The vast majority of student loans are not dischargeable in bankruptcy. This also generally applies to non-student debtors who are co-signers on the student loans (see Cockels v. Mae, 414 B.R. 149, 153-155 (E.D.Mich. 2009)). Typically you would have to show that the loans not being discharged would “impose an undue hardship on you and your dependents.” If this is determination is to be made, it must be done in a separate lawsuit inside the bankruptcy called an adversary proceeding.

Most courts, including those in Michigan, have adopted the so-called Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987)).

As it has been applied, this is a difficult test to meet. Under the right circumstances, however, it can make sense to incur the additional costs to bring this adversary proceeding, because if you are successful, your student loans will be completely canceled.

I get  the question quite a bit about whether it is harder to file for bankruptcy than it used to be.  The answer is “yes and no.”

In 2005, Congress passed a law that was largely written for them by the credit card companies.  As you might guess, it was not friendly to consumers.  It did push  some people who previously would have been able to file for a Chapter 7 file under Chapter 13 instead.  For those of you who do not know, a Chapter 13 requires monthly payments of your disposable income (as defined by the Bankruptcy Court) to a trustee for three to five years.  The Chapter 13 Trustee then distributes that to creditors.  At the end of the Chapter 13 Plan, whether you have paid the creditors in full, or only 10 cents on the dollar, you then get your discharge.

Even though a Chapter 13 is not the end of the world, if possible, it is preferable to most people to file a Chapter 7.  In a Chapter 7 you get your discharge in four or five months, and generally do not lose any property or have to pay anything to the trustee.  Whether you qualify for a Chapter 7 is principally determined by a “means test.”

The “means test” compares your income to the median income for a family of your size in your state. This is determined by your  average income over the last six months before you file.  If your income is less than or equal to the median, you can file for Chapter 7. If it is more than the median, there are some deductions that can be taken to determine whether you still qualify for Chapter 7.

My experience is that about 80 percent of the people who filed for Chapter 7 before the change in the law in 2005 still qualify for Chapter 7.  Therefore, even though Congress put more hurdles in place, and made it more expensive and time-consuming, the notion that it is “harder to file for bankruptcy” should not discourage you from exploring this options if your circumstances justify it.

I have developed a practical approach, which always keeps my clients’ needs as paramount in my thinking.

As an experienced solo practitioner, I am not constrained by the “system” of a large practice, or compelled to be concerned about the impact of my actions on “the firm.” I am the firm. And my firm is entirely dedicated to the needs of my clients.

Timothy L. Taylor
Attorney and Counselor at Law
990 Monroe, N.W.
Grand Rapids, MI 49503
(616) 233-1300 (ph.)
(616) 459-8614 (fax)
timtaylorlaw@sbcglobal.net

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Welcome to my Website.

I have been in the private practice of law for 25 years. I am a Hope College graduate, and graduated from law school (University of the Pacific Law School), with distinction. After graduation from law school I served a one-year judicial clerkship. Since then, I have been in private practice. During that time, I have practiced nearly every type of law imaginable. For the last 15 years, my focus has been on civil litigation, although I still occasionally get involved in other matters, as well.

In addition to having my solo practice, I am affiliated in some matters with the prominent litigation firm of Bos & Glazier.  This relationship provides added strength to my practice both in terms of skill and resources.

My office is conveniently located in the historic Berkey & Gay Building on the north edge of downtown Grand Rapids. There is free parking just a few steps away.

The content of the website reflects the types of cases that I get involved in most frequently. Should you have any questions about any legal situation, please contact me by telephone, fax, correspondence, or e-mail. Even if it is not they type of case that I might typically handle, I would be happy to refer you to a competent lawyer who would be able to help you in such a case.

Timothy L. Taylor
Attorney and Counselor at Law
990 Monroe, N.W.
Grand Rapids, MI 49503
(616) 233-1300 (ph.)
(616) 459-8614 (fax)
timtaylorlaw@sbcglobal.net

This website does not create an attorney-client relationship, and the materials on this website are not legal advice. Any given situation is dependent upon the specific facts and circumstances, and these cannot be fully discerned without meeting to comprehensively discuss the situation. I provide this website for general informational purposes only, and so that you can become acquainted with my law practice. If you do want legal advice based upon your particular circumstances, please contact me.

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