Yes, you have to repay your student loans. Unfortunately, at this point, bankruptcy doesn’t offer a good solution for student loans for the overwhelming majority of people. And so one question I always get is, well, I have some private student loans and I have student loans from a private bank and from the federal government, can I get the discharge to apply to the private student loans? And the case law as it stands today in the Ninth Circuit, which is where we are in Arizona, is, yes, you have to pay back your private student loans. It’s actually even worse than that. There’s case law in the Ninth Circuit and in other circuits that says if you go, let’s say, to a trade school, there’s cases out there where people will go to a beauty school and they actually didn’t get a loan, they signed a contract and the contract said, well, you can come to school here for free and the fair market value of the tuition here is, let’s say, $6,000, and when you successfully complete the school, we give you a certificate, then you owe us $6,000, which is the value of the education. And so it’s not really a loan, per se. There wasn’t any money that exchanged hands. And so I’ve seen situations like that. And even that is not dischargeable in bankruptcy.
Look, student loan debt is a very big problem in this country right now. And, again, it’s August, the shooting of this video, August, 2012, there’s more student loan debt now in this country than there is credit card debt. And there are organizations out there like the National Association of Consumer Bankruptcy Attorneys that is lobbying Congress to try and get some legislation passed to give some relief in bankruptcy regarding student loans; it’s not here yet, we hope that it’s coming. It’s not to say that it’s impossible to get student loans discharged in bankruptcy, it’s just that the standard of proof is so high that it only applies to a very limited number of people.
I tell my clients for the most part if you can hold any kind of job at all, not that you actually have the job, but if you can hold any kind of job at all and pay the smallest amount of money to go to your student loan creditors, than more likely than not, most judges are going to say that the student loan debt is nondischargeable and that it has to be paid, bankruptcy or not.