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Serving Pikes Peak Community College students |
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By Terry Biggs
The cost of living and college tuition is rising every year. After a student finishes college, most are in debt, and PPCC students are no exception. For instance, PPCC students spent $10 million in loans in 2004-05.
Jim Lambros, who attended Boston College, was in debt $12,000 just after two years.
Many students, in the past, filed bankruptcy when they couldn’t pay off this debt. On April 14, a new bill was passed that will make it far more difficult for individuals to file for bankruptcy. The new bill took effect last month. According to lawyer.com, it will be more expensive for the debtor who will have more obstacles to overcome before debts are erased from his life.
“The debtor has to pass a means test,” said Sean Cloyes, a Colorado Springs lawyer who works for Kenton D. Kinniard and Associates, P.C. He has been working with bankruptcy cases for four years.
A means test determines whether a debtor could file for bankruptcy. When applying, the average income during the past six month is used; present income has no affect on the decision.
When a debtor applies for bankruptcy, there are two types of bankruptcy. The first type is called Chapter seven when a debtor tries to discharge all debts. Under Chapter seven, there are few things that cannot be discharged, such as privately funded student loans, and all debts arising from divorce and back taxes.
The second type is called Chapter 13; here a debtor basically pays about half his debts. “The court will order a monthly payment over five to eight years,” said Cloves.
With these new laws, creditors can call and harass a debtor more without fearing the words,” I filed for bankruptcy.” If the debt is not paid in a timely matter or some arrangement is not made, garnishment of wages will be more frequent.
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