A story last month in the Wall Street Journal detailed the financial burdens facing Kristina Pietras, a former student at the University of Toledo, who owes $132,000 in student loan debt.
According to the Journal, Pietras’ situation is so dire that family members have been harassed and taken to court by lenders. Pietras’ parents co-signed on her loans and even after filing for bankruptcy, they have not been able to discharge the debt.
A bankruptcy judge in Ohio pointed out that the family pays $150 a month for cable. “The court is, thus, confronted with this dichotomy: the debtors, when incurring obligations on behalf of their daughter, find the means to pay for one obligation but not the other,” the judge wrote in his order denying the Pietrases’ bid to cancel the debt, according to the Journal.
Pietras works at Arby’s. In many ways, her case shows the growing problem that is student loan debt faced by former students and graduates in this country. The private student loan industry is now a $20 billion industry, when just a decade ago it was only $5 billion.
A recent Time Magazine article discussed the student loan crisis, pointing out that that in 2009, 10 percent of all students who took out private loans and earned a Bachelor’s degree owed more than 25 percent of their monthly income to student loan payments.
Student loans are often nondischargeable in Chapter 7 or Chapter 13 bankruptcy, although we would fully support any changes to laws making it easier for consumers with loans to discharge them.
It should be noted that many student loan borrowers face issues with credit card debt, which is dischargeable. This shows that bankruptcy could still be a viable option for people underwater financially.
Talk to our attorney about what bankruptcy can do for you. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.