In a stunning continuation of last year’s high profile attempt by bankruptcy trustees to have a portion of a parents contribution to tuition fees returned to the parents own creditors after they have been forced to file for bankruptcy protection, A recent report has shown that colleges and universities have returned at least $276K and change to the courts for disbursement to parent’s creditors after the parents filed for bankruptcy.
The bankruptcy trustees in the cases have successfully argued that the money the parents doled out for their kids higher education should have realistically gone to pay down the parent’s outstanding debts rather than gone to the institutions for tuition payments for the kids. It would seem that many of the colleges and universities have chosen to settle the matters out of court rather than face a long and protracted legal battle.
There are some who are challenging the legality of the suits and are fighting it out with the backing of at least 4 federal lawmakers who believe that the suits are unconscionable and are currently backing a law to ban them.
While some colleges have capitulated and returned the money they have sought recourse by holding back the diplomas and credentials of graduating students and have reserved the right to seek recompense from the students themselves. This is a very interesting story that will most definitely hold further developments.
If you are in need of bankruptcy assistance be sure to rely on a qualified bankruptcy lawyer. Dallas, TX is home to the Lee Bankruptcy Law office that provides affordable, high quality representation for each client that desires to achieve a financially solid future.