bars creditors from initiating or continuing any action against the debtor, ends exactly 30 days after the petition is filed. In the case of a bankruptcy filed after multiple dismissals, the automatic stay never even goes into effect. The bankruptcy stay termination penalty does not, however, apply to cases refiled after a dismissal refiled after a dismissal for failure to pass the means test.

Parking is bountiful and free. Meetings of the Creditors are held in the conference room of the facility. Hotel staff will be more than happy to point you in the right direction.

In both Oregon and Washington, creditors can typically garnish a bank account to collect a debt only after obtaining a judgment. Once a creditor does obtain a judgment, it may file a non-wage garnishment affidavit upon any of your banks. After the bank is served, the bank may be obligated to pay the judgment creditor any money that you have on deposit up to the amount needed to satisfy the judgment.

A bank garnishment is far worse that a payroll garnishment in the sense that the creditor is not limited to a percentage of available funds. Unfortunately, many debtors in both Oregon and Washington only learn this through bitter experience.

If you do owe money on a judgment, depositing money into an account is a risky proposition. Until you do file bankruptcy, you may want to seriously consider using a check cashing service until your case is filed. Given that there are severe limitations in states like Oregon on the amount of money that can be shown in a bank account at the time of filing, relying on cash and money orders to pay your bills in the month or so before your case is filed may aid you in getting your bankruptcy filed as quickly as possible.

Gunowners in the state of Washington may soon be able to breathe a heavy sigh of relief as the House of Representatives has just passed H.R. 5827. This legislation will allow gunowners in states which permit the federal exemptions (Washington but not Oregon) to exempt up to $3,000.00 worth of firearms. A comparable version is pending in the Senate now. Provided that both the Senate passes this legislation and the president ultimately signs it into law, gun toting Washington residents from Seattle to Vancouver will be able to file bankruptcy and not lose any part of their arsenals.

In both Oregon and Washington, you can get rid of any tax debt in a chapter 7 bankruptcy provided that all of the following conditions are fulfilled:

1. The tax debt is not owed due to wilfull evasion or fraud. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, you will not be able to discharge the debt in bankruptcy;
2. The taxes are actually income taxes. Fraud penalties and payroll taxes cannot be discharged in bankruptcy.
3. The tax return must have been originally due at least three years prior to your Chapter 7 bankruptcy filing
4. You actually filed a tax return for the debt you want to get rid of at least two years before filing for bankruptcy.
5. The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition.

Warning: Even If your taxes can be eliminate in a Chapter 7 bankruptcy case, bankruptcy will not destroy tax liens. If the IRS recorded a tax lien on your property before you file for bankruptcy, the lien will remain on the property. This means that if you ever want to sell your house, you’ll have to pay off the tax lien in order to do so.

In Portland, at the meeting of creditors, you will first hand over your proof of social security number and your photo identification to the trustee who will briefly swear you in, asking for your name and address for the record. You will then sit down at a table with your attorney seated to your left facing the trustee and his assistant.

The Portland Chapter 13 Bankruptcy Trustee’s assistant will start by asking you a simple series of questions that is asked of everybody. These questions are easy to answer with yes or no. For example, you will be asked if you listed all your creditors in your bankruptcy petition. After the assistant finishes up, the trustee’s attorney may ask some questions, but these are usually directed at your attorney, and cover technical aspects of your Plan. Your attorney will sit with you at the hearing, will answer the technical questions. The hearing usually lasts about six or seven minutes. While Creditors are allowed to attend the meeting and ask relevant questions if they want, they rarely attend.

Very rarely will any bankruptcy filer have to attend any court hearings. Normally, the only personal appearance, you will have to make is attending a “Meeting of Creditors.” The meeting of the creditors is really a short meeting with a bankruptcy trustee and no judge is present.

While the meeting is important, it is somewhat informal: There is no need to dress up for it and the tone is normally more conversational than confrontational. Very rarely will one of your creditors appear and, if a creditor does appear, it will almost always be on its best behavior.

The Bankruptcy Code, at 11 U.S.C. § 525(b) clearly and in no uncertain terms states, “No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt.”

It is simply against federal law for a private employer to either terminate or decline employment solely because of a bankruptcy filing. Oregon and Washington state laws also bar private employers from discriminating against bankruptcy filers.

Once you file for bankruptcy protection, the bankruptcy laws bar creditors from taking any further attempts to collect from you. This means that even if you have been sued, the creditor cannot seek a judgment or make you participate in that lawsuit without getting permission from the bankruptcy court.

If, on the other hand, you wait to file bankruptcy until after a judgment has been entered against you, a judgment lien may automatically attaches to any real estate that you may own in the county in which the judgment was either entered or transcribed. In a very real sense, the judgment converts a once unsecured debt into a secured one.

Much of the time, however, judgment liens can be avoided because they “impair” a debtor’s allowed exemptions. Provided that you do not have any more equity in your house than you can legitimately exempt(roughly $50,000 in Oregon and more than twice that amount in Washington), you can often “avoid” the judgment lien under the Bankruptcy Code. Given that few people in Portland, Vancouver or Salem have more home equity than the their allowable exemption, voiding a judgment lien should not present a great problem. Still it is far simpler, less risky and less expensive to get the case filed prior to the final judgment stage.

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