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  1. #1
    Join Date
    Jan 2010
    Posts
    2

    Default Loss of Bar Membership After Default

    My question involves collection proceedings in the State of: Washington

    I am a lawyer. I defaulted on my student loans which are Federal and private (approx. $92,000). Currently I am laid off and cannot find work. I was informed (by the debt collector) that if I cannot make the minimum payments (which I cannot), my bar license will be revoked (which basically means that I will never be able to pay).

    Is this accurate? I told that I will have not hearing and that it will just happen through an administrative process. Is there anything I can do to prevent this besides making the payment?

    Thanks

  2. #2
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default Re: Loss of Bar Membership After Default

    Your license certainly can be suspended for failure to pay your student loans. It happens in other states - see here, here, and here - but I'm unable at the moment to find the statutes for your state.

    You might consider contacting your local Bar Association to see what the exact policies and procedures are for your state.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Loss of Bar Membership After Default

    You should start by looking up the relevant legal authority.
    Quote Quoting RCW 2.48.165 - Disbarment or license suspension - Nonpayment or default on educational loan or scholarship.
    The Washington state supreme court may provide by court rule that nonpayment or default on a federally or state-guaranteed educational loan shall result in disbarment or license suspension of the license of any person who has been certified by a lending agency and reported to the court for nonpayment or default on a federally or state-guaranteed educational loan or service-conditional scholarship. The supreme court may reinstate the person when provided with a written release issued by the lending agency stating that the person is making payments on the loan in accordance with a repayment agreement approved by the lending agency.
    I don't see that the Supreme Court has enacted a provision despite its authorization by the statute; look for yourself, here.

  4. #4
    Join Date
    Jan 2010
    Posts
    2

    Default Re: Loss of Bar Membership After Default

    Thank you so much for the information. I appreciate it. At any rate, as I suspected, I am at least going to have some notice. This also seems like a relatively rare occurence, but scary nonetheless.

  5. #5

    Default Re: Loss of Bar Membership After Default

    Is this a federally guaranteed student loan threatening you? If it is, you have a year after you find work under federal law before administrative garnishment proceeding can be applied against you since you are unemployed (assuming not by your own volition). If you have a hearing to revoke your license, you might want to point this out.
    If this is a privately guaranteed student loan threatening you, they may be in violation of the FDCPA because they have no specific authority under the Washington statute to instigate revocation proceedings since it only seems to apply to student loans under the HEA. If this is the case, contact a consumer rights attorney to consider your options as far as suing for $1,000 plus attorneys fees.
    As an aside, the Santulli appellate decision appears to be a horrible precedent because it gives deference to a Board that "has considerable discretion in applying admission standards." I would like to know why it took the appellate court 6 years to arrive at a decision when it expected a bankruptcy court to arrive to a conclusion in less than 4 months. Of course we find in the appellate court's conclusion that Mr. Santulli did finalize a bankruptcy judgment, but after the trial court made it's decision. Again, if Mr. Santulli defaulted on student loans, why does filing for bankruptcy affect his character? Were these federally guaranteed student loans or private student loans? If Mr. Santulli defaulted on his mortgage, would it have been as bad?

  6. #6
    Join Date
    Jul 2009
    Posts
    249

    Default Re: Loss of Bar Membership After Default

    Quote Quoting makama
    View Post
    Thank you so much for the information. I appreciate it. At any rate, as I suspected, I am at least going to have some notice. This also seems like a relatively rare occurence, but scary nonetheless.
    I would think a board of law examiners would be willing to take into account your history of good faith payments on the loans when you were employed, the state of the economy, your efforts to find new employment, and your efforts to maintain contact with the creditor before disbarring you.

    Also, did you avail yourself of the different forebearance and deferrment programs federal student loan programs offer? I would expect it to make a difference whether or not you did. Their "economic hardship" deferrments are pretty generous.

    I.e., if you're doing everything you can to make payments, or otherwise keep the loan in good standing, and just can't do it because you can't find work, I wouldn't expect a board of law examiners to disbar you anyway. It doesn't make any sense from a policy perspective, from an ethical perspective, or any perspective.

    I would think that. But then, I'm not a law examiner.

  7. #7
    Join Date
    Jan 2010
    Posts
    102

    Default Re: Loss of Bar Membership After Default

    that is very cruel & clearly abuse.

    to disbar or take away any professional license, due to inability to pay.

    that should only be used in very rare circumstances.
    IE
    when a professional is doing very well financially & refuses to even make an effort to pay the SL .

    I have heard of Doctors that were living in mansions, driving luxury cars , cash in the bank & not paying a dime of their loans...that is the ONLY time such a drastic measure should be used.

    SL need to be restructured many are nothing more than loan sharking.

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