Tag: student loan debt

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, Foreclosures, Student Loans, Timothy Kingcade Posts

Exceptions to Paying Tax on Forgiven Debt

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If you recently had debt forgiven or negotiated down last year, you likely breathed a sigh of relief.  However, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount as income on your tax return, depending on the circumstances. Before you write a check to the IRS, see if you qualify for one of these exceptions to paying tax on forgiven debt.

  • Debts discharged in bankruptcy. If you filed for bankruptcy protection, you do not have to pay tax on the canceled debt.
  • Mortgage debt forgiven due to foreclosure. Originally set to expire after the 2012 tax year, the Mortgage Forgiveness Debt Relief Act protects you from having to pay tax on debt forgiven when you lose your home in foreclosure.  The deadline has been extended several times, most recently in December 2015 to include the calendar years 20017 through 2016.  And in early 2017, a bill to grant another exemption was introduced to Congress.
  • Debts canceled when you were insolvent. This is the most common exception, because debt is generally only cancelled when debtors are “insolvent” (i.e. – completely broke).  This exclusion only applies up to the amount by which you are insolvent.
  • Student loans forgiven after you have worked for a period of time. If your student loans contain a loan forgiveness provision based on service in your profession, do not include the canceled debt as income. In addition, certain federal student loans that were discharged by the U.S. Education Department’s “Defense to Repayment” or “Closed School” discharge process are exempt.  These apply to students at Corinthian Colleges and American Career Institutes Inc.
  • Forgiven interest that would have been deductible. For example, interest on a business debt.  You are not required to pay tax on the portion of the debt due to interest, if you could have deducted the interest if you had paid it.  However, if it was interest on a personal credit card- you must pay taxes on all the forgiven debt, including the interest.
  • Cancellation of debt as a gift. If the cancellation of debt is a gift, it is not income.  Generally, the IRS will believe you if you say the debt payoff was a gift between parties such as family members or friends.
  • Business and farm exceptions. You may not have to pay tax on canceled debt if it was in connection with your farm or if the debts were tied to business real estate and were forgiven when you owed more money than the property was worth.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, 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 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.creditcards.com/credit-card-news/six-exceptions-paying-tax-forgiven-debt-1282.php

https://www.irs.gov/newsroom/home-foreclosure-and-debt-cancellation

Credit, Student Loans, Timothy Kingcade Posts

How To File For Bankruptcy with Student Loan Debt

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For consumers struggling with significant debt, filing for bankruptcy may be your best option to provide you with a fresh start. If your debts consist of federal student loans, it is not an easy process to get these discharged in bankruptcy; however, it is possible.

The first thing you must do is to decide whether you will file for Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, the goal is to get unsecured debt wiped out. This means, you have little disposable income available to pay off your debts. If you choose to file for Chapter 13 bankruptcy, your plan is to get your debts restructured in order to repay some of it. This also means you likely have some disposable income to repay part of your debt.

The most important part of your case when you have student loan debt is that you must prove “undue hardship” to the court. This means that you must prove that you cannot pay back your federal student loans. In order to prove undue hardship, you and your bankruptcy attorney must file a petition called an adversary proceeding, which is unique to bankruptcy involving student loan debt.

In most courts, The Brunner Test is used to evaluate hardship. Below are 3 factors of The Brunner test outlined by the U.S. Department of Education’s Federal Student Aid office:

  • The filer cannot maintain a basic standard of living if paying back federal student loans
  • The filer can prove the hardship will last for a large percentage of the repayment period
  • The filer honestly tried to repay the loans before filing

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.

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.

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

New House Bill Calls for Federal Student Loan Caps, End of Public Service Loan Forgiveness

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A new bill from House Republicans could end Public Service Loan Forgiveness for student loans.  The U.S. House of Representatives will consider proposed changes to the Higher Education Act, including limits on the amount of money students and parents can borrow in government student loan programs, and ending loan forgiveness programs for public interest employees.  Approximately a quarter of jobs in the U.S. economy are considered public interest positions.

The earliest someone could receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) program was October 2017, and not a single person has reported receiving loan forgiveness through the program.

The proposal also suggests changes to student loans’ income-driven repayment plans. Currently, if borrowers make payments of between 10 and 15 percent of their discretionary incomes the remainder of their school loans will be forgiven after 20 or 25 years.

Rep. Virginia Foxx (R-N.C.) and Rep. Brett Guthrie (R-KY) of the House Committee on Education and the Workforce introduced the 542-page legislation known as the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act. The PROSPER Act, if implemented, would have borrowers in income-driven repayment plans “pay 15 percent of discretionary incomes for as long as it took to cover the amount they would have paid under a 10-year standard repayment plan,” according to the Wall Street Journal.

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.

Related Resources:

https://www.forbes.com/sites/zackfriedman/2017/12/06/house-bill-student-loan-forgiveness/#1f25540b7990

 

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

Student Loan Borrowers Awarded $3.75 Million from Citibank

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The Consumer Financial Protection Bureau said in a consent order that Citibank improperly misled borrowers into believing they were ineligible for a tax deduction on interest they paid on certain student loans.  Student loan borrowers who were effected, will share $3.75 million in payments from Citibank for financial practices that forced them to make overpayments, a federal watchdog said this week.

In addition, the bank incorrectly charged late fees and extra interest to borrowers who were still in school and eligible to defer repayments on their student loans.  Citibank also misled borrowers about their monthly bills and failed to disclose required information after the bank denied borrower requests to release loan co-signers.

“Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” Richard Cordray, the consumer bureau’s director, said in a statement issued with the announcement.

Federal law allows student loan borrowers to deduct as much as $2,500 in annual interest they pay on student loan debt. However, Citibank made statements that suggested the borrowers had not paid qualified interest or were ineligible for the deductions.

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.

Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

How the Tax Reform Could Affect those Paying off Student Loans

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As lawmakers consider two different bills that would overhaul the tax code, several changes on the table could affect Americans who are paying student loans. The House version of the bill would eliminate some tax benefits for those with college costs. However, the Senate version of the bill would leave most of them untouched. Both bills would eliminate many tax breaks, however; they would also roughly double the standard deduction.

If you are currently paying off your student loans, you can use the student loan interest deduction to lower your taxable income by as much as $2,500. It is an “above the line deduction,” meaning it can be claimed without itemizing. It is available to borrowers with modified adjusted gross incomes up to $65,000 or $130,000 of couples filing jointly. The current tax deduction saves people a maximum of $625 per year. The proposed House bill would repeal the deduction while the Senate bill would keep it in place.

If you are paying for your child’s tuition you can currently claim the American Opportunity Tax Credit for up to $2,500 per child enrolled in college each year. The full credit is available to couples earning up to $160,000 per year and an individual earning up to $80,000 per year. The proposed House bill would expand eligibility to a student’s fifth year at a reduced benefit and the Senate version would keep the credit as it is.

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.

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

When Unpaid Student Loan Bills Mean You Can No Longer Work

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Many former students across the country have realized that the loans they took out to pay for their education are now derailing their careers. In 20 different states, government agencies can and have been seizing state-issued professional licenses from residents who default on student loans.

As debt levels rise, creditors are taking increasingly tough actions to pursue people who fall behind on student loans. Across the nation, firefighters, nurses, teachers, attorneys, massage therapists, barbers, psychologists and real estate brokers have all had their licenses suspended or revoked.

In the past, lenders have pursued delinquent borrowers by filing lawsuits, garnishing their wages, putting liens on their property and seizing tax refunds. However, lenders believe if borrowers are faced with losing their licenses, they will find the money. On the other hand, critics of the laws say that enforcing these terms will shove some borrowers off a financial cliff.

Florida is among the 20 states that can seize state-issued licenses if a borrower defaults on student loans. The other 19 states include: Washington, California, Alaska, Hawaii, North Dakota, South Dakota, Minnesota, Iowa, Illinois, New Mexico, Texas, Arkansas, Mississippi, Louisiana, Tennessee, Virginia, Georgia, Kentucky and Massachusetts.

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.

 

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

Most Student Loan Fraud Claims Involve For-Profits, according to recent study

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An analysis of Education Department data reveals that students who attended for-profit colleges filed more than 98 percent of the requests for student loan forgiveness alleging fraud by their schools.  Century Foundation found nearly 100,000 loan forgiveness claims (known as borrower defense to repayment) have been received over the past two decades, which paints a troubling picture of the state of for-profit higher education in the United States.

The study found “a disproportionate concentration of predatory behavior among for-profit colleges” that raises “serious concerns about the federal government’s current approach to providing relief to students who have been defrauded and misled.”

For-profit colleges expanded rapidly over the past two decades, with enrollment rising from around 230,000 in the early 1990s to a record 2 million in 2010. These for-profit schools recruited aggressively, targeting more “non-traditional” students, usually older people who had jobs and could only study part time.

They also heavily targeted women, people of color and veterans. But after graduating, many students struggled to find jobs they were promised or had difficulty transferring credits to other schools.  This lead to a massive increase in student loan defaults.  A 2010 government study found that all of the 15 for-profit colleges evaluated by undercover agents made deceptive statements to prospective students and four of them encouraged fraudulent practices.

The report comes as Education Secretary Betsy DeVos faces criticism for not moving forward with two Obama-era regulations that would have added protections for student borrowers.  The rules, known as borrower defense to repayment, were developed after a series of high-profile collapses of for-profit chains such as Corinthian Colleges and ITT Technical Institute left thousands of students with worthless degrees and mountains of student loan debt.  The regulations were scheduled to take effect on June 30.

However, the review of tens of thousands of claims has stalled and the AP reported last month that the department is considering abandoning the practice of full loan cancellation in favor of partial forgiveness.  Student advocates are pointing to the Trump administration’s ties to the for-profit industry and accuse DeVos of putting industry over students.

Click here 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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What you need to Know about Student Loan Interest

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Most college students are unaware how loan interest or capitalization works, according to a recent study.  Opting to delay payments after college or graduate school can determine how much you pay over the lifetime of your student loans.

When the interest on a student loan capitalizes, the accrued interest is added to the principal balance, which is the original amount borrowed.  For that reason, the interest charges increase because it is now based on the new higher principal.

Here are 5 examples of when capitalization occurs with federal student loans:

  1. Not making interest payments during school and during the grace period. For undergraduate and graduate unsubsidized Stafford loans, interest begins to accrue immediately after the loan is dispersed.  Subsidized loans are the best option for students, where the federal government pays the interest while the borrower is in school.
  2. Switching from an income-driven repayment plan. It is important borrowers know that just because they are enrolled in an income-driven repayment, Income-Based Repayment Plan or Pay As You Earn (PAYE), this may not be covering all of the interest accruing on the loan. While some income-driven plans stop capitalizing interest after 10 percent of the original loan balance has been paid, there are consequences from switching out of these plans. For example, unpaid accrued interest will capitalize when a borrower no longer qualifies for a financial hardship, fails to provide proper documentation for the plan’s annual enrollment or exits the plan.
  3. Forbearance or deferment. A borrower needs to be careful when selecting these options and know the consequences. Interest is still accumulating on student loans even though the loans are in forbearance or deferment.  This loan interest can accumulate quickly.
  4. Consolidation of federal loans. Consolidating multiple loans into one direct loan, means you are creating an entirely new loan.  It is important to consolidate right after graduating as a measure to reduce the capitalization interest that comes with federal loan consolidation.  Waiting longer to do so typically increases the principal balance.
  5. Defaulting on a student loan. Interest that was outstanding at the time of default will be capitalized.  The principal amount will not only become larger, but the entire balance will be due and payable immediately.

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.