Category: ‘Student Loans’

Wells Fargo Faces Penalties over Ignoring Student Loan Debt Included in Bankruptcy

December 11, 2017 Posted by kingcade

An important legal victory was recently obtained for a borrower attempting to discharge a student loan debt.  Ryan, the consumer, filed for bankruptcy and following the bankruptcy Wells Fargo Bank sued Ryan and obtained a state court judgment to collect on the debt.

Ryan had attended Capella University, a for-profit school.  In the case, Educational Financial Services, a division of Wells Fargo Bank, made the argument the loan was not actually discharged in the 2007 bankruptcy.  When Wells Fargo sued Ryan in State Court to collect on the student loan debt they made no mention of Ryan’s previous bankruptcy and discharge.

Ryan felt pressured to enter a consent judgment over the debt in 2008 and made monthly payments of $150 on the loan for the next seven years.  Frustrated, he sought legal help to reopen his previous bankruptcy case and his attorney raised the valid point, “that the loans from Wells Fargo were discharged by operation of law on November 29, 2007, because the loans were not a student debt protected by any subsection of Section 523(a)(8).”

The issue at hand was if Ryan’s discharge had been violated because the loans were not student loans under Section 523(a)(8).

“Given Wells Fargo’s actual and constructive knowledge of the timing of the Plaintiff’s loans, the “cost of attendance” at Capella University, and the nature of the Loans it extended to the Plaintiff, Wells Fargo knew or should have known that the Loans were discharged in the Plaintiff’s bankruptcy,” the complaint states.

The Judge ruled that even though Ryan had previously repaid the debt through the State Court judgment he was not prevented from reopening his bankruptcy and filing an adversary proceeding to rule on the discharge of his non-protected private student loan debt.

This is why it is important for anyone who includes student loans in a bankruptcy to pursue an adversary proceeding to get a ruling on the dischargeability of the loans, a key step which is often overlooked.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

New House Bill Calls for Federal Student Loan Caps, End of Public Service Loan Forgiveness

December 7, 2017 Posted by kingcade

A new bill from House Republicans could end Public Service Loan Forgiveness for student loans.  The U.S. House of Representatives will consider proposed changes to the Higher Education Act, including limits on the amount of money students and parents can borrow in government student loan programs, and ending loan forgiveness programs for public interest employees.  Approximately a quarter of jobs in the U.S. economy are considered public interest positions.

The earliest someone could receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) program was October 2017, and not a single person has reported receiving loan forgiveness through the program.

The proposal also suggests changes to student loans’ income-driven repayment plans. Currently, if borrowers make payments of between 10 and 15 percent of their discretionary incomes the remainder of their school loans will be forgiven after 20 or 25 years.

Rep. Virginia Foxx (R-N.C.) and Rep. Brett Guthrie (R-KY) of the House Committee on Education and the Workforce introduced the 542-page legislation known as the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act. The PROSPER Act, if implemented, would have borrowers in income-driven repayment plans “pay 15 percent of discretionary incomes for as long as it took to cover the amount they would have paid under a 10-year standard repayment plan,” according to the Wall Street Journal.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.forbes.com/sites/zackfriedman/2017/12/06/house-bill-student-loan-forgiveness/#1f25540b7990

 

New Survey Reveals the Hidden Cost of Debt

December 4, 2017 Posted by kingcade

A survey of more than a thousand U.S. adults conducted by Harris Poll revealed that over half of the respondents said debt had negatively impacted their life.  Some of the top sources of concern among respondents included: “relationship tension” with a spouse or partner (21%) causing them to mislead family or friends about their “financial situation” (11%), many worried about their debt in general, (31%), at work, (18%) and before they went to bed (25%), according to the survey.

All of these worries led many to stress about everyday financial decisions because of their debt (28%). Some of the respondents received letters and calls from collection agencies (19%).

However, it was Millennials who showed the greatest signs of stress, with 68% saying debt has had a “negative impact” on their everyday life, a higher percentage than other generations surveyed such as Baby Boomers (48%) and GenXers (59%).

Click here to read more on this story.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Student Loan Borrowers Awarded $3.75 Million from Citibank

November 29, 2017 Posted by kingcade

The Consumer Financial Protection Bureau said in a consent order that Citibank improperly misled borrowers into believing they were ineligible for a tax deduction on interest they paid on certain student loans.  Student loan borrowers who were effected, will share $3.75 million in payments from Citibank for financial practices that forced them to make overpayments, a federal watchdog said this week.

In addition, the bank incorrectly charged late fees and extra interest to borrowers who were still in school and eligible to defer repayments on their student loans.  Citibank also misled borrowers about their monthly bills and failed to disclose required information after the bank denied borrower requests to release loan co-signers.

“Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” Richard Cordray, the consumer bureau’s director, said in a statement issued with the announcement.

Federal law allows student loan borrowers to deduct as much as $2,500 in annual interest they pay on student loan debt. However, Citibank made statements that suggested the borrowers had not paid qualified interest or were ineligible for the deductions.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

How the Tax Reform Could Affect those Paying off Student Loans

November 24, 2017 Posted by kingcade

As lawmakers consider two different bills that would overhaul the tax code, several changes on the table could affect Americans who are paying student loans. The House version of the bill would eliminate some tax benefits for those with college costs. However, the Senate version of the bill would leave most of them untouched. Both bills would eliminate many tax breaks, however; they would also roughly double the standard deduction.

If you are currently paying off your student loans, you can use the student loan interest deduction to lower your taxable income by as much as $2,500. It is an “above the line deduction,” meaning it can be claimed without itemizing. It is available to borrowers with modified adjusted gross incomes up to $65,000 or $130,000 of couples filing jointly. The current tax deduction saves people a maximum of $625 per year. The proposed House bill would repeal the deduction while the Senate bill would keep it in place.

If you are paying for your child’s tuition you can currently claim the American Opportunity Tax Credit for up to $2,500 per child enrolled in college each year. The full credit is available to couples earning up to $160,000 per year and an individual earning up to $80,000 per year. The proposed House bill would expand eligibility to a student’s fifth year at a reduced benefit and the Senate version would keep the credit as it is.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.