Posts Tagged: ‘Bankruptcy Protection for Student Loan Borrowers’

More than half of all student loan borrowers have seen scams

September 15, 2016 Posted by kingcade

Approximately 60% of more than 6,300 student loan borrowers surveyed said they have seen scams for advertisements promising relief from their student loan payments. Nearly 45% of the respondents said at least one of these companies reached out to them directly, according to the survey conducted by the personal finance site NerdWallet, and student loan advocacy group, Student Debt Crisis.

These predatory companies offer to help borrowers with their student loan payments for a fee, but typically provide services borrowers can access from the government for free- or sometimes they provide nothing at all.   The more than 40 million student loan borrowers with $1.3 trillion in student loan debt has become a vulnerable part of the population.

In response to borrowers’ struggles, the Obama administration has gone to great lengths to expand the assistance programs borrowers can use to manage their debt.  But scammers have used these programs as an opportunity to lure borrowers, advertising their services with government logos and phrases like “Obama student loan help.”

About 9% of the survey respondents said they paid for student debt relief services, spending an average of $613. The Consumer Financial Protection Bureau has taken legal action, accusing various student loan debt relief companies of deceiving borrowers into paying for services they can get for free from the government and keeping borrowers on the hook for a repeating charge illegally.

Consumer advocates say the prevalence of these student loan debt relief scams is reminiscent of the mortgage crisis, where servicers failed to provide homeowners with necessary information and scammers targeted a vulnerable portion of the population.

The Department of Education is taking action and working on revamping the student loan servicing system, giving servicers more of an incentive to work with borrowers, and repay their loans through one government-branded portal.  By fixing the current system, borrowers will not be as tempted to turn to these predatory companies.

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, 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 website at www.miamibankruptcy.com.

Related Resources: http://www.bbb.org/wisconsin/news-events/bbb-scam-alerts/2015/04/bbb-alert-con-artists-are-targeting-student-loan-holders

New Jersey Student Loan Agency Instructs Staff Not to Tell Borrowers About Help Unless They Ask

August 2, 2016 Posted by kingcade

New Jersey has the largest state-based student loan program in the country. However, the terms of the loans offered through the program are particularly harsh and can lead to financial hardship.

Recently, internal emails from the staff at Higher Education Student Assistance Authority were released where employees were instructed not to tell families that they may qualify for loan forgiveness unless they ask.

The email sent to staff members in May 2016 from a supervisor said, “Families of deceased borrowers (or surviving cosigners) must inquire if HESAA has a policy on loan forgiveness. We should not be volunteering this information.”

The agency’s chief of staff, Marcia Karrow, released a statement that said the emails “do not accurately reflect the Authority’s policy or practice on loan forgiveness.” However, Karrow did not provide any proof that management had corrected the instructions that were sent out by email.

According to HESAA, they have helped 35 out of 50 cosigners or co-borrowers who have requested assistance after a borrower died or became disabled over the past four years.

The same company released a statement directly following Superstorm Sandy in 2012 stating that borrowers’ credit ratings would not be affected if they made a late payment. Instead, the agency only erased late payment reports if a borrower requested it.

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, 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 website at www.miamibankruptcy.com.

Obama Administration Unveils NEW Student Loan Forgiveness Program

June 17, 2016 Posted by kingcade

This week, the Obama administration announced new guidelines for the forgiveness of certain student loans.  The program would forgive student loan debt for those borrowers who were the victims of scams perpetrated by for-profit colleges that used fraudulent or illegal practices to convince students to enroll.  While there are already federal laws in place for this, these new guidelines would make it easier to apply for this type of forgiveness.

If finalized, the new program would go into effect in July 2017. Under the new plan, borrowers would be able to ask for debt forgiveness if they can prove one of the following:

  • The school had a court judgement against it;
  • The school breached their contract with the student;
  • The school made a “substantial misrepresentation” about their offerings, graduate job prospects or the debt the student would accrue.

Under the new proposal, students would be able to request debt forgiveness up to six years following their discovery of the school’s wrongdoing, an increase from the current two-year limit.

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, 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 website at www.miamibankruptcy.com.

Local Doral Company Sued for Running a Massive Student Loan Debt Scam

June 2, 2016 Posted by kingcade

The Federal Trade Commission (FTC) and Florida Attorney General Pam Bondi are suing the Doral-based, Student Aid Center, for illegal business practices in the hopes of recouping some of consumers’ lost money.

The Student Aid Center, which claimed to help graduates relieve themselves of student loan debt, is now facing serious legal trouble of its own. The two owners filed for bankruptcy in February, stating the company had liabilities between $1 million and $10 million.

In addition to the FTC and the State of Florida complaint, Minnesota and the District of Columbia have filed lawsuits accusing Student Aid Center of “deceptive practices.” The Minnesota lawsuit alleges one of the owner’s Instagram account frequently referenced Jordan Belfort, the money-grubbing stockbroker depicted in the Leonardo DiCaprio film The Wolf of Wall Street.) The account has since been taken down.

The owners were savvy marketers, running advertisements on social media, radio spots, Google ads promoting the tagline, “Obama Loan Forgiveness,” and even in one case, an aerial banner flying over South Beach.

The complaint brought by the FTC and the State of Florida says Student Aid Center “preyed on consumers’ anxiety about student loan debt” by falsely promising to reduce or even eliminate it.

The company demanded upfront fees in five monthly installments of $199 or more, according to the complaint- even though graduates can apply for government loan forgiveness programs free of charge. Student Aid Center went as far to tell its customers to stop paying their lenders and instead pay the company directly, the lawsuit alleges.

But although the company lured in customers by promising a 100 percent money-back guarantee, Student Aid Center later deflected those who demanded refunds by either not returning the money or returning an amount much less than what had been paid, according to the FTC.

Click here 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, 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 website at www.miamibankruptcy.com.

Related Resources:
http://www.miaminewtimes.com/news/doral-company-ran-massive-student-loan-debt-scam-feds-say-8491808

Obama Plans to Forgive $7.7 Billion in Student Loan Debt for the Permanently Disabled

April 14, 2016 Posted by kingcade

The Obama administration plans to forgive $7.7 billion in federal student loan debt for nearly 400,000 permanently disabled Americans.  The law states that anyone with a severe disability is eligible to have their federal student loan debt discharged.

Four years ago, the administration took steps to make the process easier by allowing people who are totally and permanently disabled use their Social Security designation to apply for a discharge, but few took advantage of the opportunity. The Department of Education is now taking it upon itself to identify eligible borrowers and guide them through the process to discharge their student loan debt.

Working with the Social Security Administration, the department has been able to identify 387,000 matches in its first review.  Approximately 179,000 of those people are currently in default on their loans, putting them at risk of losing their tax refunds and having their Social Security benefits garnished.

Those Americans with disabilities have the right to student loan debt relief. This week’s announcement further extends President Obama’s Student Aid Bill of Rights, which directs federal agencies to overhaul the way Americans repay student loan debt.

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, 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 website at www.miamibankruptcy.com