student loan debt Archives - Page 23 of 27

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

Texas Man Arrested by U.S. Marshals for Unpaid Student Loan

Posted on February 19, 2016by Admin

U.S. Marshals arrested Paul Aker of Texas last week for $1,500 in unpaid federal student loans. Aker borrowed the loan in 1987 and claims that he was unaware he had any outstanding debt.

“I paid two other student loans and thought I had consolidated everything and paid it all off,” Aker said. The U.S. Marshals reportedly made several attempts to serve Aker with a court order requesting that he appear in federal court. The agency said they had searched numerous known addresses before locating Aker. They also said they made contact with Aker by phone in 2012 requesting that he appear in court and he refused.

According to CNNMoney, Aker does not remember having that conversation and said he has not received any notification about the outstanding loan in a long time. A warrant was issued for his arrest soon after he failed to appear in court in 2012.

Two U.S. Marshals went to arrest Aker last Friday at his home. “I went inside to get my gun because I didn’t know who these guys were,” Aker said. The Marshals called for backup after Aker told them he was armed.

After two hours, Aker finally put down the gun and went outside to be arrested without further incident.

Although Aker’s original loan was for $1,500, he now owes approximately $5,700 including interest. He agreed to be placed on a payment plan before a judge last week.

According to CNNMoney, it is common practice for U.S. Marshals to serve summonses to people who fail to appear in court for unpaid federal student loans. However an arrest warrant is only issued after the debtor fails to appear in court.

Arrest warrants were issued for 25 people in the Houston, Texas area for failure to appear in court regarding unpaid student loans.

After 90 days, the loan becomes delinquent and damages the borrower’s credit score. However, student loans are not considered to be in default until nine months of nonpayment.

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, Debt Relief, Student Loans, Timothy Kingcade Posts

Florida Student Debt Relief Company Files for Chapter 7 Bankruptcy

Posted on February 15, 2016by Admin

A Doral, FL-based student loan debt relief company filed for Chapter 7 bankruptcy this month. The company, Student Aid Center, Inc. estimated between $500,000 and $1 million in assets and 50 to 99 creditors.

Student Aid Center reportedly offered assistance to students dealing with student loan debt. However, a lawsuit filed by the Minnesota Attorney General in July 2015 claimed that the company misled consumers by promising to reduce or eliminate their student loan debt and not producing results.

According to a statement from the Attorney General’s office, the debt relief company promised students that it could immediately qualify them for loan forgiveness with advertisements such as, “Get Your Student Loans Forgiven Now!” and “Say Good-Bye to Student Loan Debt.” The company promoted itself on social media sites and collected upfront fees from borrowers.

After numerous consumer complaints, the company was named in a class action complaint on September 21^st that alleged the company used robo-dialing without obtaining consumer consent.

Click here to read more on this story.

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

Student Loan Relief Scammers Using Social Media to Target Borrowers

Posted on January 19, 2016by Admin

Scammers are now targeting struggling borrowers on social media websites such as Facebook to offer student loan debt relief. Higher education and consumer protection officials say that if you see advertisements on social media sites they are likely a scam. These scammers are circulating personalized ads using school information that is posted on user profile pages.

These companies are not affiliated with any of the student loan servicers and are scamming borrowers with fee-based assistance they can get for free through the federal government’s financial aid office.

Student loan debt in the United States has reached nearly $1 trillion making it the second largest consumer debt market. Approximately eight million federal and private student loan holders are in default and millions more are struggling to make their minimum payments each month.

Moira Vahey, a spokeswoman for the Consumer Financial Protection Bureau (CFPB) said, “Companies offering these type services do not have the ability to negotiate with creditors in order to obtain a special deal under the federal student loan program.”

Companies such as College Education Services (CES) in Florida are telling borrowers they can have their student loans consolidated and lower their monthly payments. CES requires debtors to pay upfront fees and sign over power of attorney to the company. After failing to deliver results, there have been multiple complaints filed with the Florida Attorney General against this company.

Some debt relief companies promise to save borrowers thousands of dollars, charging them upfront fees and then enrolling them in a repayment plan that is available and free to anyone with a federal student loan.

The CFPB offers the following warning tips to borrowers when it comes to these so-called student loan debt relief companies:

The promise of immediate loan forgiveness or debt cancellation;
Demands for a power of attorney;
Requests for federal student aid PIN numbers;
Charging large upfront fees.

Related Resources:

http://www.winknews.com/2015/11/12/warning-student-loan-scams-hitting-swfl/

http://www.wvgazettemail.com/news/20160118/ads-offering-student-loan-relief-scamming-borrowers

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

Discharging Student Loan Debt is Easier than You Think

Posted on January 15, 2016by Admin

Contrary to popular belief, it is not impossible to have your student loan debt discharged in bankruptcy. Findings from a study conducted by Jason Iuliano, a Harvard Law graduate and a Ph.D. candidate at Princeton reveal that 40% of those who filed received some sort of discharge from the bankruptcy court.

Iuliano reviewed every bankruptcy case involving student loan debt from 2007. Of the 169,774 student loan debtors who filed for bankruptcy, only 213 filed adversary proceedings. An adversary proceeding is a lawsuit filed within a bankruptcy case. It is also a necessary step in bankruptcy when you are seeking to have student loan debt discharged. Out of the 213 who filed an adversary proceeding, 51 debtors received a full discharge, 30 received a partial discharge and 25 received an administrative remedy.

This means that only 0.1% of those who filed for bankruptcy tried to have their student loan debts discharged and of those who tried, half of them received some form of relief from the court.

Due to the public’s perception that student loan debt cannot be discharged, most student loan debtors who are struggling with large amounts of debt do not attempt to have their loans forgiven.

Below are the steps you should take if you are considering filing for bankruptcy to have your student loan debts discharged:

Hire an attorney. Do not be discouraged if you have to meet with several attorneys before finding one who is willing to take on your case. There are some bankruptcy attorneys who do not take on cases involving student loan debt.

Do some background research for yourself. Look into some of the successful cases where the debtors experienced similar financial struggles that you are experiencing.

Try to negotiate with your lender before filing for bankruptcy. The Department of Education has issued a guidance stating when a lender should not contest a debtor’s claim of undue hardship in bankruptcy.

Bankruptcy court can be invasive. If you decide to file bankruptcy, expect that all of your finances and purchases will be questioned.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Student Loans

Three Questions to Ask about the New Student Loan Repayment Program

Posted on December 24, 2015by Admin

Some financial counselors are advising caution when it comes to the federal government’s new income-based student loan repayment program. If you do not plan ahead, the lower monthly payments under this option could have long-term financial consequences.

The REPAYE program (Revised Pay As You Earn), which launched December 16, gives those Americans with Federal student loans the option of capping monthly payments at 10% of disposable income. For example, someone earning $30,000 a year would see payment capped at around $103 a month. It also includes a forgiveness feature- Any loan balance remaining after 20 years of payments will be wiped away for undergraduate loans. If you have loans from graduate school, the forgiveness comes after 25 years.

To make sure you weigh all the costs and benefits of the new plan, here are three questions to ask before you sign up for REPAYE:

Will your monthly payment reduce your balance? Check to see whether your monthly payment will cover both the principal and interest due on the loan. If it does not, your balance will keep growing, which can mean financial trouble in the long run.

How much more in interest will you pay? By stretching out your loan, you inevitably pay more in interest, which is money that could have been saved for your financial goals. This can also hurt your credit score if the loan balance keeps growing.

Will you be able to handle a large tax bill? Under current law the loan amount that is wiped out will be treated as taxable income. If the forgiven debt is a large amount, wiping it out may push you into a higher tax bracket, so you could end up paying the tax at an increased rate.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Student Loans

Student Loan Debt: The Next Crisis Facing Elderly Americans

Posted on December 23, 2015by Admin

The number of student loan borrowers age 60 and up has increased to 2.2 million, from 700,000 in 2005, according to the Federal Reserve Bank of New York. Twenty-seven percent of education loans held by people age 65-74 were in default in 2013, which means they have not made a payment in 270 days or more. In fact, more than half of education loans held by people 75 and older were in default.

The government has the ability to garnish wages for non-payment of student loans- even take your tax refund, but with seniors they have added leverage- their social security. In 2013, 155,000 seniors lost part of their retirement benefit to repay education debt, up from 31,000 in 2002, according to the GAO.

This has left many seniors helpless, as most forms of consumer debt can be discharged in bankruptcy- student loan debt cannot. Congress said in the 1970s that such debt can go away only if a debtor can prove repaying it would impose an “undue hardship.”

However, Congress never defined undue hardship, so it has been left to the courts discretion to determine just how desperate someone needs to be to qualify for relief. Bankruptcy judges have said that to get education loans discharged, borrowers must show their entire lives would otherwise be characterized by a “certainty of hopelessness” or that repaying the debt “strips [the debtor] of all that makes life worth living.”

Click here to read more on this story.

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, 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, 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

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.