AmeriDebt will stop enrolling new customers; 'Negative publicity' blamed; Service is being sued in two states over fees
AmeriDebt, the debt counseling service being sued by two states, will stop enrolling clients and focus on its 92,000 customers. This policy is attributed to "negative publicity" about its ability to serve new clients.
AmeriDebt has spent millions of dollars annually on advertising to attract new clients. The company announced it will stop signing up new customers beginning Nov. 1 and suspend its ads on television, radio and the Internet.
The company hasn't decided whether to close down when all of its clients finish the program, or resume seeking new consumers later, said AmeriDebt lawyer Zynda Sellers.
AmeriDebt employs 50 workers but expects to cut its staff soon to about a dozen, Sellers said. She said she could not comment on whether changes will be made in top management.
The nonprofit will become leaner but will provide a higher level of assistance and education to clients, Sellers said.
On October 21, Sens. Graham (R-SC) and Durbin (D-IL), both members of the Senate Judiciary Committee introduced S.1772, a bill to establish a priority for the payment of claims for duties paid the United States by licensed customs brokers on behalf of the debtor.
The bill is the companion measure to HR 3033, introduced in the House September 4th.
The Senate bill was referred to the Judiciary Committee.
Two decisions seeming to arrive at opposite conclusions:
Fifth Circuit adopts the Bruner test for undue hardship discharges.
Held, the bankruptcy court erred in granting an undue hardship discharge to the debtor. Nothing in the Bankruptcy Code suggests that a debtor may choose to work only in the field in which he was trained, obtain a low-paying job, and then claim that it would be an undue hardship to repay his student loans. The debtor (a professional cellist) could obtain night-school teaching jobs, or even work as a music store clerk.
In re Gerhardt (5th Cir. 2003)
_______________________
Held, a debtor's choice to work in a low-paying field is not by itself an indication of bad faith, nor should it be used against a debtor in an evaluation of undue hardship.
in re Oyler (6th Cir. BAP 2003)
_________________
NOTE: We cannot yet provide a link to the full opinions. The items above are just a "heads-up" about interesting or important recent cases.
December 3-7, 2003 American Bankruptcy Institute La Quinta, California
Wed. – Sun. Winter Leadership Conference
703.739.0800 Web site: www.abiworld.org
December 11-13, 2003 Stetson College of Law (Judge Paskay) Clearwater, Florida
Thur. – Sat. Bankruptcy Law and Practice Seminar
Sheraton Sand Key Resort
1.727.562.7830 Fax: 1.727.381.7320
Email: cle@law.stetson.edu Web site: www.law.stetson.edu
