Felicia the Hospice Worker
Welcome to Case Chronicles, where we tell the stories of people who received student loan debt relief via adversary proceedings.
All information in Case Chronicles is from the public record, but we have changed any names to provide some privacy.
In 2007, Felicia was living a stable, if modest, life in Tulsa, Oklahoma. She had a steady job at a local hospice center making $26,000 a year and collected a few hundred dollars a month from Social Security. She had bought a house in 2005, where she was living alone, and she drove a 2002 Volkswagen Beetle.
Unfortunately, Felicia’s finances were upended when she lost her job in May 2007. The job market wasn’t welcoming for older workers like her, and her search for full-time — or even part-time — work was fruitless.
She was able to collect unemployment, but at the reduced income, she had trouble making ends meet. Even worse, she knew the unemployment checks wouldn’t last long. Her mortgage, auto loan, and student loan debt — $38,000 remaining for a degree earned five years before — became too much to handle. With student loan forgiveness options not available - Felicia had to look to bankruptcy for a way to discharge her student loans.
Felicia filed for Chapter 7 bankruptcy in August 2007.
Her bankruptcy attorney knew the student loan debt was dischargeable, but only if repayment would constitute an undue hardship for Felicia. She just had to file an adversary proceeding against the lender, Citibank, and show that Felicia passed the Brunner test, which asks:
- Can you pay your bills right now and still maintain a minimal standard of living?
- In the foreseeable future, will you earn enough money to make payments on your loans?
- Have you made good faith efforts to pay your loans before bankruptcy?
In November, Felicia’s attorney filed the adversary proceeding. She argued that, because Felicia was having trouble finding work due to her age, she was likely to continue having difficulty finding a job at her previous salary.
In April 2008, the judge ruled in Felicia’s favor. She would pay just $3,000 of her original $38,000 in student loan debt. She would make payments in installments of $50 per month for 60 months with no interest. Over 90% of her student loan debt was wiped away forever.
There are countless people out there like Felicia who deserve student loan discharge. At Lexria, we’re helping those people get relief, during or after their bankruptcy.
Have you been through bankruptcy? Are you still struggling to make ends meet because of your student loans? Take our initial assessment to see if you’re a fit. It’s quick, it’s free, and there’s no obligation to continue.
*Name has been changed to protect privacy.