Posts Tagged: ‘student loan bankruptcies’

Trump Administration Delays Student Loan Forgiveness Program

June 26, 2017 Posted by kingcade

The federal student loan forgiveness program established to refund borrowers who were defrauded by their schools has been put on hold until further notice, according to the Department of Education.  This applies to Corinthian College students who were defrauded by the school’s deceptive advertising and false job placement rates.  Approximately 15,000 student loan forgiveness claims from Corinthian students had been approved as of October 2016.

Here are the requirements for qualifying for a borrower defense federal loan discharge:

  • If your school misled you in any way about your loans or education program;
  • If your school violated certain state laws, such as consumer protection statutes or laws related to your loan or educational services.

Secretary of Education Betsy DeVos said on June 14 that last year’s expansion of the forgiveness rules “missed an opportunity to get it right.” Several Democratic senators are demanding answers and asking the Dept. of Education to provide detailed information regarding loan forgiveness applications and approvals for past students of Corinthian Colleges, along with two other failed for-profit college chains: ITT Technical Institute and American Career Institute.

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.

Former ITT Tech Students Promised Help, then Silence

June 12, 2017 Posted by kingcade

It’s been nearly five months since former ITT Technical Institute students received a glimmer of hope that their student loan debt would be forgiven.  Today they are still waiting.

The U.S. Department of Education announced on Jan. 13 that former ITT students — people who graduated or dropped out of the for-profit now defunct college chain long before the Obama administration forced it into bankruptcy — had a chance to get their federal student loans forgiven through a process called borrower defense to repayment.

In a statement, the Education Department said “approvals are beginning” for those students who claimed ITT defrauded them.

That work appears to have stopped altogether. Although the government issued letters to some students promising loan forgiveness within the 120 days, there is no evidence that the Education Department has forgiven loans for any former ITT students since President Trump’s Jan. 20 inauguration.

This is just the latest setback for former ITT Tech students who say they were lured in with false promises and left with a mountain of debt (five- and six-figure student loan debt), few marketable skills and limited job prospects.

Several Democratic senators are seeking answers. U.S. Sens. Dick Durbin of Illinois, Chuck Schumer of New York, Patty Murray of Washington, Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts last week sent a letter to DeVos requesting information on borrower defense claims.

The senators are asking the Dept. of Education to provide detailed information regarding loan forgiveness applications and approvals for past students of ITT, along with two other failed for-profit college chains: Corinthian Colleges and American Career Institute.

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.

Women Hold Nearly 65% of America’s Student Loan Debt

June 5, 2017 Posted by kingcade

Women are now the majority on U.S. college campuses- representing 56% of all students enrolled, and according to a recent report they are also shouldering much of the nation’s student loan debt.

The American Association of University Women (AAUW) found that on average, women hold $833 billion of the country’s $1.3 trillion student loan debt, compared to men who hold $477 billion.

African American women take on more student loan debt than any other group of women, with an average of $30,000, according to the study.  In addition, women take two years longer to pay off that debt, partly because of the gender wage gap.

It is estimated that women make 20% less than men four years after graduating with a bachelor’s degree. That pay discrepancy leaves women at a particular disadvantage with less disposable income to use to pay back their loans. In the time period between one and four years after graduation, men paid off an average of 38% of their outstanding debt, while women paid off 31%, according to the study.  Meanwhile, approximately one-third of women experienced financial difficulties, while paying off their loans, compared to just one-fourth of men.

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.

Single Mom Is Able to Discharge her Student Loan Debt in Bankruptcy

June 1, 2017 Posted by kingcade

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit (Fern v. FedLoan Servicing (In re Fern) held that a single mom of three can discharge her student loan debt in bankruptcy because it would impose an undue hardship on her family.

Typically, student loan debt cannot be discharged in bankruptcy unless the debtor can prove “undue hardship,” which is not defined in the Bankruptcy Code.

A majority of circuits follow the test adopted by the Second Circuit in Brunner v. New York State Higher Education Servs. Corp, 831 F.2d 395 (2d Cir. 1987), where the debtor must establish:

(1) That he or she cannot maintain, based on current income and expenses, a “minimal standard of living for herself and her dependents if forced to repay the loans;

(2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and

(3) that the debtor has made good faith efforts to repay the loans.”

However, the Eighth Circuit follows a more “flexible approach” under a “totality of the circumstances test,” Judge Anita Louise Shodeen wrote.

The court looked at past, present, and reasonably reliable future financial resources, a calculation of reasonable living expenses, and other “relevant facts and circumstances.”

The single mom in this case had $27,000 in student loan debt and had never made a payment. She initially took classes to become an accounting clerk, but did not finish the program and switched careers, training to be an esthetician.

She received minimal or no child support from the fathers of her three children. Her monthly take-home pay from her current job was $1,506, and she received food stamps and rental assistance. Her income had been consistent and was unlikely to improve in the future, the court said.

Her monthly living expenses are reasonable, necessary and modest, the court said. Her family monthly expenses are $2,475, and her monthly income from all sources is $2,413, resulting in a $62 per month deficit.

The Department of Education argued that she qualified for a repayment program where her payment would be nothing, which would not affect her current standard of living, but the court rejected it.

A zero monthly payment obligation does not automatically mean there is an ability to pay, the court said.

Judge Robert J. Kressel and Chief Judge Arthur B. Federman joined the opinion.

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.

South Florida Student Loan Scam Shut Down by FTC

May 30, 2017 Posted by kingcade

A federal court has shut down a phony student loan debt relief and credit repair company that was operating in Lake Worth, Delray Beach, Boca Raton and Las Vegas.  The FTC charged its operators with scamming millions of dollars from consumers by falsely promising to reduce- even eliminate their student loan debt.

The owner of Strategic Student Solutions and related entities used corporate funds to pay for personal expenses, including: jewelry, casino tabs, mortgage payments, luxury vehicles, clothing and the construction of a pool, according to the FTC.

The U.S. District Court for the Southern District of Florida has halted the company’s operations and seeks to permanently stop the alleged illegal practices and refund consumers. Borrowers, who trusted Strategic Student Solutions, watched their student loan debt go from bad to worse.

The operators of Strategic Student Solutions lured student loan borrowers with promises such as, “Payments as low as $0 monthly” and “Save 60 percent or more on your monthly payments.”

However, consumers discovered the defendants failed to enroll them in any loan forgiveness or payment reduction plans, and found out none of their monthly payments were applied to their student loan debt.

The company falsely represented that they would provide credit repair services and improve consumers’ credit scores.  Instead, they charged consumers illegal fees of up to $1,200 and monthly payments of $49.99.

The bottom line: Never pay an up-front fee to a company promising to deliver debt relief. Through deceptive marketing practices, this company and others like them, claim to offer borrowers the opportunity to get them out of debt, consolidate their loans and lower their monthly payments for a fee.  It is important that borrowers know, these same services are offered by the Department of Education — for free.  Borrowers looking to reduce their monthly student loan payments should contact the Department of Education for official guidance.

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.