student loan debt Archives - Page 26 of 27

Three Potential Student Loan Changes to Watch for in 2014

Posted on February 3, 2014by Admin

Student loan debt and borrower default rates continue to capture headlines. Federal student loan programs and interest rates for 2014-2015 are expected to change- and not for the better. Below are three potential student loan changes borrowers should watch out for in 2014.

1.) PLUS loans: Unlike Stafford loans, approval of PLUS loans and graduate PLUS loans are subject to credit history. Borrowers that have either filed for bankruptcy, foreclosure or have loan default within the last five years are not eligible for a PLUS loan. Congress is set to tackle this issue next month. Adjustments being proposed would help reduce default rates, but could also shut out a larger portion of students and parents.

2.) Interest rates: Congress battled student loan interest rates throughout 2013, finally agreeing on market-based rates. While the agreement lowered student loan interest rates- this was only a temporary fix. Experts predict the Treasury rate will rise as high as 3.75 percent, while others have a more conservative forecast of 2.96 percent. Either way, students taking out federal loans for the upcoming year should expect to pay more.

3.) Student loan counseling. The Smarter Borrowing Act could make student loan counseling more comprehensive by requiring colleges and universities to send students annual updates on their balance, interest rates and repayment options. The bill would also require colleges with higher default rates to include financial literacy and budgeting to their student loan counseling sessions.

Click here to read more on this story.

If you are in a financial crisis and are considering filing 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, 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.

Five Common Debt Traps and how to avoid them

Posted on January 29, 2014by Admin

Consumer debt stands at more than $3 trillion, according to the Federal Reserve. Below are five of the top debt traps Americans face and how you can avoid them.

1.) Job loss.Unemployment is steadily improving; but the level still remains above 7 percent. Unemployment or underemployment is the number one reason people seek financial counseling. Having an emergency savings fund totaling three to six months’ living expenses can help bridge the gap between jobs, if necessary.

2.) Medical costs. An unexpected illness can be emotionally and financially devastating, even for those with health insurance. It’s tempting to choose lower healthcare coverage to bring down a monthly premium. But those who forgo needed medication to mediate costs can face substantially higher emergency and ambulatory costs. Those with chronic health conditions or medication needs should consider a plan that’s more all-inclusive.

3.) Credit card overuse. When expenses increase and income decreases, many turn to credit cards to cover the difference. When managing credit card debt, pay off the cards with the highest interest rates first.

4.) Loss of a partner. Whether going through a divorce or losing a spouse to an illness, the loss of a partner can be financially devastating. Many times, this loss cannot be predicted. Paying down debt and building savings can provide a cushion if tragedy strikes.

5.) Student loans. The average student loan balance among borrowers is more than $24,000 and 66 percent of all bachelor’s degree recipients incur student loan debt. In some circumstances, student loan payments can be postponed through deferment or forbearance- sometimes these can even be forgiven. Federal lenders also offer extended payment and loan consolidation programs, which can extend the term of the loan and lower your monthly payments.

Click here to read more on this story.

Bankruptcy Law, Credit, Foreclosures

U.S. Consumer Debt on the Rise- Highest Since Early 2008

Posted on November 18, 2013by Admin

According to data from the Federal Reserve Bank of New York, U.S. household debt increased in the latest quarter by the most it had in more than five years and student loans in delinquency hit a record high. Total consumer debt rose to $11.28 trillion, which marked the biggest quarterly jump since 2008. The increase in the third quarter suggests that the cycle may be nearing its end.
There is has been an increase of household debt essentially across all spectrums. Americans have recently put more on credit cards, borrowed more money to buy houses and cars and took out more student loan debt.

The continued rise in student debt continues to be a cause for concern. Outstanding balances increased $33 billion to $1.03 trillion in the third quarter. A record 11.8 percent of loans were behind by 90 days or more, the New York Fed said, up from 10.9 percent in the second quarter. Student loan debt can unfortunately not be discharged under current bankruptcy law. Economists worry that in the coming years delinquencies could lock people out of economic participation.

Foreclosures which continue to decline, hit their lowest levels since the end of 2005.

Click here to read more on this story.

Bankruptcy Law, Credit, Timothy Kingcade Posts, Uncategorized

Student Loan Default in the U.S. and Steps the Govt. is taking to address the Problem

Posted on October 31, 2013by Admin

With student loan debt approaching $1.2 trillion it has become a threat to our children’s futures. Senator Elizabeth Warren, D-Mass., a leading consumer activist and advocate for student loan reform in Congress recently co-sponsored a bill, “Keep Student Loans Affordable Act of 2013.” The new bill would have rolled back interest rates and frozen them for a year at 3.4 percent. During that year, Warren and her colleagues planned to reform the student loan system to eliminate profits, provide better consumer protection and address “the college affordability problem,” which, she says, forces families into debt in the first place.

The bill unfortunately failed, but Warren is continuing to press for the following changes:

– Eliminating government profits from the student loan program.

– Reducing the burden of student debt on existing borrowers by letting them refinance their loans during this period of historically low interest rates.

– Restoring basic consumer protections, such as bankruptcy relief. Under current law, student loans cannot be dismissed when someone files for bankruptcy protection.

President Obama gave his support to Warren’s key issue saying that, “government shouldn’t see student loans as a way to make money; it should be a way to help students.” The urgency from Warren and other advocates is that students and their parents are increasingly turning to loans to pay for higher education, as college costs have become out of reach for most families.

Nationally, about 11 million students take out college loans each year. One reason loan numbers are spiking is that college costs have soared since 1982-83, by 257 percent at four-year state colleges and universities and by 166 percent at four-year private colleges and universities, according to the College Board. At the same time, state support of public colleges and universities has slipped. State funding for public universities dropped by 23 percent between 2007 and 2012, Warren said.

Defaulting on student loans can have a lasting impact on your financial future. The Federal Student Aid website lists the following consequences of defaulting on your student loans: The outstanding amount of the loan-both principal and interest- becomes due immediately; the borrower loses eligibility for any additional student aid or forgiveness program; you are reported to credit bureaus; the overall debt will increase as interest keeps building, which can include late fees, collection fees and court fees. The following consequences can also result: Wages may be garnished; tax refunds may be withheld; pay can be withheld and the lender may even file a lawsuit against you.

The debt that students are taking out to finance their lives and futures is crushing! Student loans are the toughest because they start so early, when students are trying to launch their careers and gain their financial footing. This is also the time young people are the most vulnerable and have the fewest resources available to them.

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.

Bankruptcy Law, Timothy Kingcade Posts

U.S. Dept. of Education to Contact Borrowers with NEW Options for Repaying Student Loans

Posted on September 26, 2013by Admin

Starting next month, the U.S. Department of Education will contact borrowers who are struggling to repay their federal loans to make sure they know of all the options available to them. The challenge will be getting the word out as there are many people who can benefit from the income-based repayment programs being offered. To accomplish this, the department is planning to send e-mails to those who seem most likely to benefit from the programs, explaining debt-relief plans based on the borrower’s income.

Efforts to help alleviate student debt, now at more than $1.1 trillion, and make college more affordable have been central issues for the Obama administration. It has expanded debt relief for low-income borrowers with a Pay as You Earn program for recent graduates, and simplified enrollment by putting the application online and allowing applicants to import information from their tax return.

Once enrolled in a program, low-income borrowers with high debt will pay a percentage of their discretionary income every month, and after a certain time period — 20 years in the new program, 25 years in older plans and 10 years for those in public service jobs — the remaining federal debt is forgiven.

Of course, income-based programs have a downside: because the repayment period is longer than the standard 10 years, except for those in public service jobs, interest costs are higher. The U.S. Dept of Education stresses that the programs are not meant for all borrowers, but as a safety net for those struggling with their student loan debt.

Click here to read more on the new options available for repaying student loans.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Parents on the Hook for Child’s Student Loans

Posted on September 25, 2013by Admin

American student loan debt tops $1 trillion, according to the Consumer Financial Protection Bureau. But with many recent graduates facing a tough job market and limited employment opportunities, what happens when they cannot afford their monthly student loan payments? If a parent co-signed the loan, the burden shifts to them.

Bankruptcy attorneys are seeing an increasing trend with parents struggling to pay off their child’s student loans. Unfortunately, even bankruptcy cannot wipe the slate clean- unless of course undue hardship can be proven. Al Franken, on the Senate Education Committee, said that he has backed several pieces of legislation he thinks could help. One example is the Fairness for Struggling Students Act, which, if passed, would make it possible to eliminate private student loan debt in bankruptcy. Franken has also backed legislation that aims to help students receive better counseling when taking out a loan.

Experts say parents can and should co-sign their child’s student loans, but must be “informed borrowers,” meaning they need to closely scrutinize the terms of the loan. Many banks are getting out of the student loan business, largely because of the increased scrutiny from lawmakers. JPMorgan Chase announced its departure just a couple of weeks ago. Bank of America, Citigroup, and U.S. Bank have already done the same. So for future borrowers, it means more student loans will come from the federal government.

Click here to read more on the story.

Bankruptcy Law, Credit, Timothy Kingcade Posts

As Debt Grows, Students Delay Payment

Posted on March 4, 2013by Admin

Student loan debt surpassed both credit card debt and mortgage loan debt last year. While recent graduates are struggling with a weak job market and bad economy, many borrowers are delaying principal and interest payments, causing an even larger surge of student loan balances. The housing market showed signs of recovery during 2012, however unemployment rates remained high. According to Ezra Becker of one of the three major credit-reporting agencies, TransUnion, students can only defer repayment for a short period of time, after which, borrowers often find themselves in financial troubles.

TransUnion tracked active student loans in its credit database from March 2007 to March 2012 and determined that 65.5 million of the 128.8 million in outstanding student loans were in deferment. The report also showed that the balance of loans including all lenders that are in deferment represent $388 billion of the $893 billion in total outstanding loan debt. The average in student debt had also increased to $23,829 since 2007, approximately a 30 percent increase. The surge in student loan debt has had negative impacts on individuals, lenders and the economy as a whole. According to U.S. Senator Dick Durbin D-III., Americans are struggling with such significant student loan debt that many are forced to put off major life decisions such as buying a home or starting a family.

If you have any questions on this topic or are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Senate Proposes Bankruptcy Option for Private Student Loan Debt

Posted on February 5, 2013by Admin

Last Wednesday, Sen. Dick Durbin unveiled a proposal that would give student loan debtors an option for bankruptcy. The proposal targets former students who have loans through private lenders such as Sallie Mae, Wells Fargo Corp. and Discover Financial Services. The proposed bill does not apply to federal education loans, which make up more than 80% of the $1 trillion in outstanding student loan debt.

Currently, Federal law prohibits private or federal student loans from being discharged in bankruptcy court, except in rare cases. Consumer advocates believe this to be the reason that many borrowers are unable to unload their student debt. In many cases, student loan debt is so high; there is little hope the borrowers will ever repay them. Other types of major consumer debt including mortgages, credit cards and auto loans are all dischargeable in bankruptcy court.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. at www.miamibankruptcy.com.

Credit, Timothy Kingcade Posts

‘Strike Debt’ Movement Aims to Erase America’s Debt

Posted on November 23, 2012by Admin

The latest Occupy Wall Street movement, the ‘Strike Debt’ movement consists of a group of professors, documentary filmmakers and corporate dropouts. The group aims to purchase some of the American people’s looming debt. ‘Strike Debt’ held a fundraiser last week at the Le Poisson Rouge nightclub called the ‘Rolling Jubliee.’ Before the event took place, the group had already raised $129,00 through online donations. Since then, the group’s efforts have raised more than $350,000.
In addition to raising funds for American’s drowning in debt, the group has also produced the ‘Credit Resistors’ Operations Manual. The manual explains how to fight and ignore creditors and explains how the credit industry works. While the group remains somewhat controversial, Forbes Magazine praised the movement, calling it an “idea we can all get behind.” The group will start the movement by purchasing medical debt and later move on to student loan and credit card debt.
To read more visit: http://www.nytimes.com/2012/11/14/nyregion/occupy-offshoot-aims-to-erase-peoples-debts.html?src=recg
Or visit: http://www.prwatch.org/news/2012/11/11870/join-rolling-jubilee-“you-are-not-loan”
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. at www.miamibankruptcy.com.

Bankruptcy Law, Timothy Kingcade Posts

Can Student Loan Debt Be Discharged through Bankruptcy?

Posted on October 3, 2012by Admin

Contrary to the 2005 ruling that prohibits student loan debt from being discharged through bankruptcy, there lies an exception to the rule. If ‘undue hardship’ can be proven, bankruptcy courts can discharge full or partial student loan debt. In 1987 the Brunner test was introduced to help establish the term ‘undue hardship.’ The test includes the following three conditions:
• The debtor cannot maintain a minimal standard of living if forced to repay the loans.
• The debtor must have additional circumstances that indicate this hardship is likely to continue throughout a significant portion of the repayment period.
• The debtor must have made good faith efforts to repay the loans.
The National Association of Consumer Bankruptcy Attorneys conducted a survey last year showing that 94 percent of attorneys reported that few to none of their clients would meet the undue hardship eligibility requirements. However, consumers that do meet the requirements have surprisingly high success rates of being discharged of their debt by the court system.
Many Americans carry student loan debt for the rest of their lives and sometimes it can later affect a consumer’s social security payments. In the last year student loan debt in the U.S. surpassed the $1 trillion mark and averaged around $17,000 in debt per person. In most cases where consumers have successfully proven undue hardship, there has been some type of health related condition hindering the person’s ability to obtain or keep a job.
To read more on this story visit: http://blogs.lawyers.com/2012/09/escape-student-loans-in-bankruptcy-in-extreme-circumstances/
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. at www.miamibankruptcy.com.