After going through this week’s entries for Comment of the Week, it seems that many of our commenters really want an Above the Law T-shirt. There was some stiff competition (what up, Richard Brosner?), but in the end, we decided to address a topic that’s germane to anyone who has taken out a loan to attend law school.
Over Labor Day weekend, the New York Times had an interesting article about the apparent “ease” with which one can get student loan debt discharged through bankruptcy. And by “ease,” we mean that there’s a whopping 39% chance that you’ll receive a full or partial discharge, but only if you can show that you’re a lost cause to society without any semblance of dignity or hope for the future. Easy, right?
Well, actually, yeah. Because when you’ve got six figures of law school loan debt hanging over your head for a degree that you thought was going to be marketable and you’ve resigned yourself to a job as a sandwich artist at Subway just to make a buck, you’re going to lose hope pretty quickly.
And that’s exactly why our Comment of the Week was just so damn appropriate….
As we mentioned in the Labor Day edition of Morning Docket, there’s some interesting news on the Dewey & LeBoeuf front. The one former Dewey partner being sued by Citibank for allegedly defaulting on a capital loan — energy lawyer Steven Otillar, now a partner in the Houston office of Akin Gump — is opposing Citi’s attempt to collect on the debt, by arguing that he was “fraudulently induced” to borrow the money in question.
How much are we talking about? How does the debt compare to Otillar’s compensation while at Dewey? And what are Otillar’s specific allegations about “fraudulent inducement”?
Ed. note: Due to the Labor Day holiday, we’ll be on a reduced publication schedule today. We’ll be back to normal tomorrow. A restful and happy Labor Day to all!
* The lone ex-Dewey partner who was sued by Citibank for defaulting on his capital loan is fighting back, claiming that he was “fraudulently induced” into signing up for the plan even though the bank knew that the S.S. D&L was sinking. [Reuters]
* If you’re trying to avoid additional questions being raised about your alleged bad behavior, a resignation amid scandal isn’t the way to do it. Suzanne Barr, the ICE official accused of running a federal “frat house,” has quit her job. [New York Daily News]
* A federal judge taught the members of the Louisiana Supreme court that the year 1994 did, in fact, occur before the year 1995. Justice Bernette Johnson will now ascend to the rank of chief justice. [Times-Picayune]
* Because we’re all a little hopeless these days: given the bleak realities of our economic situation, perhaps it’s finally time to change the standard for a discharge of student loan debt in bankruptcy. [New York Times]
* “The groups that attempt to rank schools are involved in a lot of hogwash.” Even if that’s the case, people are still going to care about the University of Illinois’s rankings nosedive after the Paul Pless to-do. [News-Gazette]
* Don’t be scared by the absurd tuition rates or the abysmal job prospects, because law school is still a great investment for African-Americans — and for law schools in search of diversity, too. [National Law Journal]
* “[T]hat a lawyer would take this kind of case is shocking.” Sadly, it’s not. Angelica Marie Cecora, the alleged escort who filed a $5M suit against Oscar de la Hoya, now has to pay all of his legal fees. [New York Post]
This may sound like advice coming from a broken record, but in case you are somehow still unaware of this very important fact, you generally cannot discharge your law school loan debt in bankruptcy. Sure, there’s an “undue hardship” exception to this steadfast rule, but it’s a difficult standard to meet.
The government will go to the ends of the earth to prove that you are capable of paying back what you owe and just unwilling to do so. To be frank, you’d probably be better off becoming totally and permanently disabled or dying, because then you or your estate would only have the ensuing tax nightmare to deal with.
Judges know that the burden of “undue hardship” is a difficult one to prove, and most of them probably think that it’s a load of crap. Unfortunately, most of them are unwilling to say so. But not this Oregon judge — she launched into a pointed, four-page critique of legal education, while ruling on a law school debtor’s attempt to discharge his student loans in bankruptcy.
No, she won’t grant you a discharge, but that doesn’t mean she has to like it. You know it’s going to be good when a judge cites to Above the Law while discussing student loans….
* In case you’ve been sleeping under a rock, Mitt Romney picked Rep. Paul Ryan as his Vice Presidential running mate. Putting politics aside, this is a great pick, if only because Ryan is so handsome. Seriously, he’s a total stud. [Wall Street Journal]
* “How can I be the one guy with a good degree who is going to be chronically unemployed?” Sadly, many lawyers are still looking for jobs after (multiple) layoffs, but thanks to a lack of positions, employment is just “not in the cards” for them. [New York Times]
* Deadliest clerkship? The Washington, D.C. judge who presided over one of the most violent mass shooting cases in the nation’s capital was reportedly held up at gunpoint last week, with her law clerk in tow. [Fox DC]
* Something is rotten in the state of Denmark Texas. Judge Sam Sparks “know[s] the smell of bad fish,” and now wants to know why the USADA waited so long to bring charges against Lance Armstrong. [Bloomberg]
* After reversing a bankruptcy court’s decision that loan repayment would be an “undue hardship” for a law school debtor, a judge took the time to rip law schools a new one over escalating tuition. [Oregonian]
* Match.com class-action plaintiffs found no love in court after a federal judge ruled that the dating website hadn’t breached its user agreement. Much like their love lives, their claims aren’t getting any action. [Reuters]
* A man who is his own lawyer has a fool for a client: 23% of all cases filed in the federal court for the S.D.N.Y. are brought by pro se litigants, and the vast majority of them seem to have lost their minds. [New York Post]
Law school graduates both young and old are living under the heavy weight of student loan debt, but we don’t need to tell our readers that law school costs a pretty penny — they already know. The people who do need to know are those who are thinking of applying to law school. Those people need all of the information that they can get their hands on so that they’re able to make an intelligent decision when choosing a law school.
Unfortunately, there doesn’t seem to be a way to discern the actual debt loads that recent law school graduates are carrying, if only because law schools have been misreporting the average indebtedness of graduating students to both the American Bar Association and U.S. News and World Report.
Which law schools are guilty of this committing practice? The ABA claims that administrators from “a number” of schools have contacted the organization in order to correct their information about loan debt….
Of the many things we’ve spoken about when it comes to student loan debt, romance and dating generally hasn’t been one of them. You probably never thought that your student loans would be both financially and romantically ruinous, but as it turns out, young adults aren’t keen on getting into bed with six-figures of debt every night.
Sure, you may never be able to buy a house, but you already knew that — after all, you’ve already got a mortgage on your education. That being said, it might take a while to find that special someone to rent with for the foreseeable future. Or hell, let’s be a little more realistic: you might be living with your parents. Do you really feel comfortable bringing home dates to a room filled with stuffed animals or high school football trophies?
If you feel like your love life is becoming a parodic version of that Carly Rae Jepsen song (Hey, I just met you / And this is crazy / But you’ve got loan debt / Lose my number, maybe?), fear not, because you’re not alone….
The average debt of law graduates tops $100,000, and most new lawyers do not earn salaries sufficient to make the monthly payments on this debt. More than one-third of law graduates in recent years have failed to obtain lawyer jobs. Thousands of new law graduates will enter a government-sponsored debt relief program, and many will never fully pay off their law school debt.
Here’s an unsurprising newsflash: young people have student loan debt, old people have student loan debt, and they have no idea what to do about it. With student loan debt having surpassed the one-trillion-dollar mark, we’ve officially reached a point where the media is calling this the crisis du jour.
We’ve discussed the dangers of incurring student loan debt time and time again throughout these pages, but it seems that people still don’t get it. They’d like some more — hmm, how shall we put this? — “sage” advice. They’d prefer to publish their woes for all to see on “the most popular and widely syndicated column in the world.”
They’ve chosen to go to Dear Abby for the answers….
* Arizona’s immigration law is heading to the Supreme Court today. Meanwhile, former Senator Dennis DeConcini lobbed the worst insult ever against his state. How embarrassing for you, Arizona. [New York Times]
* Will Wal-Mart regret not disclosing its bribery investigation sooner? Not when the delay saved millions in criminal fines. What Wal-Mart will regret is being forced into disclosure by the NYT narcs. [Corporate Counsel]
* Delete all the oil from ocean, and then maybe we’ll care about this. A former BP employee was charged with obstruction of justice for deleting texts having to do with the Deepwater Horizon disaster. [Bloomberg]
* The Tennessee Board of Law Examiners has granted Duncan Law an extension on its bid for ABA accreditation. Woohoo, five more years of allowing students to “negligently enroll.” [Knoxville News Sentinel]
* “Once you cross the six-figure mark, you think, what’s a few thousand dollars more?” You’re doing it wrong: you’re supposed to be bragging about a six-figure salary, not a six-figure debt obligation. [Baltimore Sun]
* New Jersey residents don’t always have the great pleasure of nearly being killed by two high-speed Lamborghinis, but when they do, they prefer that police officers be suspended and sue over it. [ABC News]
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: asia@kinneyrecruiting.com.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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As we mentioned in the Labor Day edition of Morning Docket, there’s some interesting news on the Dewey & LeBoeuf front. The one former Dewey partner being sued by Citibank for allegedly defaulting on a capital loan — energy lawyer Steven Otillar, now a partner in the Houston office of Akin Gump — is opposing Citi’s attempt to collect on the debt, by arguing that he was “fraudulently induced” to borrow the money in question.
Comment of the Week: Loan Debt Redemption
By Staci ZaretskyOver Labor Day weekend, the New York Times had an interesting article about the apparent “ease” with which one can get student loan debt discharged through bankruptcy. And by “ease,” we mean that there’s a whopping 39% chance that you’ll receive a full or partial discharge, but only if you can show that you’re a lost cause to society without any semblance of dignity or hope for the future. Easy, right?
Well, actually, yeah. Because when you’ve got six figures of law school loan debt hanging over your head for a degree that you thought was going to be marketable and you’ve resigned yourself to a job as a sandwich artist at Subway just to make a buck, you’re going to lose hope pretty quickly.
And that’s exactly why our Comment of the Week was just so damn appropriate….
Tags: Bankruptcy, Comment of the Day, Comment of the Week, Debt, Debtors, Debts, Law School Debts, Law Schools, Loan Debt, Money, Student Debt, Student Debts, Student Loan Debt, Student Loans, Undue Hardship