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Bankruptcy Court Discharges $200,000 in Private Student Loan Debt for Colorado Couple

Posted on September 15, 2020by Admin

A major victory was scored for student loan borrowers after a U.S. Court of Appeals for the Tenth Circuit issued a ruling stating that a Colorado couple’s private student loan debt could be discharged in their personal bankruptcy case. The ruling allowed $200,000 of private student loan debt to be wiped out, breaking the long-standing stigma that student loan debt, particularly private student loan debt, is near impossible to discharge in a bankruptcy case.

The Colorado couple had taken out $200,000 in private student loans from Navient, one of the nation’s largest student loan issuers. The ruling comes after a similar bankruptcy case, where the borrower also had their student loan debt discharged. In that case, the loan servicer appealed the ruling.

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

Student Loans ‘Designed to Fail’: States Say Navient Preyed on Students

Posted on April 12, 2017by Admin

Navient, a student loan lender that split off from Sallie Mae in 2014, retained nearly all of the company’s loan portfolio. In recent months, Navient has come under fire for aggressive and sloppy loan collection practices, leading the government to file multiple lawsuits against the student loan giant in January.

However, those accusations have overshadowed broader claims made against the lender. Two separate states, Illinois and Washington, have filed lawsuits against Sallie Mae claiming that it engaged in predatory lending, extending billions of dollars in private loans to students.

“These loans were designed to fail,” said Shannon Smith, chief of the consumer protection division at the Washington State attorney general’s office.

New details emerged last month in the lawsuits against Navient that shed light on how Sallie Mae used private subprime loans, some of which it expected to default at rates as high as 92 percent, as a tool to build its business relationships with colleges and universities across the company.

The risky loans were detrimental for students, however; they were beneficial for Sallie Mae. The private loans were a “baited hook” as Sallie Mae described it. The lender used the private loans to reel in more federally guaranteed loans, according to the lawsuit.

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

Government Sues America’s Largest Student Loan Company

Posted on January 20, 2017by Admin

The Washington state Attorney General filed a lawsuit against student loan company, Navient on Wednesday. Navient is formerly part of the private student loan company, Sallie Mae. In a separate lawsuit, Illinois Attorneys General named both Navient and Sallie Mae.

According to Richard Cordray, the director of the Consumer Financial Protection Bureau (CFPB), “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”

Navient separated from Sallie Mae in 2014 and is currently the largest student loan servicer in the country. The company reportedly handles more than 12 million student loan accounts. Approximately half of the borrowers have federal loans and the other half are private. According to the CFPB, one in four student loan borrowers have Navient as their servicer.

The CFPB’s allegations claim that Navient steered struggling borrowers toward paying more than they had to, and misallocated borrowers’ payments when they were made across multiple loans. It also alleges that in some cases, Navient erroneously reported borrowers had defaulted on their loans, damaging their credit score.

In the lawsuit, the government claims that Navient also made it more difficult for borrowers to enroll in an income-driven repayment plan, which can be used to lower their monthly payment if they’re struggling to make payments.

Click here to read more on this story.

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

Rapper Releases Hit Song About Paying Back Student Loans

Posted on March 3, 2016by Admin

New Orleans-based rapper, David Augustine Jr., or Dee-1, went viral with his hit song “Sallie Mae Back,” an ode to the struggle of paying back student loan debt. Augustine, a former middle school math teacher, landed a record deal in 2013 with RCA Inspiration and has since paid off his student loan debt in full.

The teacher-turned-rapper attended Louisiana State University and although he was awarded scholarships, they only covered about half of his tuition, room and board. He took out student loans to cover the rest of his education costs.

After landing his record deal and receiving an advance on his album, Augustine said it was obvious how he should spend the money. “I was like, how should I spend this? Most rappers buy a new car; they go ball out; they take a vacation; they go buy new jewelry, with this advance, I wanted to break the stereotypes of how people normally spend them – and get out of debt,” Augustine said.

After knowing the financial stresses that come with student loan debt, Augustine turned his relatable experience into his song’s subject. He released a video for the song “Sallie Mae Back,” on February 11^th that has since gone viral and turned into an anthem for recent grads struggling to pay back their student loan debt. The video has been viewed more than five million times on social media.

The songs lyrics tell the story that millions of college students can relate to:

“Needed tuition

Needed room and board

Had to pay for books so I took out loans to feed the boy

Graduated wasn’t making quite enough to pay em back

Went in default messed my credit up

Check my Equifax

I ain’t proud of that

I’m more proud that I drown in that

I got two jobs really got on my grind

No time to whine I can’t ride the pine

In the game right now my time to shine

Started paying them loans back one at a time

Got them down down down

Down down down down down till I paid them all off”

Augustine has also been following the topic of student loans along the presidential campaign trail. He said, “It is ear candy to my generation to hear ‘let’s make college free.’ That’s easy.”

Related Resources:

http://www.cnn.com/2016/02/24/living/sallie-mae-back-dee1-video-viral-

http://www.forbes.com/sites/tomanderson/2016/02/24/meet-the-rapper-who-made-paying-back-student-loans-a-viral-hit/#509f3580b8cb

http://time.com/money/4236509/sallie-mae-dee-1-rap-student-loans/

Bankruptcy Law, Credit, Timothy Kingcade Posts

Sallie Mae Faces Nearly $200 Million in Penalties for Cheating Active Duty Troops

Posted on May 14, 2014by Admin

Sallie Mae and its former loan unit, Navient have struck a deal with federal authorities to resolve allegations that it cheated active duty troops and other borrowers who were being charged late fees.

According to the Consumer Financial Protection Bureau (CFPB), service members have complained that companies such as Sallie Mae and Navient have told them they could not receive protections under the law unless their loans were in forbearance or deferment.

Sallie Mae and Navient more than doubled to $173 million- the amount they have set aside to cover settlements resolving these allegations brought by the Federal Deposit Insurance Corp. (FDIC) and the Dept. of Justice. Navient has acknowledged the federal government’s investigation into allegations the company cheated active-duty troops in violation of the Service Members Civil Relief Act from November 28, 2005 to present day.

Under the Service Members Civil Relief Act, loan companies must reduce the interest rate on student loans to no more than 6 percent upon request by active duty troops. As of 2008, the law extended beyond private student loans to include federal student loans.

In addition, troops have told the CFPB that their servicers wrongly told them the 6 percent interest-rate cap expired annually, and they were required to submit additional paperwork to retain it. Others were discouraged from applying for the protections contained in the service members’ law, while some were mistakenly told that the benefits are only available to those in combat zones.

Furthermore, some service members told the CFPB that they were told to provide end dates for their tours on active duty, a requirement that is virtually impossible to meet, since officers in the armed forces are usually not told when their tours will end.

Rohit Chopra, the consumer bureau’s top student loan expert, told the Senate “that companies that fail to comply with the service members’ law may be cheating borrowers in other ways.”

A settlement resolving the service members’ allegations would need to be approved by the Education Department and require the companies to establish a $60 million fund to compensate troops for violating the service members’ law when it comes to 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 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, Credit, Timothy Kingcade Posts

Student Loan Borrowers Face Payment Processing Pitfalls

Posted on November 1, 2013by Admin

A new report from the Consumer Financial Protection Bureau (CFPB) reveals that the companies hired by lenders to collect payment for private student loans are not always acting in the borrowers’ best interest. In fact, sometimes their actions increase the total cost of higher education. The most common complaint deals with the problem encountered when borrowers try to pay off their loans early or pay them off in a certain order.

Oftentimes, it makes the most sense to pay off the student loan with the highest interest rate first, but the CFPB report found that loan servicers do not always do that. Instead, they frequently divide the payment or over-payment and apply it to all of the person’s outstanding loans. According to the report, these “payment processing pitfalls” can lead to increased costs, extended periods of repayment and harm the borrower’s credit profile.

The CFPB also found problems for borrowers who had multiple loans with the same servicer and were unable to make their monthly payment in full. They were oftentimes told by the loan servicer to pay as much as they could. But instead of putting all of the money toward the highest-rate loans, the loan servicer applied it evenly to all of the loans. This practice maximizes late fees and can intensify the negative impact of a single late payment to the borrower’s credit profile.

Another problem encountered by borrowers was when their loans were transferred to another service provider. These complaints included lost paperwork, processing errors that resulted in late fees and an interruption in billing statements. More than 3,800 complaints about private student loans were received between October 1, 2013 and September 30, 2013. 49 percent of these complaints were with Sallie Mae.

If you are having trouble making your student loan payments or you have recently defaulted on your federal or private student loans, contact an experienced Miami bankruptcy attorney. Although student loans are often not dischargeable in bankruptcy court, an attorney can help you eliminate other debts and obligations so you can take control of your finances and better handle your student loan debt.

Credit, Foreclosures, Timothy Kingcade Posts

Bank Of America Settles with Fannie Mae For $11.6 Billion

Posted on January 9, 2013by Admin

Bank of America recently announced legal settlements exceeding $14 billion for its participation in fraudulent foreclosure processes and bad mortgages sold to its investors. BOA recently settled with federally backed mortgage giant, Fannie Mae, for $11.6 billion for selling bad mortgages to the company. BOA also agreed to stop collecting payments on $306 billion worth of mortgage loans to Nationstar Mortgage Holdings and Walter Investment Management Corp. Approximately $3 billion from the settlement were part of a deal between mortgage lenders and regulators to end a review of foreclosures mandated by the government. Experts say that the Bank’s agreement to the recent settlements is a step in the right direction.

Analysts estimate the lender’s settlements have amounted to $40 billion in mortgage-related settlements this past year. However, BOA is far from finished with legal troubles from its part in the real-estate crisis. The agreement does not settle the lawsuit brought forth by the U.S. Justice Department last year for bad loans sold to Fannie Mae and Freddie Mac. Also, Bank of America is still awaiting the court’s approval to settle for $8.5 billion with private investors.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.