In today’s filing from tabloid scandals you can never, ever escape, comes news that Casey Anthony, who was found not guilty of the murdering her two-year-old daughter Caylee in a 2011 trial, declared bankruptcy last week.
Anthony, who is unsurpringly unemployed (would you hire this woman?), claims debts of just under $800,000 on assets of a little more than $1,000, most of which appear to be some rather inexpensive pieces of jewelry. Those bills are mostly the result of the costs of mounting a defense against the charges she murdered daughter, with $500,000 owed to her attorney Jose Baez, and hundreds of thousands of dollars in other debts run up to private investigators and various forensics experts. There’s also a miscellaneous charge to a scuba diving business.
Most experts agree Anthony’s bankruptcy filing is also likely an attempt to seek financial protection from a number of civil lawsuits filed against her by people ranging from Roy Kronk, the man who found Caylee’s body only to be accused of murdering the child by Anthony, to Zenaida Fernandez-Gonzalez, who was unfortunate enough to actually have the same name as the non-existent babysitter who was also accused by Anthony of having a role in the toddler’s death.
Looking over Anthony’s bankruptcy application, at least once criminal defense attorney said it was the only thing she could do. “Wiping her debt away through bankruptcy was inevitable,” John Contini, a Florida attorney, told Examiner.com. “Without the protection of the federal Bankruptcy court, Casey Anthony would never be truly set free.”
Contini might well be right. But the bankruptcy laws that are almost certainly going to be quite helpful to Casey Anthony will offer no such recourse to the men and women who borrowed money so they or their loved ones could attend college. One can only wipe out student loan debt in bankruptcy court under the most dire of circumstances (think terminal and chronic illnesses). All too many borrowers, to use Contini’s phrasing, will never be set free of the loans that bind them.
The cost of college has gone up by 1,000 percent since the 1980s, even as our incomes stagnated and our net worth plunged. As a result, more and more were forced to turn to student loans to pay for college tuition, with the result that the average student loan tab of a borrower graduating in 2011 topped $27,000. Collectively, the number is more than $1 trillion owed, a numbers that dwarfs the amount of money outstanding on credit card balances. This debt was incurred not just owed by the students themselves, but also by their parents, who were all-too-often encouraged by the institutions their children were attending to turn to private loans offered by eager banks to help pay the bill.
Long-term default is all-but-impossible, as those issuing loans for higher education have the right to garnish everything from tax refunds to Social Security checks in their quest to be paid back. This sort of debt is life-altering and, thanks to the way the laws are structured, very few lenders will even negotiate payment plans with their student loan debtors with the result that many face decades – or even a lifetime – of monthly payments. Borrowers find themselves chained to low-paying jobs that offer little in the way of advancement, because they cannot afford to wait till the right job comes along for fear of running of usurious penalty charges if they cannot afford to pay their bills for several months. Economists have speculated the increasing amount of debt is impacting everything from business start-ups to housing prices, as more of more recent graduates cannot afford to live anywhere but with mom and dad, never mind purchase a residence of their own.
It should be obvious there is something deeply wrong with our laws when someone like Casey Anthony can turn to the bankruptcy courts for a fresh financial start, but men and women who incurred debt in an effort to better themselves or their loved ones cannot get even a smidgeon of such aid.