student loan debt Archives - Page 24 of 27

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.

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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 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.

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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.

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Bankruptcy Law, Credit, Timothy Kingcade Posts

Find out the Jobs that Qualify You for Student Loan Forgiveness

Posted on April 17, 2015by Admin

Student loan debt is the second largest source of debt in America, behind home mortgages. Last year’s graduates entered into the job market with an average of $33,000 in student loan debt, the largest average debt for college graduates to date, according to an analysis by Edvisors.

Students do have options, such as deferment and income-based repayment plans to assist on a short-term basis. Some students have even turned to refinancing their student loans. However, there are some jobs that make you eligible for true student loan forgiveness.

Last year the Consumer Financial Protection Bureau revealed that approximately 25 percent of the U.S. workforce employed by a public service employer may be eligible for student loan forgiveness.

Although there is no student loan forgiveness program for private student loans, the programs cover many different types of federal student loans. In addition, forgiveness programs vary depending on the type of federal loan.

The Department of Education has created a reference charge that provides all of the conditions that may lead to the cancellation or forgiveness of a federal student loan.

Teacher Forgiveness
One of the most common ways to qualify for student loan forgiveness is to work as a teacher in the public service sector or for a nonprofit organization. You must first work for five consecutive years in a designated elementary, secondary or educational service agency to be eligible for up to $5,000 of the total amount to be forgiven.

Up to 100 percent of a Perkins loan may be forgiven if you have served full-time in a public or nonprofit elementary or secondary school system serving low-income families. You may also qualify if you are a special education teacher for infants, toddlers, children or youth with disabilities. If you teach in the fields of mathematics, science, foreign languages, bilingual education or any other field determined by the state education agency to have a shortage of qualified teachers in your state, you may also be eligible for student loan forgiveness.

If you qualify, the following formulas may be applied:

• 15 percent canceled per year for the first and second years of service;
• 20 percent canceled for the third and fourth years of service;
• 30 percent canceled for the fifth year of service.

Public Service Employee Forgiveness
Direct Loans are the most common loan considered for forgiveness for public service employees. If you hold a Perkins or FFEL loan, you may need to consolidate your loans in the Direct Loans program to qualify. PLUS loans for parents and graduate students are part of the Direct Loans Program.

If you are employed with a federal, state or local government agency, entity or organization or a not-for-profit organization that has been designated as tax exempt by the IRS, you may qualify for this program.

You may also qualify if the following apply to you:

• You have made 120 on-time, full scheduled, monthly payments on your Direct Loans after October 1, 2007. If you have consolidated your Perkins or FFEL loans, the 120-payment cycle must begin after the loans are consolidated;
• You have made those 120 payments under a qualified repayment plan;
• While you have made each of those payments, you must be working full-time at a qualifying public-service organization.

Click here to read more on jobs that may qualify you for student loan forgiveness.

Bankruptcy Law, Credit, Timothy Kingcade Posts

6 Steps to Defeat Student Loan Debt Collectors

Posted on March 27, 2015by Admin

President Obama has promised to take action against abusive student loan debt collectors. Through his Student Aid Bill of Rights, his goal is to ensure consumer protections for student loan borrowers. More than 70 percent of college graduates have student loan debt, the second largest source of debt in America.

In the first quarter of 2015 more than twelve percent of student loan debts were in default, according to the National Student Loan Data System. Analysts predict the number of borrowers in default will continue to increase unless something is done.

Below are six steps you can take to help better manage your student loan debt:

1. Contact your lender. Lenders often sell loans, therefore several agencies may be involved in the collection of your debt. The first thing you must do is contact your lender to make sure you have information on any and all balances you have outstanding. You will need to make a list of all of your debts along with the specific lenders and account numbers.
2. Check your credit report. Oftentimes, collection agencies will report student loans multiple times and will report a separate line per semester with different account numbers. Make sure there are no duplicate loans on your credit report.
3. Apply for the rehabilitation program. Contact the collection agency that now has your student loan and explain that you wish to apply for the loan rehabilitation program with more affordable payments. The benefits of rehabilitation include: bringing your loan out of default, repairing the damage on your credit report, and after five months in the program, you can stop any garnishments being taken out of your paycheck or tax refund.
4. Make your payments on time. If you successfully make nine payments on time, your loan will be taken out of collections. In addition, the default status will be removed.
5. Ask the collection agency for a letter to confirm that your loan has been removed from the default status. You will need to request letters from every collection agency that you have been paying.
6. Contact the three major credit bureaus. Once you receive the confirmation letters, contact all three credit bureaus – Experian, TransUnion and Equifax and forward a copy to each of them.

Click here to read more on the 6 steps to defeat student loan debt collectors.

Bankruptcy Law, Credit, Timothy Kingcade Posts

President Obama Announces Changes for Student Loan Repayment

Posted on March 16, 2015by Admin

President Obama recently signed a “student aid bill of rights,” which outlined an assortment of policy changes to make it easier on borrowers to pay back their student loans. It will require businesses that service student loans to ensure students know how much they owe, along with providing repayment options and helping students get back in good standing who are falling behind on payment.

In addition, President Obama has asked the Treasury and Education Departments and the Consumer Financial Protection Bureau to report by October 1, 2015 on whether or not bankruptcy laws or other laws should be amended to include student loans. Lenders have always resisted loosening bankruptcy standards for student loans. However, many believe that student loans should be eligible for discharge when students are burdened by heavy debt.

Federal student loan borrowers are eligible for discharge in bankruptcy court for borrowers with permanent disabilities. However, the review will focus on students who borrower from private lenders, who do not have the same protections as federal student loan borrowers. According to the White House, approximately 40 million Americans have student loan debt and more than 70 percent of graduates with bachelor’s degrees have an average of $28,400 in student loan debt.

Click here to read more on Obama’s plans to change student loan debt repayment.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Student Loan Debt May be Sabotaging Your Shot at being a Homeowner

Posted on February 27, 2015by Admin

In 2014, student loan debt topped $1.2 trillion, its highest figure to date. A sample taken from Equifax showed that most borrowers owed an average of $27,000. This number is 74 percent higher than it was ten years ago. Economists believe student loan debt is largely to blame for the decrease in young adults becoming homeowners. The number of 27-30 year olds with home-secured debt has dropped significantly since 2009, according to a report by the Federal Reserve Bank of New York.

The Federal report also showed that financial conditions for young adults are not improving. In the last quarter of 2014, the percentage of delinquent student loans rose from 11.1 to 11.3. Missing student loan payments can greatly impact a consumer’s credit score. Since the housing bubble burst, credit scores and debt-to-income ratios have been held to higher standards, making it harder to be approved for a home loan.

Click here to read more on the effects student loan debt has had on homeownership over the last decade.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami 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 website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Parents with poor credit: Beware of this Student Loan Rule Change

Posted on February 5, 2015by Admin

There has been much criticism that federal student loans are too easy to get and that borrowers can take on large amounts of debt with little verification that they can ever pay it back. The Department of Education has announced new regulations that are aimed at one type of federal loan that currently does not require a credit check- Parent PLUS Loans.

PLUS loans are available to parents to help provide financing for children who do not qualify for enough financial aid on their own. But there are no specific limits on the amount that can be borrowed under this program- other than that parents cannot borrow more than the total cost of their child’s education after other financial aid has been deducted.

In the final regulations issued by the Department of Education, which go into effect March 29, 2015 borrowers who have an “adverse credit history,” may find it harder to qualify for these type loans. The evaluation will take into account whether the borrower has:

• One or more debts that are 90 days or more delinquent with a total outstanding balance larger than $2,085;

• Accounts placed for collection or charged off in the two years before the credit report is pulled;

• Bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a federal student loan debt in the past five years.

PLUS loans can be dangerous and are often accompanied by higher interest rates than other federal loans and fewer flexible re-payment options. For example, one parent shared on Credit.com’s blog that he has $45,000 in outstanding parent loans, but only makes $28,000. His children are unable to help him repay the loan at this time.

These changes are likely going to make parents look harder at the true burden of student loan debt and the potential return they are getting with taking out these loans. Parents thinking about borrowing money to help their children pay for college would be wise to review their annual credit reports to identify any discrepancies and think twice about whether PLUS loans are the best option.

Click here to read more on this story.
http://www.foxbusiness.com/personal-finance/2015/02/02/student-loan-rule-change-that-could-hurt-parents-with-bad-credit/

Bankruptcy Law, Credit, Timothy Kingcade Posts

New Bill Introduced to Forgive Student Loan Debts during Bankruptcy

Posted on February 3, 2015by Admin

A lawmaker has filed legislation in Congress which will allow student loan debt to be treated just as other forms of debt that can be discharged in bankruptcy. As we all know, student loan debt is treated differently in bankruptcy court than credit card debt, auto loans or mortgage debt, and cannot be discharged. Representative John K. Delaney, D-Md., introduced the Discharge Student Loans in Bankruptcy Act (H.R. 449).

In a statement he said, “Student loan debt is dragging down economic growth, keeping the American Dream out of reach for many and is a monthly strain for millions.” Student loan debt continues to increase as the cost of college tuition continues to rise. According to a study by the Institute for College Access & Success, 69 percent of graduates from the class of 2013 left school with an average of $28,400 in student loan debt.

Delaney has backed several bills focused on student loans and financial aid. He is also a cosponsor of the Middle Class CHANCE Act, which increases support provided by Pell Grants. In his previous term, Delaney voted for legislation in the House to prevent student loan rates from rapidly increasing and cosponsored the Truth in Tuition Act, which requires institutions to provide multi-year tuition and fee schedules.

Click here to read more on this story.
http://www.accountingtoday.com/news/education-planning/congressman-introduces-bill-to-forgive-student-loan-debts-during-bankruptcy-73395-1.html

Bankruptcy Law, Credit, Timothy Kingcade Posts

Top 5 Predictions for Student Loans this Year

Posted on February 2, 2015by Admin

Last year, we saw small signs of change and new advocates gearing up to address the student loan crisis. You may be wondering what to expect this year. Here are five predictions for student loans in 2015.

1.) Policy changes. There will continue to be a lot of attention on student loans in Washington. There will likely be a bill passed by a Congressional Democrat, but it will be tough to pass with a Republican-run Congress.

2.) Rising rates. Interest rates will remain relatively stable, with the possibility of increasing towards the end of the year. It has been widely anticipated that interest rates will rise towards the end of this year.

3.) Better student loan options for more people. New companies have entered the market with the goal of “fixing the broken student loan market.” These online lenders focus on giving student loan borrowers a better rate and overall better experience. They focus mainly on refinancing student loan debt into lower interest rate loans. These companies will continue to expand this year, providing more positive options for those with student loan debt.

4.) More talk about the value of an education. Price-conscious consumers will rigorously evaluate the ROI of their education. People will become more educated on the university system today- and determine the high cost of education is economically “worth it” for some schools and degrees, but not as much for others.

5.) Broader attention from investors. Investor demand for student loan assets will increase. The last 1-2 years have seen increased student loan activity in the capital markets- securitizations, whole loan sales and equity investments. There is expected to be more of this in 2015 and an increased demand from investors.

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