Posts Tagged: ‘student loan bankruptcies’

U.S. Cracks Down on Collection of Private Student Loan Debt

September 19, 2017 Posted by kingcade

The U.S. consumer financial watchdog has ordered National College Student Loan Trusts and its debt collector, Transworld Systems Inc., to pay at least $21.6 million for attempting to collect on out-of-date loans and possible non-existent loans.

The Consumer Financial Protection Bureau (CFPB) alleges that the companies sued borrowers without being able to prove the debt was even owed or pursued collections where the debt was too old, relying on false and misleading legal documents.  There were at least 486 lawsuits filed where the statute of limitations had expired on the debt.

As a result, consumers made payments of at least $3.5 million on debt they did not owe, according to the CFPB. Transworld agreed to settle by paying a $2.5 million, which is part of the total of amount of at least $21.6 million.

Offered by banks and other companies, private student loans do not provide the same borrower protections and repayment options as federal student loans.

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.

Why Paying off Your Student Loan Debt Early Could be a Mistake

September 14, 2017 Posted by kingcade

The average college student who graduated in 2016 had approximately $37,172 in student loan debt.  While experts offer differing opinions on exactly which types of debts are considered good and bad, everyone agrees that debt on something that will end up making you money in the long run is essentially “good debt.”

A 2013 study based on Labor Department statistics showed that Americans holding a four-year college degree made 98% more per hour on average than those without a degree. Student loans are typically a low interest debt, as opposed to credit card debt which is typically the most expensive kind of debt.

The interest rate for undergraduate federal student loans disbursed in 2017 was 4.45%; the rate for federal graduate student loans was 6%. Compare that to the average credit card APR of 15.59%.

The Department of Education allows student borrowers to choose from up to eight different repayment plan options, several of which are designed for those with low income levels. If one repayment plan does not work, you can switch to another.

Private student loan debt is different and comes with a higher interest rate.  Private student loan lenders offer what is called “financial hardship forbearance,” which means you can suspend your payments due to financial hardship but the interest continues to accrue and is added to the balance.

Paying your student loan debt consistently overtime can lead to debt forgiveness.  Certain federal student loan repayment plans can result in automatic debt forgiveness. If you choose the Income-Based Repayment Plan, the Income-Contingent Repayment Plan, or either of the Pay As You Earn Repayment Plans, any balance you owe on your federal loans after 25 years will be automatically forgiven.  Student loan debt interest is also tax deductible, something you will see in your refund after filing your personal taxes.

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.

Regulators able to get $192 million in Student Loan Debt Settlement from Aequitas

September 5, 2017 Posted by kingcade

Aequitas Capital executives believed they had purchased a gold mine when they began buying student loans from Corinthian Colleges- instead, the debt proved to be the company’s downfall.  Following the for-profit college’s decent into bankruptcy and liquidation; Aequitas also collapsed amid accusations the company’s top execs were running a Ponzi scheme.

However, Aequitas continued to collect payments on the debt- until now. The U.S. Consumer Financial Protection Bureau and several state attorneys general and the Aequitas receiver reached a deal in which about 41,000 former Corinthian students whose debt is held by Aequitas could get more than half- possibly all, of their debt eliminated.

In July 2015, Aequitas became a key ally and vital source of liquidity for Corinthian by buying massive amounts of student debt. By helping finance Corinthian’s in-house private loans, Aequitas enabled Corinthian to access billions in student loan money from the U.S. government.

The bureau recently filed a lawsuit against Aequitas as part of the settlement. It claims Aequitas employees privately expressed anxiety about the huge percentage of Corinthian students who were failing to make their loan payments. “With defaults this high, how can we defend our practices,” the unidentified employee wrote in a 2011 note.

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.

Student Loan Servicer Accused of Mismanaging Debt Forgiveness Program

August 29, 2017 Posted by kingcade

According to a lawsuit filed by the attorney general of Massachusetts, one of the country’s biggest servicers of federal student loans has mismanaged its debt forgiveness program, raising repayment costs for hundreds of thousands of borrowers who work in public service jobs.

The loan servicer, FedLoan, has made numerous errors, potentially keeping many students in debt far longer than they expected, according to Maura Healey, the Massachusetts attorney general.

The company’s actions have jeopardized the financial futures of teachers and public servants nationwide. Consumer watchdogs and government officials have raised concern with the government’s public service loan forgiveness program, which promises qualifying workers — including teachers, librarians, police officers and doctors and nurses — forgiveness of their remaining federal student loans in return for a decade of full-time service.

Approximately 612,000 borrowers have signed up for the loan forgiveness program and submitted at least one approved certification, according to data from the Education Department.  However, many of the borrowers are concerned about how many of their monthly payments will be counted — or even if the certification itself will be revoked.

The Education Department said that the approval notices the company sends to borrowers seeking certification are not binding and can be rescinded by the department at any time. Four of those borrowers whose approvals were withdrawn are in continuing litigation with the department.  The Education Department says their student loan debt forgiveness was in error.

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.

The Costs of Deferring Your Student Loans

August 17, 2017 Posted by kingcade

Many Americans are struggling to pay back their student loans.  According to a recent study, 30 percent of direct loans are in deferment.  When a borrower defers a student loan, temporarily suspending repayment due to unemployment or other financial hardship- the interest on the loan continues to accrue.  If no payments are made during the deferment period, the interest will capitalize and be added to the total amount of the loan.

Interest rates are expected to rise in 2018.  Undergrads will pay 4.45 percent on loans distributed from July 1, 2017 to June 30, 2018, which is up from 3.76 last year. There are limited time frames for how long a loan can be in deferment.  Deferring your student loans can also eliminate your eligibility for certain public forgiveness programs.

Deferring your student loans can be costly.  Here are some alternatives:

  • Utilize income-driven repayment plans offered by your lender;
  • Refinance your student loans;
  • See if your employer offers loan assistance to employees;
  • Forbearance, which suspends student loan payments is typically at the loan holder’s discretion. These specific qualifications are detailed on the government’s Federal Student Aid

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.