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Universitys Refusal to Allow Student Debtor to take Exams Register for Classes Before Payment of Prepetition Debts Violates Bankruptcy Code According to Latest ABI Quick Poll

Contact: John Hartgen
               (703) 739-0800
               jhartgen@abiworld.org

 

UNIVERSITY’S REFUSAL TO ALLOW STUDENT DEBTOR TO TAKE EXAMS, REGISTER FOR CLASSES BEFORE PAYMENT OF PREPETITION DEBTS VIOLATES BANKRUPTCY CODE, ACCORDING TO LATEST ABI QUICK POLL

June 22, 2009, Alexandria, Va. —An overwhelming majority of respondents (75 percent) in a recent ABI Quick Poll thought that it was a violation of the Bankruptcy Code for a university to refuse to allow a student debtor to take exams, receive grades or register for new classes until the debtor paid prepetition tuition payments. Fifty-nine percent “strongly agreed” and 16 percent “agreed somewhat” that a university’s refusal to allow a student debtor to take exams, receive grades or register for new classes as it would be considered an act to collect a debt which violates the automatic stay.

Twenty percent did not think that a university’s refusal to allow a student debtor to take exams, receive grades or register for new classes until the debtor paid prepetition tuition payments was a violation of the Bankruptcy Code. Sixteen percent “disagreed strongly” and four percent “disagreed somewhat.” Two percent of respondents did not know or had no opinion on the issue.

The poll was based on a recent decision by the U.S. Court of Appeals for the Seventh Circuit in In re Kuehn where the court found that a university’s refusal to provide a student transcript as a result of the student’s prepetition tuition debt violated the Bankruptcy Code’s automatic stay (§362(a)(6)) and discharge injunction (§524(a)(2)) provisions.

ABI members and members of the public were welcome to submit their response to the statement: “A university’s refusal to allow a student debtor to take exams, receive grades or register for new classes until the debtor paid prepetition tuition payments is an act to collect a debt which violates the automatic stay. (In re Kuehn, 7th Cir. April 16, 2009).”

ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.