Get Out of Debt Guy - Steve Rhode

Mother Wins Bankruptcy Discharge of National Collegiate Student Loan Trust Student Loans

The decision to file bankruptcy should be a celebration.

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A Los Angeles bankruptcy judge ordered student loans to be discharged on July 6, 2015 because they did not qualify as education loans under 11 U.S.C. 523(a)(8). Judge Neiter, United States Bankruptcy Judge in the Los Angeles Division of the Central District of California, presided over the adversary proceeding case no. 2:14-ap-01722-RN, Schwartz v. National Collegiate Student Loan Trust and granted Summary Judgment yesterday in favor of Ms. Schwartz, discharging nearly $63,500.00 in private student loans.

According to court papers and the Judge’s tentative ruling, Ms. Schwartz’s son had attempted suicide and was placed in a psychiatric hospital for three days. During his stay, he was assessed and determined he needed residential treatment. Upon admission to YouthCare treatment facility in Utah, her son was given an intake assessment and psychiatric evaluation. To pay for his treatment, Ms. Schwartz executed a loan agreement (“Private Student Loan”) through Bank of America, N.A., that was later sold to National Collegiate Student Loan Trust.

The Court stated in its ruling, “Defendant does not dispute that the loan at issue is not a qualified education loan under 11 U.S.C. §523(a)(8)(B). The court found in favor of Ms. Schwartz and ordered the debt discharged. The Schwartz family is grateful that the death of their son to a drug overdose is honored by the elimination of this lingering debt burden.”

The Law Office of Christine A. Kingston, author and nationally known student loan lawyer, handled the civil and bankruptcy matters. Attorney Kingston moved the civil collections lawsuit into bankruptcy court, reopening Ms. Schwartz’s bankruptcy case so that court could determine the dischargeability issue. “Each case is unique in my approach,” says attorney Kingston. “I look at the entire picture of my client’s lives and find a solution that gets them out of debt as quickly and economically as possible.” Attorney Kingston also advises those struggling with their student loan debts to seek the advice of an attorney because there are more options, including a bankruptcy discharge under some circumstances.

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