… court ruled that the debtor’s student loan was nondischargeable and that the debtor’s mental illness was not enough to qualify as a hardship.

The details of the bankruptcy case:

The Chapter 7 bankruptcy debtor is a 35 year old, married man with two children, who was diagnosed with bipolar disorder.  His wife was employed as a bank office manager earning $42,000 per year.  The debtor was not employed and had not worked since 2006.  In 2005 the debtor was diagnosed with …

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… of what many in his situation are feeling.  Debt can become so stressful that it can often cause mental illness that drives the debtor to do things he/she might not have done otherwise.  While I don’t know the details of Rodriguez’s situation, it sounds like his ordeal began at least two years ago.  While filing bankruptcy was a good move, his bankruptcy filing probably should have come earlier–before the stress sent him over the edge. For any debtor struggling under the weight of …

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… Bail Out bill passed last week, is a provision known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requiring employers to equally cover mental health costs in their health coverage plans. The provision states that financial requirements and treatment limitations for mental health care, if covered, cannot be any more restrictive than those put on the group plan’s other medical and surgical benefits. What that could mean is that employees …

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… about you.”  Keep track of all of your assets before and after bankruptcy, take care of your mental health and take responsibility for your finances by making the decisions because in the end only you will have to live with those decisions.

… on the loan application or promissory note; or

The student loan debtor had a physical, mental, or legal status or condition at the time of enrollment that would legally bar employment in their field of study.

The student loan debtor is the victim of identity theft.

A student loan debtor may also receive a discharge of their student loan if they were unable to complete their program of study because the school closed.  Once a debtor receives a discharge through …

… loan because despite their disability they were able to work some type of job. Also, so mental disabilities may not count as a disability that will impact your ability to repay your student loan.

You are a veteran. If you are a veteran, you may be eligible to totally and permanently discharge your student loan if you can prove that you are unemployable because of a service-connected condition.  For example, if you became disabled because of combat …

… with the plaintiff since childhood. The plaintiff was 48 years old, had an IQ of 56 and the mental capacity of a six year old according to a clinical psychologist.  Because of this, the plaintiff was not able to perceive deception which created an environment where the debtor could unjustly enrich herself at his expense.   When the plaintiff’s mother was no longer able to care for the plaintiff, the debtor became his Social Security representative payee. For approximately six …

… circumstance.”

The bankruptcy court said:

“Incapacity” means impaired by reason of mental illness or mental deficiency so that the debtor is incapable of realizing and making rational decisions regarding his financial responsibilities. “Disability” means being physically impaired so as to be unable to participate in a financial management class. “In straightforward terms, a debtor’s incarceration, standing on its own, cannot be equated with a ‘disability’ for …

… real (and additional) cost associated with it: extra childcare payments, commuting costs, costs in mental well-being and often medical costs due to extra stress put on the body.

Working “more” in order to avoid bankruptcy does not always make sense economically after you deduct the additional costs listed above (and that’s not including income taxes paid on the additional income).

Working “more” in an effort to avoid bankruptcy is not always sustainable.  If you’re just …

… and homeowners living in homes with upside down mortgages, you can only imagine the amount of mental stress homeowners are experiencing. Many homeowners facing foreclosure and other financial issues do their best to repay their debts even if it jeopardizes their well being. Terminating health insurance, buying less food or not buying prescription medication is not a long-term viable strategy for getting out of debt; but it is a recipe for disaster.  Debtors who have found that they are …

… – These borrowers burned through retirement savings, destroyed their credit ratings and suffered mental and financial hardship.

This is a travesty. It demonstrates the lack of leverage and power homeowners have with mortgage lenders when faced with foreclosure. It is also a direct result of our government choosing vague “shame” programs instead of concrete bankruptcy laws to combat foreclosure.  You cannot fight powerful mortgage lenders and their servicers with shame, because they …

… could possibly hurt the debtor’s future employment prospects due to the stigma still attached to mental illness and agreed to conceal her identity.

Many debtors are afraid to file bankruptcy because they are embarrassed by the information that will be revealed and/or fear that the information revealed during bankruptcy could affect their future employment prospects or their social standing in society. Fortunately, the bankruptcy court has put into place safeguards will take into …