student loan debt Archives - Page 9 of 28 - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

How to Handle Zombie Student Loan Debt

Posted on September 21, 2019by Admin

Student loan debt has been known to haunt borrowers for years, if not decades, after that first loan is issued. Many borrowers find themselves on payment plans that can least up to 25 years. To them, a student loan is like a mortgage without the benefit of having the house to live in. Once the debt is paid in full, the last thing that person wants to think about again is that loan. However, for many borrowers, that debt never seems to go away and often comes back in the form of zombie debt.

Most forms of debt are limited by a statute of limitations, which governs how long a creditor can sue the borrower for the debt. Federal student loans were once governed by a six-year statute of limitations until 1991 when that statute of limitations was lifted. Now they are technically collectible indefinitely. Private student loans, however, are still limited by statute.

Debt Relief, student loan debt, Student Loans

FTC Takes Legal Action Against Corrupt Student Loan Debt Relief Companies

Posted on September 18, 2019by Admin

The case comes as a warning to student loan borrowers struggling with their debt and company’s looking to profit from it. The Federal Trade Commission is cracking down on two student loan debt relief operations and the financing company that assisted them. The complaint is alleging the companies charged illegal upfront fees, led consumers to believe the fees would go towards reducing their loan balances, and falsely promised to permanently lower and even eliminate their balances.

The FTC has also charged the companies with locking its customers into high-interest loans and paying their fees without making required disclosures. This caused their customers to sink further into debt.

Credit Card Debt, Debt Relief, student loan debt, Timothy Kingcade Posts

The Effects Student Loan Debt and Credit Card Debt have on U.S. Economic Growth

Posted on August 30, 2019by Admin

The fact that many Americans are struggling to pay their student loans and credit card debt is not just effecting the individuals carrying the debt. It is taking a toll on the economy, as well. In fact, these two growing categories of debt are reportedly weighing down U.S. economic growth.

Credit card balances are at an all-time high at $868 billion in the second quarter, which is up from $848 billion reported in the previous three months, according to the Federal Reserve Bank of New York. Consumer debt is also climbing, hitting an all-time high of $13.86 trillion in the second financial quarter. When compared with the previous high of $12.68 trillion just before the 2008 recession, financial experts have expressed concern as to what this could mean for the country’s financial well-being.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

How to Discharge Student Loan Debt in Bankruptcy

Posted on August 27, 2019by Admin

When it comes to discharging debts in a bankruptcy case, student loan debt has traditionally been one of the most difficult debts to discharge. The fact that this debt can be so difficult to get rid of in a bankruptcy case has kept some consumers from filing for bankruptcy. The problem is it can be very difficult for a person who is in a financially tight situation to keep paying on this debt outside of bankruptcy. Student loan debt is oftentimes the largest debt a consumer carries, outside of their mortgage. If someone goes through bankruptcy only to continue being stuck with his or her student loan debt, that person may end up in the same financial situation, again.

Here is how to discharge student loan debt in bankruptcy.

Undue Hardship

Student loan debt can be discharged if the borrower can demonstrate that he or she would suffer an undue hardship if forced to pay back his or her student loans. However, bankruptcy courts do not have one set standard to guide them in determining what exactly qualifies as an undue hardship. The U.S. Bankruptcy Code does not give a clear definition for what undue hardship is, which could be why so many inconsistencies exist among bankruptcy courts. Some courts will only use the undue hardship test to grant full discharge of the loans while others will allow for partial discharge. Others view the test as an extremely difficult standard to meet while others may be more lenient. At the end of the day, if the borrower has a very low income or took the student loan out to attend a for-profit trade school, he or she may have a better chance to get the obligation discharged, although other factors will be considered, as well.

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More Baby Boomers Filing for Bankruptcy, up 300% in Recent Years

Posted on August 23, 2019by Admin

More baby boomers are filing for bankruptcy than in previous generations, according to recent reports. Consumers over the age of 65 are reporting more debt now than ever before, and as a result, more of these individuals are filing for bankruptcy as a means of getting out from under this debt burden.

According to figures from the Consumer Bankruptcy Project, the number of people over the age of 65 who have filed for bankruptcy has tripled since 1991. The study looked at 895 personal bankruptcy cases involving filers ranging in age from 19 to 92. What they found was more older Americans are filing for bankruptcy as a way to seek protection from creditors and protect their assets. In fact, the number of filers in this age group has increased anywhere between 200 and 300 percent since 1991.

Debt Relief, student loan debt

Loan Forgiveness Applications Stall at the U.S. Department of Education

Posted on August 20, 2019by Admin

Student Loan Forgiveness

More than 180,000 applications remain pending in the hands of the U.S. Dept of Education, leaving borrowers with little to no answers when it comes to their student loan forgiveness. This lack of progress has many borrowers feel that their chances of receiving any type of relief for their student loan debt is slipping away.

Last year, a federal judge ruled that the Department of Education’s delays in processing student loan forgiveness applications from borrowers who were defrauded through for-profit school lending schemes was illegal and in direct violation of federal law. The ruling supported claims that the Department was purposely ignoring borrowers seeking promised relief from their debt.

Bankruptcy Law, student loan debt, Student Loans

Bankruptcy: Finally An Option for Student Loan Debt?

Posted on August 1, 2019by Admin

Student loan debt is at an all-time high with 44 million Americans carrying outstanding amounts of the debt. It is currently estimated that $1.5 trillion is owed in student loan debt. With that many people graduating with student loans, it should come as no surprise that many of these borrowers eventually default.

Approximately 11 percent of student loan borrowers have defaulted or were delinquent on their loans by the end of 2018. For the most part, consumer debt, including credit card and medical debt, can be discharged in a bankruptcy case. Only a very select list of debt is not allowed to be discharged at the end of a bankruptcy case, including child support, alimony, criminal fines and certain overdue tax debt.

student loan debt, Timothy Kingcade Posts

Teachers Sue U.S. Over Student Loans that Were Not Forgiven

Posted on July 23, 2019by Admin

The American Federation of Teachers has filed a lawsuit against the U.S. Department of Education on behalf of educators who argue that they have been wrongfully denied loan forgiveness under the federal public service loan forgiveness program.

The Public Service Loan Forgiveness program was created more than a decade ago to encourage young graduates to seek employment in a government job or in public service industries. While the pay in these types of jobs tends to be lower, the promise of having their federal student loans forgiven at the end of a ten-year period was created to entice them to apply for these positions.

Under the program, borrowers who work in certain public service professions, including law enforcement, nursing, and teaching, and who make payments consistently for ten years, can have their federal loans forgiven. It is estimated that more than one million borrowers have filed official paperwork to participate in the program. However, many of these borrowers are finding out that they suddenly do not qualify for forgiveness for one reason or another, including not carrying the correct type of loan.

student loan debt

5 Tips to Keep in Mind Before Taking out a Direct PLUS Loan

Posted on July 2, 2019by Admin

Many parents will do anything possible to help their children get a higher education, and that desire to help often takes the form of financial aid. It is estimated that at least 3.4 million individuals have taken out a Direct PLUS Loan to help pay for their child’s college education. Before considering these loans, it is important to be aware of the risks that come with this form of financial assistance.

Direct PLUS Loans allow parents of eligible college students to take out loans for their children’s education through a federal government program. The U.S. Department of Education is the lender, which is why many borrowers believe that these loans offer a safe and secure option to pay for their child’s education.

Loan Eligibility, Amount Available and Fees. Not all parents are eligible to take out Direct PLUS Loans. First, they must be taken out on behalf of biological and adopted children, although some situations allow for stepparents of dependent students to take out these loans. Parents can take out enough money needed to have their child attend college; minus any amount of financial aid the student receives. Since the tuition and expenses vary from college to college, no maximum amount is set on how much a parent can take out through the PLUS program.Interest rates on PLUS loans are set by the federal government and are currently at 7.6 percent. Since these loans are unsubsidized, this means that interest on the loan begins accruing immediately. Payments on the loans can be deferred by the borrower until his or her child finishes college, but the balance will grow since the interest continues to accrue. If no deferment is requested, the parent will need to start paying right away. Borrowers also will have to pay a loan fee along with interest charges, which varies depending on the year. The fee comes out proportionately from each loan disbursement, but it does not increase the total amount of the loan.
Limits on Repayment Programs. Parents have a handful of repayment options available for PLUS loan programs. The standard repayment plan involves equal payments made over the course of ten years. Borrowers can also request a graduated repayment plan, which allows the borrower to start off with lower payments, building up every two years over a ten-year period. Borrowers can also pay under an extended plan, which spreads the payments out over 25 years instead of 10. The monthly payments are lower, but the borrower ends up paying much more in interest in the long run. However, parent borrowers are limited on the types of repayment plans they may have in addition to these plans, while student borrowers have more options available to them.
Repayment Responsibility May Not Be Transferred. Many parent borrowers take out PLUS loans on the assumption that they can eventually transfer the debt to their child upon graduation. However, this option is not available for a PLUS loan. Responsibility for repayment stays with the parent who is the legal borrower. This fact is important for the parent to realize if loan payments present a problem later as the parent approaches retirement age.
Impact on Credit Score. Any time a borrower takes out a loan, it should be expected that his or her credit score will take a hit, and that includes PLUS loans. If a parent takes out a PLUS loan, he or she should expect the loan, its balance, and payment history on the loan will appear on the parent’s credit score. So long as the borrower makes payments on time, this fact should not cause too much of a problem. However, if the parent is not able to keep up and misses a payment, the damage to the borrower’s credit score could be significant.
Consequences of Defaulting on the Loan. It is extremely important that the parent borrower be able to handle the payments associated with the PLUS loan. Defaulting on a PLUS loan comes with serious financial consequences and can put the borrower at risk of wage garnishment, as well as offsets on his or her tax refunds or Social Security disbursements.

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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. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

student loan debt, Student Loans

Lawsuit Filed Against Betsy DeVos for Failure to Cancel Defrauded Students’ Debt

Posted on June 28, 2019by Admin

More than 150,000 student loan borrowers have filed a lawsuit against the U.S. Dept. of Education and Education Secretary Betsy DeVos alleging they are being deprived of student loan debt forgiveness they are rightfully entitled to. The lawsuit accuses the Department of Education of failing to implement an Obama-era regulation known as “borrower defense, ” which allows students to have their federal student loans cancelled if their school misled them or engaged in other misconduct.

The attorney representing the Plaintiffs in the case say, “The law is clear: Students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place.”

Borrower Defense Applications continue to pour in, but it has been reported that the Dept. of Education has not approved or denied a claim since June 2018. The majority of the complaints concern “for-profit” schools, of which there are some 7,000 around the country, which take in around 15% of government financial aid.

Last year, a federal judge ruled that DeVos’ delays of the borrower defense protections were unlawful. Still, the agency continues to neglect the applications.

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