Student loan debtors are very nervous about their new higher loan payments. If they cannot get “income-based repayment” — for whatever reason– the new payments may be economically back-breaking. I have had borrowers ask me if they could declare bankruptcy. Until a couple of years ago, my answer was that they would probably fail. In many cases, the Government would actually send in its own attorneys right away to challenge you. However, there has been a small improvement.  Courts are now open to consider three situations that could produce a successful student loan bankruptcy. This is called the Brunner test….and …

The issue of student loan forgiveness is really the province of the Democratic Party. An astonishing percentage of Republicans (at least astonishing to me) take the attitude of “You made your bed, now lie in it.” Republicans argue that taxpayers would bear the cost of defaults on federal loans. They also argue that it is unfair to those who have already struggled to repay their loans. The “burden on taxpayers” is their weakest point, given the stupendous deficit spending of both Trump administrations. If $50 billion or even $150 billion of student debt goes unpaid, this is small potatoes in the overall Republican…

This new book looks like a great one ……. Debt’s Grip: Risk and Consumer Bankruptcy by Pamela Foohey, Robert M. Lawless, and Deborah Thorne Debt’s Grip uses eleven years of court records and surveys to describe what it means to live in financial precarity in the United States. Bankruptcy filers describe the privations and struggles they suffered. It documents the increasingly lengthy period of time people sit in the financial “sweatbox” before filing bankruptcy.  Several chapters are built around types of debts– home and car debts, medical debts, and credit card and other unsecured debts. An additional chapter discusses how the bankruptcy system both…

Chris Hedges – a former minister and foreign correspondent — has described himself as a socialist and  anarchist. His interviews and blog posts are always stimulating.  He points out: “Workers who are unable to meet their debts are far more likely to remain submissive and compliant. Debt peonage has always been a form of political control: 1. Native Americans, who  were forced by the U.S. government onto tribal agencies, were required to buy their goods on credit at the agency stores.  2. Coal miners in southern West Virginia and Kentucky were paid in scrip by the coal companies — and kept in perpetual…

Chrystin Ondersma is a law professor at Rutgers Law School, and an internationally recognized expert in bankruptcy and household debt.  Here are some highlights from her latest book,  Dignity Not Debt. “Anyone who has debt and feels ashamed and alone must understand that it’s not their fault—our whole system is designed to force you to rely on debt, even when it’s obvious you won’t be able to repay it.”  .”The most striking thing in  my debt research is the degree to which Black Americans have been excluded from the opportunity to build wealth in this country.   Black households are much less…

Marshall Allen, a ProPublica investigative reporter who fought for the rights of patients facing unfair medical bills, died last May at age 52 from a heart attack. Allen approached his stories with the moral conviction that doctors, hospitals, drugmakers  and insurers could be  more transparent and humane.  He first showed how a hospital system refused to cover the care of an employee’s premature baby, leaving her with a bill for $898,984.57.  Within days of Allen calling the system’s media representative, the hospital promised to cover the bill. “He would be our tour guide to things that were incredibly enraging,” said Tracy…

Coerced debt is typically a form of family exploitation. It commonly begins with using a partner’s credit without their knowledge.    One partner might buy items on Amazon.com using their partner’s credit card information stored in the computer. Or, someone might use a partner’s social security number and other personal information to take out a loan. This easily graduates to the threat of harm to a partner in taking on debt–with the spoken or unspoken threat that if they don’t go along, they’ll be sorry.   Eventually, low-income spouses and girlfriends may feel compelled to take out bail bonds for jailed partners. …

In recent years, there has been a widespread imposition of “stay-or-pay” contracts. These agreements force workers to compensate employers if they leave their job before a set time period. The contracts are called  “TRAPS” –  a Training Repayment Agreement Provision.  Employers could legally require workers to pay “liquidated damages” for on-the-job training or use of equipment.  Some of the TRAPS demanded unspecified damages for the cost of recruiting a replacement or for the “lost profits” from a worker’s departure. The debt could easily amount to over $10,000. Employers could also demand that departing employees pay them for not providing a…

Astra Taylor and Hannah Appel Astra Taylor is a filmmaker, writer, and political organizer. She often appears on Democracy Now and The Laura Flanders Show. Hannah Appel is co-founder of the Debt Collective and a professor of anthropology at UCLA. She is also a director of the Institute on Inequality and Democracy. Their joint article in the recent Non-Profit Quarterly is entitled “They Need Us More Than We Need Them – The Power of Debtor Organizing.” They argue as follows: Starting in the 1970s, the United States moved from a tax-funded welfare state (albeit one that primarily benefited white men…

For an individual or small business, the entire process of bankruptcy can be pretty horrific. You must deal with the shame, the harassing letters and phone calls, and the final court proceedings.   This is clearly not true for certain investors and for large corporations…  1) They can use bankruptcy to escape lawsuits Bankruptcy has become a powerful weapon in the arsenal of corporate defendants. Bankruptcy offers companies facing legal liability an escape hatch that puts them beyond the reach of lawsuits. Bankruptcy can let companies emerge from their own scandalous misconduct unscathed.  Bankruptcy was never intended to protect bad actors…