A Minnesota woman has lost her bid to defeat a lawsuit seeking to collect approximately $24,000 in unpaid student loans on the grounds that Minnesota’s six-year statute of limitations for collection on promissory notes, Minn. Stat. sec. 336.3-118.
The appellant, Catherine Roth-Steffen, graduated from law school owing more than $100,000 from more than a dozen lenders. Her creditors included the Missouri Higher Education Loan Authority, who assigned the loan to Guarantee National Insurance Company which in turn assigned it to Mountain Peaks Financial Services.
In a case of first impression, Mountain Peaks Financial Services v. Roth-Steffen, the Court of Appeals affirmed the Ramsey County District Court, which said that federal law that eliminates all statute of limitations on certain defaulted student loans applies to assignees and preempts state statutes of limitations.
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So, go to law school, incur a mountain of debt trying to better yourself, your community and your country, and if for some reason you cannot get a job, or lose a job, or have a family or personal tragedy, good luck getting out of it.
Stories like this make clear that the US is a TTT country. People in debt should have the option to declare bankruptcy. Its immoral to force people to carry out debt payments after they have made good faith attempts to find work and pay back their debt.
As a follow up
When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
Now I don’t doubt this woman was irresponsible but it is immoral to force her to pay off this debt for the rest of her life. She will though, because this is an immoral nation. We our the only developed nation that allows its citizens to go without health insurance, because we refuse to invest in each other. We tolerate far higher levels of child poverty than other developed countries, because most Americans don’t care about child poverty and would rather save money in taxes.
I saw this on the Web. Interestingly, the same article mentioned that Bisutti, 41, and her boyfriend of three years have put off marriage and having childen because of the loan debt. Her current repayment plan will have her repaying the debt until she is 70.
UMN Law Grad,
1. Leave “immoral” U.S., renounce citizenship.
2. Don’t repay law school loans.
3. ???
4. PROFIT.
@UMN Law Grad
There is a solution to that…don’t go to law school. Or maybe, go to a law school that will give you significant financial aid package, just as I did, to make sure that you can pay off your obligations.
In other words, be responsible.
And about the “immoral” thing. The US is actually unique when it comes to availability of consumer bankruptcy relief. In many countries it either does not exist at all, or as a very limited concept. In those “TTT countries” people are…gasp…responsible for the debts they decide to take, regardless of whether their dream plans actually materialized or not. Shocking, I know. But being from one of those countries has an advantage (I speak from personal experience) of being a debt free new graduate.
BRING BACK DEBTOR PRISONS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Anonymous
In all seriousness now. Your argument is an argument against the entire concept of bankruptcy.
I also think, like many people who take the hard line against bankruptcy reform, that your dramatically underestimate the role of luck in people’s lives. I’m glad your decisions have worked out for you.
But even people who make incorrect decisions deserve the opportunity to start their lives over again. Bankruptcy has consequences. Most importantly a ruined credit rating. Still it should be an option for all people. The fact that the US denies this opportunity reflects very negatively on our society. Most developed countries have much more favorable standards for bankruptcy. The nations you are discussing are generally developing nation that the US shouldn’t emulate.
Under the current system, people become walking debt to their student loans. This woman will probably never be able to afford to have a family. That’s immoral and your attitude of “be responsible” is quite glib. I have little doubt that you have taking many chances (or as you would put it irresponsible decisions) in your life.
@ UMN Grad
Luck is one thing, but taking on 150K in debt just hoping for a career that will pay for it, is simply stupid.
We can’t predict the future, but if every law school student assumes that he will get a big law job, and based on that assumption drowns him/her self in debt, I call it stupidity rather than being out of luck. I understand that your pereception may be different.
Again, you are writing about U.S. like it was a country where bankruptcy is not available to most people in one form or another. That is simply not true, and I would appreciate if you could provide some details about the “much more favorable standards” allegedly used by “most developed countries” for comparison.
And finally, yes, I have taken many chances in my life, but I always assumed that things could go wrong and I always owned up if they actually had. And if you read the whole article about this woman, you will see that she admitted to being “irresponsible” with deferrals and simply ignoring the debt (because why would one care, right?)