Tag: student loan bankruptcy

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

Potential Changes in Bankrupt Borrowers’ Ability to Discharge Student Loan Debt

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Prior to 1998, student loan debt (federal and private loans) were dischargeable in bankruptcy, but federal legislation enacted that same year removed the ability to do so—except in extreme circumstances, those that qualify under the “undue hardship” standard. Since the test is not regulated by any law, the courts must determine the severity of the debtor’s circumstances to qualify them for relief.

The three-pronged test to determine undue hardship:

  • You must prove that you are unable to maintain a minimal standard of living, while repaying the debt;
  • You must prove that your current destitute circumstances will last for a long time;
  • You must show that you have made “good-faith efforts” to repay your loan in the past.

Last week, the Education Dept. announced that it would seek public comment on how to determine whether borrowers have met the undue hardship standard to have their student loan debt forgiven in bankruptcy. Several Democrats, including Sen. Elizabeth A. Warren, Democrat of Massachusetts, have introduced legislation that would allow student loans to be discharged via bankruptcy.

There are ways to file for bankruptcy with student loan debt. Congress has yet to established what “undue hardship” means with regard to students’ having their loans forgiven in bankruptcy; still, courts have set legal standards for proving it.

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 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.

Student Loans, Timothy Kingcade Posts

Is refinancing your student loan debt a good idea?

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Well, it depends.  It depends on the terms of the loan.  With so many Americans struggling to pay back their student loans, refinancing can seem appealing, but it also has risks. Student loan debt surpassed $1.3 trillion in the United States in 2017 – and nearly 3,000 loans go into default every day, according to federal regulators.

Refinancing can look like an attractive option, offering borrowers a way to lower their monthly payments.  But essentially what it does is sell the debt to another lender under new terms.  Oftentimes, that comes at the expense of a longer lifetime of the loan.

Carefully examine the terms, because extending the terms of the loan could cost you significantly more money in the long run.  It is important to check the following before considering refinancing your student loan debt:

  • The length and interest rate of the loan;
  • Whether the interest rate is variable or fixed (Fixed is best right now, because rates are low);
  • Check for up-front origination fees;
  • Compare refinancing offers and read the contract carefully;
  • Always check if you are eligible for income based repayment plans, before you consider refinancing options.

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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 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.

 

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

5 Companies that will help you pay off your Student Loan Debt

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A recent survey conducted by IonTuition found that 80 percent of workers would work for a company that provided assistance with their student loan payments; which makes sense given that 44 million Americans are struggling with student loan debt.  Here are five companies that are helping their employees pay off their student loan debt.

Aetna. The healthcare company offers full-time and part-time employees tuition reimbursements on student loan repayment. Their student loan repayment program matches part-time employee student loan payments up to $1,000 per year with a lifetime maximum of $5,000. For full-time employees, Aetna matches student loan payments up to $2,000 per year with a lifetime maximum of $10,000.

Chegg. The textbook rental and online tutoring company gives eligible employees $1,000 a year as part of their student loan repayment benefit.

Fidelity Investments. Not only does this company offer tuition reimbursement for work-related educational expenses, it offers up to $10,000 ($2,000 a year contribution) paid directly to your student loan servicer.

Penguin Random House. The publishing company offers up to $9,000 through their student loan repayment benefit (up to $1,200 a year).

PwC. The accounting firm provides associates up to $10,000 in total (up to $1,200 a year) through their company’s student loan repayment benefit.

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 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.

Related Resources:

https://www.cnbc.com/2017/12/22/5-companies-that-will-help-you-pay-off-your-student-debt.html

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

Wells Fargo Faces Penalties over Ignoring Student Loan Debt Included in Bankruptcy

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An important legal victory was recently obtained for a borrower attempting to discharge a student loan debt.  Ryan, the consumer, filed for bankruptcy and following the bankruptcy Wells Fargo Bank sued Ryan and obtained a state court judgment to collect on the debt.

Ryan had attended Capella University, a for-profit school.  In the case, Educational Financial Services, a division of Wells Fargo Bank, made the argument the loan was not actually discharged in the 2007 bankruptcy.  When Wells Fargo sued Ryan in State Court to collect on the student loan debt they made no mention of Ryan’s previous bankruptcy and discharge.

Ryan felt pressured to enter a consent judgment over the debt in 2008 and made monthly payments of $150 on the loan for the next seven years.  Frustrated, he sought legal help to reopen his previous bankruptcy case and his attorney raised the valid point, “that the loans from Wells Fargo were discharged by operation of law on November 29, 2007, because the loans were not a student debt protected by any subsection of Section 523(a)(8).”

The issue at hand was if Ryan’s discharge had been violated because the loans were not student loans under Section 523(a)(8).

“Given Wells Fargo’s actual and constructive knowledge of the timing of the Plaintiff’s loans, the “cost of attendance” at Capella University, and the nature of the Loans it extended to the Plaintiff, Wells Fargo knew or should have known that the Loans were discharged in the Plaintiff’s bankruptcy,” the complaint states.

The Judge ruled that even though Ryan had previously repaid the debt through the State Court judgment he was not prevented from reopening his bankruptcy and filing an adversary proceeding to rule on the discharge of his non-protected private student loan debt.

This is why it is important for anyone who includes student loans in a bankruptcy to pursue an adversary proceeding to get a ruling on the dischargeability of the loans, a key step which is often overlooked.

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.