Bankruptcy Trustees Are Asking (and Getting) Colleges to Return Parents’ Money

The Wall Street Journal is out with an article taking stock of what appears to be a new trend: bankruptcy trustees who are seeking to take back insolvent parents’ tuition payments. The newspaper cites several examples of colleges’ agreeing to return payments, ranging from $4,000 to over $23,000. At least 25 colleges have been asked by bankruptcy lawyers to return money since 2008, the article states, and bankruptcy lawyers say such collection was unheard of several years ago.

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• Source: WSJ

Soaring college tuition payments are drawing attention from unexpected quarters: bankruptcy courts. In a growing number of personal bankruptcy cases, trustees responsible for collecting money for creditors have moved to claw back tuition payments that insolvent parents made for their children. The trustees argue the funds should be recovered to pay off the parents’ debts instead.

Read more at: www.wsj.com