Credit Card Debt, Debt Relief, student loan debt, Timothy Kingcade Posts

The Effects Student Loan Debt and Credit Card Debt have on U.S. Economic Growth

The fact that many Americans are struggling to pay their student loans and credit card debt is not just effecting the individuals carrying the debt. It is taking a toll on the economy, as well. In fact, these two growing categories of debt are reportedly weighing down U.S. economic growth.

Credit card balances are at an all-time high at $868 billion in the second quarter, which is up from $848 billion reported in the previous three months, according to the Federal Reserve Bank of New York. Consumer debt is also climbing, hitting an all-time high of $13.86 trillion in the second financial quarter. When compared with the previous high of $12.68 trillion just before the 2008 recession, financial experts have expressed concern as to what this could mean for the country’s financial well-being.

Debt Relief, student loan debt, Student Loans, Timothy Kingcade Posts

Student Loan Debt Relief Scams to Watch Out For

Student loan debt is an issue for many Americans, and for a great number of them, the situation has become a desperate one. This fact could be why so many borrowers are falling prey to student loan debt relief scams.

It is estimated that the national total student loan debt is well over $1.5 trillion. The average student loan borrower in 2018 is carrying just shy of $30,000 in loan debt, according to Student Loan Hero. This figure only represents what the average undergraduate student owes. For a graduate or professional degree, the borrower may end up with student loan debt well into six figures. With this much debt, borrowers can be paying on their loans for decades, which is why many of them jump at the opportunity, when presented, to get some sort of relief on their debt.  The problem is these “relief opportunities” end up being more trouble than they are worth.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

How to Discharge Student Loan Debt in Bankruptcy

When it comes to discharging debts in a bankruptcy case, student loan debt has traditionally been one of the most difficult debts to discharge. The fact that this debt can be so difficult to get rid of in a bankruptcy case has kept some consumers from filing for bankruptcy. The problem is it can be very difficult for a person who is in a financially tight situation to keep paying on this debt outside of bankruptcy.  Student loan debt is oftentimes the largest debt a consumer carries, outside of their mortgage.  If someone goes through bankruptcy only to continue being stuck with his or her student loan debt, that person may end up in the same financial situation, again.

Here is how to  discharge student loan debt in bankruptcy.

Undue Hardship

Student loan debt can be discharged if the borrower can demonstrate that he or she would suffer an undue hardship if forced to pay back his or her student loans. However, bankruptcy courts do not have one set standard to guide them in determining what exactly qualifies as an undue hardship. The U.S. Bankruptcy Code does not give a clear definition for what undue hardship is, which could be why so many inconsistencies exist among bankruptcy courts. Some courts will only use the undue hardship test to grant full discharge of the loans while others will allow for partial discharge. Others view the test as an extremely difficult standard to meet while others may be more lenient. At the end of the day, if the borrower has a very low income or took the student loan out to attend a for-profit trade school, he or she may have a better chance to get the obligation discharged, although other factors will be considered, as well.

Uncategorized

More Baby Boomers Filing for Bankruptcy, up 300% in Recent Years

More baby boomers are filing for bankruptcy than in previous generations, according to recent reports. Consumers over the age of 65 are reporting more debt now than ever before, and as a result, more of these individuals are filing for bankruptcy as a means of getting out from under this debt burden.

According to figures from the Consumer Bankruptcy Project, the number of people over the age of 65 who have filed for bankruptcy has tripled since 1991. The study looked at 895 personal bankruptcy cases involving filers ranging in age from 19 to 92. What they found was more older Americans are filing for bankruptcy as a way to seek protection from creditors and protect their assets. In fact, the number of filers in this age group has increased anywhere between 200 and 300 percent since 1991.

Bankruptcy Law, Debt Relief

Trump Administration Delays Consumer Protections for Abusive Payday and Car-Title Lenders

New consumer protections against abusive lending practices have been placed on hold by the Trump Administration for another 15 months. The protections that were enacted in 2017 were set to take effect this week are now being delayed, perhaps indefinitely.  The reasoning behind the delay of this consumer safeguard: ‘It’s too troublesome for lenders.’

The delay is being viewed as just another example of the current administration stripping away consumer-friendly policies enacted under the Obama administration.

Bankruptcy Law, Credit Card Debt, Debt Relief

Bankruptcy Filings on the Rise Across the Country

The number of bankruptcy filings are on the rise across the country, signaling that Americans are struggling to keep up with their debt.  The majority of the bankruptcy filings are in larger cities, where personal incomes are oftentimes not enough to pay household bills and daily living expenses.

According to the American Bankruptcy Institute (ABI), U.S. bankruptcy filings jumped by three percent in July 2019 from July 2018. A total of 64,283 filings were reported for July 2019, which is up from the 62,241 reported in July 2018. If this trend continues, the number of bankruptcies filed this year is anticipated to hit 796,000, which is more than the 777,000 reported last year.

Debt Relief, student loan debt

Loan Forgiveness Applications Stall at the U.S. Department of Education

Student Loan Forgiveness

More than 180,000 applications remain pending in the hands of the U.S. Dept of Education, leaving borrowers with little to no answers when it comes to their student loan forgiveness. This lack of progress has many borrowers feel that their chances of receiving any type of relief for their student loan debt is slipping away.

Last year, a federal judge ruled that the Department of Education’s delays in processing student loan forgiveness applications from borrowers who were defrauded through for-profit school lending schemes was illegal and in direct violation of federal law. The ruling supported claims that the Department was purposely ignoring borrowers seeking promised relief from their debt.

Bankruptcy Law, Credit Card Debt, Debt Relief

How to Stop Harassment for Debts You Do Not Owe

Debt collectors will do just about anything to get a consumer to pay on a debt, their job depends on it.  This can even include the collection of old debts that are past the statute of limitations. According to recent figures from the Consumer Financial Protection Bureau (CFPB), in conjunction with a complaint database through consumer advocacy group, U.S. PIRG Education Fund, 44 percent of all complaints against debt collectors have to do with attempts to collect on a debt that is not even owed by the person receiving the call.

The problem is many consumers are not aware that they do not owe on the debt, and they are not fully aware of their legal rights when it comes to debt collections. Under the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors are limited in how many times a day they can call consumers, as well as the type of communication and language they may use while collecting on the debt. If the communication constitutes harassment, the consumer has the right to ask the debt collector to stop contacting him or her, and file a lawsuit against the collection agency.

Foreclosures

Reverse Mortgages: Thousands of Florida Homeowners at Risk of Foreclosure

Thousands of Florida seniors are facing foreclosure, even homelessness due to being stuck in reverse mortgages now going into foreclosure. According to the U.S. Department of Housing and Urban Development (HUD), nearly 15,000 Florida seniors out of the 85,000 currently holding reverse mortgages are at risk of losing their homes.

A reverse mortgage is also often referred to as a home-equity conversion mortgage. Reverse mortgage lenders normally target individuals over the age of 62 who are living in homes with larger amounts of equity. The reverse mortgage allows the homeowner to borrow against the equity in his or her home. Instead of monthly mortgage payments, the balance only becomes due when the borrower dies, moves away from the home permanently or sells the home.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How Debt Collectors Trick Consumers into Reviving Old Debts

Creditors can be extremely creative when attempting to collect on a debt. Many of them rely on the fact that most consumers do not truly understand the laws surrounding debt collection. The average consumer may not know creditors only have so long to collect on a debt under the state’s statute of limitations. After that time has passed, the creditor or debt collector is barred from taking legal action to collect on the debt.  But that does not mean they can’t stop trying to collect on it.

The problem is many debt collectors will still attempt to get payment on the debt, even after it is past the legal statute of limitations. This practice is often referred to as “zombie debt collection.” Their hope is that the consumer will pay on the bill, even just a partial amount, reviving the debt, and then giving the debt collector the legal right to sue to collect on the remaining debt.

It is important that consumers be aware of what the statute of limitations is for their given state. In Florida, debt collectors may not collect on a debt that is more than five years past due for written contracts, such as personal loans. For other debts, including those with revolving accounts, such as credit cards, the statute of limitations is four years.