Student Loans Archives - Page 28 of 31

Bankruptcy Law, Credit, Student Loans, Timothy Kingcade Posts

Student Debt in America: Extend with a Smile, Collect with a Fist

Posted on December 4, 2015by Admin

The student loan debt crisis is nothing new, but the interest accruing on these loans represents a new threat. Of the 43.3 million borrowers with outstanding federal student loans, 1.8 percent, or 779,000 people, owes $150,000 or more. And 346,000 owe more than $200,000. A Missouri high school teacher and mother of four owes the federal government a staggering $410,000! She took out loans for her undergraduate education, but also for law school, which she was unable to complete after becoming ill with a life-threatening autoimmune disease that required a lengthy hospitalization. Today, the interest has accumulated to twice the original principal. The monthly loan payments of $2,750 will stretch for 30 years.

With her forbearance options exhausted, the loan servicer has threatened to “come after her,” garnishing her wages and eventually her social security. This woman’s story reveals the deep contradictions in the federal government’s approach to student loans. People have always struggled with debt and access to capital is what fuels the modern economy. Borrowing for college is often seen as a good idea because it represents an investment in a person’s future potential. However, borrowing is risky and people often do a poor job- particularly young people- of properly weighing the interests of their present and future selves.

The private enterprise system is built to limit over-borrowing by sharing risk between lenders and borrowers. Lenders examine credit and income histories and ask for collateral that can be repossessed in case of default. Because most loans can be discharged in bankruptcy, lenders share on the cost of default. But federal student loans do not work that way. “No Cash? No Credit? No Problem!” is essentially the Department of Education’s policy on student loans.

The number of active borrowers enrolled in college has declined roughly nine million today from about 12 million in 2010, according to the Federal Reserve Bank of New York. But the total amount of outstanding student loan debt continues to increase, because many borrowers are struggling to pay back their older 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, 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.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Debt- Not just a burden to the student

Posted on December 3, 2015by Admin

Ninety-four percent of parents of college students are increasingly feeling the burden of student loan debt, according to a 2014 survey by Citizens Financial Group. More than half of those parents are worried that the cost of college will impact their ability to retire. Parents who cosign on their child’s student loan debt assume equal responsibility for repaying the loan. That means any late payments not only hurt the child’s credit, but the parents as well.

The problem is wide-reaching, but the middle class seems to have been hit the hardest. In many instances, the debt is held by private lenders because federal loans have been maxed out. Those taking out the loans oftentimes do not qualify for need-based aid since their parents make “too much” money.

Parents who are shouldering the burden of student loan debt are encouraged to look for ways to improve their cash flow by reducing monthly expenses like cable bills, refinancing mortgages to lower interest rates and shopping around for the best insurance coverage.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Debt Collectors can now Robcall to Collect Student Loans

Posted on December 2, 2015by Admin

If you are currently in default on your student loans, you may begin receiving continuous calls from collectors to pay up. A budget agreement, which is awaiting President Obama’s signature, contains a provision that allows the government to collect federal debts using automated calling systems to mobile phones.

Not surprisingly, Navient (formerly Sallie Mae) and Nelnet, two companies that service federal loans, have been strongly advocating for this. They both argue that debtors who receive robocalls are more likely to repay their debts. Currently, loan servicers are allowed to robocall people only after they have consented to being auto-dialed and who have verified their cell phone numbers. (Only about a third of customers fall into both of those two categories.)

In an interestingly twist, the bill puts the Federal Communications Commission (FCC) in charge of implementing the robocalls- an organization that has been fighting against automated calls to cell phones recently. Just last week, the FCC started publishing reports on consumer complaints about cell phone robocalls to give software developers tools to build apps that will block them.

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

What happens to your debts when you die?

Posted on December 1, 2015by Admin

Your debts become the responsibility of your estate. When you pass away, any debts you leave behind could take from the assets you had hoped to leave your loved ones. In some cases, family members can even be responsible for your debts. This is the reason many people purchase life insurance- not only to leave their loved ones something when they pass, but also to take care of any outstanding debt and final expenses.

Mortgages and home-equity loans

If the property has a mortgage, the lender does have some protection, at least up to the value of the property. However, federal law states that lenders cannot force the joint owner to pay off the mortgage immediately after the co-owner dies. This also applies to any relative who inherits the home and lives in it. This means the family member or co-owner can simply take over the monthly mortgage payments. If there is an outstanding home-equity loan, a lender can force the person who inherits the home to repay the loan immediately, which could result in the home being sold.

Auto loans

If the vehicle is not paid in full, the lender has the right to repossess the car. But typically, whoever inherits the car can just take over the payments. It is unlikely the lender will take action.

Credit cards

When the estate runs out of assets, the credit card companies are out of luck. This is due to the fact that credit card debt is not secured by assets the way mortgages and car loans are. Any joint account holder would be responsible for the bill, but people who are simply authorized users of the card would not be.

Student loans

Lenders do not have any recourse if the estate does not have assets to repay other unsecured obligations, like student loans. Even if your relatives are not responsible for your debts, collection companies can still legally call to discuss the debts to find someone who is authorized to pay them, according to the FTC. It is important to know, debt collectors cannot mislead family members into thinking they are responsible for the debts.

Caveats

These are the circumstances in which spouses or other people would be responsible for your debts. These include:

They co-signed on a loan;
Are joint account holders;
Are spouses in community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

What is protected?

Creditors typically cannot go after your retirement accounts or life insurance proceeds. However, if the life insurance beneficiaries you named are no longer living, your death benefit may go into your estate and then be subject to creditors. That is one reason why it is important to make sure your policy names the proper beneficiaries.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, 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 atwww.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Law School Grad Tries to Discharge Student Loan Debt in Bankruptcy

Posted on November 26, 2015by Admin

A recent law school graduate with close to $300,000 in student loan debt is asking for the U.S. Supreme Court’s help in getting it discharged in bankruptcy. Courts including the U.S. Courts of Appeals for the Seventh and Eighth circuits are split on what constitutes “undue hardship,” the determining factor as to whether a debtor is eligible for a bankruptcy discharge. The U.S. Court of Appeals for the First Circuit is also on the fence with the issue.

Law school debt has been getting more attention recently. Lawmakers on both sides have “sharply criticized U.S. law schools” for burdening students with crushing debt and non-marketable degrees, according to Bloomberg Business.

This particular student’s alma mater – Florida Coastal School of Law in Jacksonville, FL – has received some negative press about its graduates’ debt. Those in the 2015 graduating class that had debt (93 percent) carried a balance of almost $163,000. In addition, the median Law School Admission Test (LSAT) score for Florida Coastal students was in the bottom 25%.

This student has failed the bar exam for the third time and is living at home with his parents below the poverty line. According to the debtor’s petition, he has struggled with depression and misdemeanor convictions, which make it difficult to find work in the legal field.

It is extremely difficult to prove undue hardship in the Seventh Circuit, without the presence of a serious medical condition, like Alzheimer’s disease or being paralyzed in a car accident. The bankruptcy laws are supposed to be uniform, but there is a split on what the courts consider undue hardship.

The Eight Circuit uses a “totality of the circumstances test,” which is a more flexible standard. It allows bankruptcy courts to consider a variety of factors when determining undue hardship. As a result, if a debtor lives in Arkansas – in the Eight Circuit – like in this case, there is a good chance the high court will grant the certiorari.

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Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

‘Doctors’ Loophole’ in Student Loan Debt-Forgiveness Helps more Americans than Intended

Posted on November 24, 2015by Admin

The federal government is getting ready to forgive billions of dollars in student loan debt for doctors and other professionals with expensive educations, under a law designed to help “modestly paid” workers in public service.

At issue is the 2007 student loan forgiveness program that allows borrowers who have made a decade of payments and work for government or nonprofit entities, have the rest of their debt forgiven. The program was designed to encourage young Americans to pursue traditionally hard-to-fill positions, such as: public defenders, social workers, teachers and modestly paid doctors in underprivileged areas.

However, the program is helping far more than intended, many of the borrowers being well-paid. Thousands of workers with expensive graduate degrees are set to discharge five- and six-figure student debt amounts as they approach typically lucrative careers.

The biggest beneficiaries will be med school students, who owe an average of $180,000 upon graduation and are increasingly working for nonprofit hospitals to qualify for the program. What is being called the “doctor’s loophole,” financial advisors estimate that many will have 80% or more of their original balances forgiven.

The government will not start forgiving loans under the program until 2017, a decade after it was signed into law. But the estimated tab is growing quickly as enrollment surges. As of September, about 295,000 borrowers in all fields had submitted paperwork and were on track to have debt forgiven under the program, according to the Education Department. That is an increase of 368% from two years prior, likely reflecting growing awareness of the program and a boom in higher-education attainment during the recession. The agency projects a total 600,000 borrowers will have loans forgiven over the next decade.

Supporters of the program note it is achieving the goal of increasing interest in jobs that are tough to fill, like public defender positions. A surge has been reported in applications for legal positions, partly linked to lawyers hoping to shed their law school debt.

The typical borrower in the program owes between $60,000 and $70,000 in student debt, with 1 in 4 owing more than $100,000, according to a Government Accountability Office report. This suggests most enrollees are workers with postgraduate degrees. Critics say the program does little to help the millions of Americans who truly need the relief from student loan debt, like those borrowers who did not complete college and have much smaller loan balances or who graduated with degrees that pay far less in today’s economy.

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Bankruptcy Law, Student Loans, Timothy Kingcade Posts

More Lawsuits being filed over Student Loans

Posted on November 20, 2015by Admin

Lenders are taking more extreme measures when it comes to collecting student loan payments- they are taking borrowers to court for the money. It used to be that if you fell behind on your student loan payments you would receive collection calls and threatening letters, now borrowers are being sued.

The number of lawsuits filed over delinquent student loans has significantly increased in the past two years. The lawsuits come as the student loan industry finds itself under heightened government scrutiny over complaints involving paperwork errors and deceptive collection practices.

Why the increase in these lawsuits? One explanation is that many lenders are now able to sue because bankruptcy cases filed by borrowers around the recession have been resolved. Another reason is the sheer amount of money at stake- billions of dollars in delinquent loans. Another possible reason for the rise in lawsuits: Loan companies are more efficient at producing the thorough documentation some judges are now demanding.

Litigation has become a more accepted (and effective) collection practice. Lenders typically go to court to try and garnish the borrower’s wages or force the person to make a certain payment every month. Student loans backed by the federal government come with rules that allow the lender to take such action without going to court, while holders of private loans must get a judge to sign off on such steps.

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 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, 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.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Debt Crisis: Worse than we thought

Posted on November 6, 2015by Admin

After a series of hearings held 25 years ago on abuses in the higher education system, Congress created laws to protect undergraduates from risky student loans. The original investigation was held in the early 1990’s and revealed widespread fraud among for-profit colleges. Some trade schools had reportedly gone so far as to recruit people from welfare lines to sign up for student loans without their consent. In the end, the loans were never repaid and the colleges kept the money.

In response, Congress created a rule called the cohort default rate, which requires the Dept. of Education to calculate the percentage of borrowers who have recently left a given college and defaulted on their federal student loans. If the default rate is too high, the college is kicked out of the federal financial aid system.

However, two weeks ago the Education Department released new data suggesting the system has failed borrowers, and at some colleges, students are still being strapped with loans they will never be able to repay.

The loan crisis hits hardest at colleges enrolling large numbers of students from low-income backgrounds. These students oftentimes have to borrow all of the expenses needed to attend college and have trouble securing a job upon graduation- if they even graduate. The colleges reported to have the lowest student loan repayment rates include many for-profit colleges and a number of historically black colleges.

Research has found that student loan defaults are heavily concentrated among the “most economically marginalized students;” the new data suggests that debt is a major financial obstacle for people who already face barriers to opportunity. In light of the new data, hopefully Congress will revisit its system for ensuring that students who take on debt have a chance of actually paying it back.

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 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, 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.

Bankruptcy Law, Debt Relief, Student Loans

How the Government Polices what Student Debtors Spend

Posted on November 4, 2015by Admin

A social worker at Sacramento County’s department of children’s protective services who filed for bankruptcy, asked the court to forgive the $137,000 she owed in student loans because paying them, she said, would make it impossible to provide for her five family members, which include her elderly mother, disabled husband, and three children.

According to lawyers for the Department of Education, her $700-per-month food budget was too high and “she cannot purposely choose to live a lifestyle that prevents her from repaying her student loans.”

The government’s scrutiny of her cash flow is not surprising. For more than a decade, the Education Department has closely examined debtors’ basic expenses in its fight to prevent student borrowers from discharging their student loans in bankruptcy- often disqualifying those who need it the most.

In some bankruptcy proceedings, courts will consider how much someone is spending, to determine how much they can reasonably pay back to their creditors in the future. However, when it comes to student loan debt, the government has additional leverage. The Education Department can deny people bankruptcy altogether if its lawyers can show that debtors are spending too much on basic items like fast food, cable television, or even their pension plans.

Government lawyers are given license to do such meticulous accounting because of a provision in the bankruptcy code. Congress passed rules in the 1970s making it nearly impossible to get rid of student loan debt in bankruptcy unless they can prove “undue hardship,” without defining the term. Instead, it is left to the courts to interpret the law. Most courts require debtors prove they cannot maintain a “minimal” standard of living while paying the debt back. Lawyers for the Education Department generally view any sign of excessive spending as an argument that debtors don’t qualify.

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 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, 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.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Read these 4 Tips before you start making your Student Loan Payments

Posted on November 2, 2015by Admin

Recent college graduates are in for a rude awakening. The grace period extended to them upon graduation is about to expire- meaning those students who took out student loans will have to start paying up. Here are some tips you should know before making your first payment.

Depending on your financial situation after graduation, you may want to opt for a repayment plan that fits your circumstance. If you find yourself unable to make the minimum monthly payments on your loan- you have options. You can opt for income-based repayments (your maximum payment will be 15% of your discretionary income), an extended repayment plan (stretches your payment period out past the 10-year standard) or an income-sensitive repayment plan (your monthly payment is based on your annual income. Payments change as your income changes).
Know when you will have to start making payments. In most cases, student loan payments become due six months after graduation. However with some loans, like the federal Direct PLUS loans, payment becomes due the day after the final disbursement is made and private student student loans can have varying grace periods. Knowing when you need to start making those payments will help you get a head start on saving and get the repayment process off on the right foot.
The consequences of late or missed payments. Failing to make timely payments on your student loans will hurt your credit score. If you have trouble remembering due dates or simply have too many bills to keep track of, it may be a good idea to set your student loan payments up on auto pay. Adjust your budget accordingly to account for the monthly deduction.
Set a realistic budget. Tracking expenses and weighing them against your current income will determine how much you will be able to comfortably put towards an apartment, new car, groceries, eating out, and other expenditures. A well-constructed budget could mean the difference between paying off your loans in 10 years, instead of 20.

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 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, 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.