student loans

Software sales trainer Prehired loses bid to keep bankruptcy in N.Y.

(Reuters) – A New York bankruptcy judge on Tuesday transferred the bankruptcy of Prehired LLC to Delaware, ruling that the software sales training company did not have sufficient business ties to New York to file for bankruptcy in the state.

U.S. Bankruptcy Judge Philip Bentley granted the transfer at the request of Delaware’s attorney general, one of several state AGs investigating Prehired for its attempts to collect on payment agreements that allowed students to defer fees for career training.

Prehired filed for Chapter 11 protection in New York in September, citing students’ failure to pay for sales training and state attorney general investigations into its attempt to collect money from former students. Prehired requires its students to pay $30,000 in $500 monthly installments after they land a job in the field of software sales.

Delaware Deputy Attorney General Katherine Devanney argued that Prehired’s bankruptcy case should be heard in Delaware, where the company is incorporated and where it sued 289 former students who did not make payments after completing Prehired’s training.

Prehired’s attorney Christopher Warren argued that the bankruptcy case should remain in New York because its principal assets are contracts based on New York law. The assets are mostly

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It’s a ‘severe problem’ that student-loan borrowers are still facing roadblocks getting rid of their debt through bankruptcy, Elizabeth Warren says

Sen. Elizabeth Warren.Tom Williams/CQ-Roll Call, Inc via Getty Images

  • Elizabeth Warren called on the Justice Department to restore bankruptcy protections for student-loan borrowers.

  • Borrowers currently have to prove a difficult standard in court to get rid of their debt.

  • Biden’s administration has promised reform, but the process continues to be slow-moving.

Massachusetts Sen. Elizabeth Warren is renewing the call to restore bankruptcy protections for student-loan borrowers.

Last week, President Joe Biden took a major step in providing relief to millions of borrowers by announcing up to $20,000 in student-loan forgiveness for those making under $125,000 a year. While that relief is expected to wipe out balances for 20 million borrowers, the majority will still have debt balances that some might seek to discharge in court through bankruptcy. But doing so has historically been very difficult, and Warren wants Attorney General Merrick Garland to ensure bankruptcy becomes a viable route to providing relief.

“To support the administration’s efforts to overhaul the student loan system and ensure that bankruptcy relief is a viable option for borrowers in severe financial straits, it is critical that you issue and implement this updated guidance without delay,” Warren wrote in a Thursday letter

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Warren Grills DOJ on Why It’s Still Trying to Crush Student Debtors in Bankruptcy Court

Just over a week after President Joe Biden unveiled a plan to cancel $10,000 in federal student loan debt for most borrowers and reform the income-driven repayment program, his administration on Thursday was rebuked once again for its ongoing effort to deny bankruptcy relief to some of the nation’s most hard-pressed student debtors.

“Those who continue to struggle with student debt are in need of updated undue hardship guidance.”

In a letter sent to Attorney General Merrick Garland, Sen. Elizabeth Warren (D-Mass.) asked about the status of the Department of Justice’s “work to update guidance on how it handles undue hardship claims by student borrowers in bankruptcy proceedings.”

“To support the administration’s efforts to overhaul the student loan system and ensure that bankruptcy relief is a viable option for borrowers in severe financial straits,” Warren wrote, “it is critical that you issue and implement this updated guidance without delay.”

Although Biden spent years as a senator siding with lenders and making it more difficult for Americans to reduce educational loan repayment obligations in court, he promised last year to “allow for student debt to be relieved in bankruptcy,” which would help give overwhelmed borrowers a fresh financial start.

Nevertheless,

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