Related Bankruptcy Articles
President Trump Is Considering Making It Easier to Discharge Student Loan Debt in Bankruptcy
President Trump is considering making it easier to discharge student loan debt in bankruptcy, reported the Wall Street Journal on 2/21/18, Section A.p.2
Almost all student loans in the US are either from the US Department of Education (a federal executive agency) direct, or are insured by the US Government. President Trump could probably not change the standard for discharging student loans, by executive order, though he could tell the US Department of Education to be more liberal about allowing student loan debt to be discharged in bankruptcy. To get a nationwide enforceable change in the standard for discharging student loan debt in bankruptcy, President Trump would need to convince Congress to pass legislation to change 11 USC 523(a)(8) of the Bankruptcy Code, which sets the standard for when student loan debt can be discharged in bankruptcy. For many years, 11 USC 523(a)(8) has only allowed student loan debt to be discharged in bankruptcy if the debtor proves it would be an "undue hardship" on the debtor, or the debtor's dependents, if the debtor has to pay back the debtor's student loans, over the debtor's whole working life. With this standard, young persons filing bankruptcy cannot meet the standard, unless they are permanently disabled.
IRS Steps up Passport Withholding
The IRS has begun certifying federal tax debts of more than $50,000 to the State Department, which poses problems for travelers. Why? Because the State Department generally won't issue passports to taxpayers who have been flagged for delinquencies.
Internal Revenue Code 7345 allows this. Once the State Department is notified, it can either deny a passport application and/or revoke a current passport. If it happens while a taxpayer is out of the country, the State Department may issue what's called a limited validity passport that only allows a taxpayer's direct return to the U.S. However, the State Department will hold a passport application for 90 days before denying it.
Consumer Spending Rises in December as Incomes Improve
Soaring stock prices and improving job prospects have set Americans off on a spending splurge that is cutting into how much they sock away for retirement and rainy days, the Wall Street Journal reported. U.S. household net worth has risen from $56 trillion in 2008 to $97 trillion in the third quarter of 2017. The U.S. household saving rate dropped in December to its lowest level since the height of the 2000s housing boom. The saving rate was 2.4 percent of disposable household income in December, the Commerce Department said on Monday. That was the lowest rate since September 2005, not long after then-Federal Reserve Chairman Alan Greenspan began warning about froth in housing markets. The saving rate had risen to 6.6 percent when the recession ended in June 2009. [as reported in American Bankruptcy Institute e-newsletter of 2/1/18]
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