//Disabled Middle Aged Woman Living Well Below Poverty Line is Ordered by Judge to Pay $37,400 in Student Loans

Disabled Middle Aged Woman Living Well Below Poverty Line is Ordered by Judge to Pay $37,400 in Student Loans

by Michael Krieger 
6-22-2015
Poverty demoralizes. A man in debt is so far a slave; and Wall-street thinks it easy for a millionaire to be a man of his word, a man of honor, but, that, in failing circumstances, no man can be relied on to keep his integrity.
– Ralph Waldo Emerson, Wealth
Most of you will be aware that it’s almost impossible to discharge of student loan debt once you have it. It stays with you for the rest of your life almost no matter what, even if you file for personal bankruptcy.

Why does this matter? Well, we’ve all seen charts depicting the disturbing surge in student loans outstanding over the past decade or so. Charts such as these:
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So what do you produce when you encourage an explosion of debt that can never be repaid and can never be defaulted on? Debt serfs. Millions upon millions of hopeless debt serfs.

For those of you who still don’t realize how difficult it is to get rid of this financial millstone, I bring you the story of 45-year-old Monica Stitt. Here’s the title and tagline to the Bloomberg article:
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Now here are some excerpts from the piece:
Monica Stitt, a 45-year-old woman, is unemployed, disabled, and living far below the poverty line. Still, a federal district judge decided in June that she could not cancel more than $37,000 in student debt in bankruptcy, because she hadn’t made a good-faith attempt at repaying the loans. 

Her entire income—about $10,000 per year, according to the judge—consisted of Social Security disability benefits and public assistance. She has been unemployed since 2008.

Stitt had borrowed $13,250, which had increased with interest to $37,400 by the time she filed for bankruptcy. After the bankruptcy judge ruled she couldn’t shake the debt, the woman appealed to the U.S. District Court in Maryland without a lawyer, where a District judge upheld the bankruptcy court’s ruling on June 9. 

The debtor didn’t meet the “undue hardship” test required by the bankruptcy code, U.S. District Judge Peter J. Messitte said in his opinion. Unlike credit card debt, student loans can almost never be discharged in bankruptcy. The only way people who have filed for bankruptcy can get rid of the debt is by proving that repaying them would impose “undue hardship” on their lives.
That standard is not defined in the law, so it has been left to the courts to decide exactly how bad someone’s circumstances need to be to qualify for relief. 
If this woman doesn’t meet the undue hardship standard, then who will?
In order to understand how public policy works in America today, simply compare Monica Stitt’s situation to that of the giant TBTF Wall Street banks. After the rich and powerful manipulated and destroyed the global economy, trillions were spent and printed without any hesitation to save them, but when a broke, disabled, middle aged woman can’t handle her student loan debt then “that’s just capitalism.”
Socialism for the oligarchs, free market forces for the serfs. Get the joke yet?
In Liberty,
Michael Krieger 
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