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On Nov  17, 2022 the Biden Administration announced a new path to Discharging Student Loan Debt in Bankruptcy (litigation in Bankruptcy Court).  The New York Times has a story on this topic that can be found at https://www.nytimes.com/2022/11/17/your-money/bankruptcy-student-loans.htmlThe new path “outlines a better, fairer, more transparent process for student loan borrowers in bankruptcy,” according to Associate Attorney General Vanita Gupta. Once enacted, the guidance will make it easier for attorneys at the Justice Department and Education Department to identify cases in which Federal student loans may be discharged.The New York Times article states that under the new guidelines, debtors will complete an "attestation form" that the government will use to determine whether a discharge should be recommended for Federal Student Loans. A Debtor will have to demonstrate hardship, such as having expenses that exceed their income or having a mental or physical disability that prevents them from repaying the loan. In such cases, the government lawyers will recommend a full or partial discharge of the debtor's student loans.Student loans can only be discharged under the current system by filing for personal bankruptcy and then filing a lawsuit or adversary proceeding.Adversary proceedings are expensive and difficult to pursue, and according to experts less than 1 percent of personal bankruptcy filers try to discharge their student loans.The attestation form will hopefully make the adversary proceeding simpler and easier, so more debtors will be able to discharge their loans. Shenwick & Associates will close following these developments, and anyone with questions should contact Jim Shenwick, Esq.  [email protected]  212-541-6224

Despite what logic might have told us, the two years following the COVID-19 pandemic had record-low numbers of personal bankruptcy filings. As people tightened their purse strings and relied on government and charity programs to make it through difficult times, fewer families needed the help of the bankruptcy court. However, the trend has turned around+ Click Here For Read More
The post Why is Personal Bankruptcy on the Rise After the Pandemic? appeared first on David M. Siegel.

 The moratorium on federal student loan payments has been extended again by President Biden to June 30, 2023. An article on this topic can be found on cnet at https://www.cnet.com/personal-finance/loans/student-loan-pause-extended-again-heres-when-youll-have-to-start-paying/
Jim Shenwick, Esq   212 541 6224   [email protected]

 Governor Hochshul signed a bill on Wednesday November 23, 2022, prohibiting healthcare providers from collecting wages or liening patients' homes to satisfy medical debts. An article about the bill can be found at https://www.mytwintiers.com/news-cat/state-news/hochul-signs-bill-to-protect-new-yorkers-with-medical-debt/
If a creditor wishes to collect a debt in New York, they must sue the debtor, obtain a judgment, and then enforce the judgment. Under New York law a  judgment is good for 20 years. Creditors who attempt to enforce judgments generally do three things: 1.  Lien and levy  on a debtors checking account or brokerage account, 2. Docketing the judgment against the debtor’s house and foreclosing on the judgment and 3. Wage garnishment, a legal procedure in which a person's earnings (10%) are required by court order to be withheld by an employer, and paid to a creditor in satisfaction  of a debt.With the new law signed by the governor, medical creditors will no longer be able to garnish wages or docket judgments against a debtor's house in order to collect on those judgments. If you have any questions about the enforcement of judgments, please contact Jim Shenwick, Esq at [email protected] or  at 212-541-6224.