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A mortgage servicer called a “furnisher” for purposes of credit reporting is responsible for updates to a borrower’s credit report.  Many times following a foreclosure, there is a limited time for the lender to seek a deficiency judgment.  Here is Florida it is one year.  If a year goes by, and the lender fails to seek a deficiency judgment then it waives the amount it is still owed after the foreclosure sale of a home.

Here’s the good news:  If a lender fails to report a deficiency as having been eliminated, discharged or abolished, it is then reporting inaccurate information.  This inaccurate reporting opens the door to the furnisher’s liability under the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681 et seq., (the “FCRA”) per the Ninth Circuit (California) in a recent case.  Gross v. CitiMortgage, Inc., 20-17160 (9th Cir. May 16, 2022).

This case is being compared to a leading contempt case, where the Supreme Court in Midland Funding  LLC v. Johnson, 137 S.Ct. 1407, (2017) found that a debt collector who filed a proof of claim in a bankruptcy that was obviously barred by the statute of limitations did NOT engage in false, deceptive, misleading, unconscionable, or unfair conduct so there was no violation of the Fair Debt Collection Practices Act.  While this decision involved a different set of circumstances and a different law, it is clear that these two views could be considered as inconsistent.

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I’m happy to say that we are starting to see Navient refund checks coming in!  A client today received a check for $13,795 which represents payments he had made on a Navient private student loan after June 30, 2021.  The remaining balance on these loans were forgiven per the Navient Attorney General settlement.

If you have questions about the Navient AG settlement, please watch and subscribe to our video:  https://www.youtube.com/watch?v=0m5rmBoj8eg

A FAQ is located here as well:  https://navientagsettlement.com/Common-Questions?portalid=0.

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We’ve made the difficult decision to not take any further clients who have requested assistance in filing Borrower Defense to Repayment applications.  Importantly, it is NOT because the program itself won’t result in possible full forgiveness, we still expect that for many borrowers, but it is taking a longgg time.  If you have filed a BDTR application, go here and click Manage my Application to find any updates on its processing:  https://studentaid.gov/borrower-defense/.

We’ll still be doing all of our other student loan stuff, just not the BDTR applications.

Mostly our decision to not offer assistance in filing BDTR applications is because the Department of Education’s procedures have tied our hands.  We can no longer file the applications online like we used to be able to do.  Even reviewing the PDF draft applications hasn’t been working well because the application itself when forwarded by the client to our office does not always convey the information to view, many of the text boxes are blank unless and until the application form itself is revised per Adobe to correctly retain the data.  It took our IT company some time to figure that out and only the Department of Education can modify their application.

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inflationLife Isn’t Meant to be Lived Paycheck to Paycheck

I know there’s been lots of press about the 8.5% inflation rate that was announced this week.

I also know that many people don’t believe that number.  Why not?

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Our in person student loan presentation went well this week at the annual Alexander L. Paskay Memorial Bankruptcy Seminar  – hopefully, our efforts to spread the word about student loan debt relief is getting to the masses!

The absolute easiest way to check for updates is our Student Loan Sidebar offered in the quarterly column of a bankruptcy attorney publication called the Cramdown which appears in the right hand column of our home page on christiearkovich.com OR better yet, our Youtube Channel “Student Loan Sidebar” found here.  The Spring edition was just uploaded today!  Please subscribe so we can continue offering free information about how to reduce student loans.  Our techniques are working and our extremely favorable reviews show this!!

We expect an update on the May 1 payment restart date any day now — we are guessing that it may be moved to the end of the year, and something will be done about the potential tax bomb at the end of an Income Driven Plan.  There are signs in the proposed budget that came out this week that leads us to believe that those taxes may be in line for a waiver – much like the waiver in place now for any student loan settlements that occur before December 31, 2025.  Remember, that only applies if the settlement (including payments) is concluded by the end of 2025 so if you have private student loans, the time to get them settled is now so there is enough time to actually get them paid off under that settlement in the next 3.5 years.

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Working-together
Are you worried that the law firm you choose to file your bankruptcy will put their lowest paid and lowest experienced staff on their case?  Or your case will be shuffled around a myriad of employees, and you’ll never be just assigned to one person?  Or if you are lucky and you get one person, that person may have only graduated six months ago?  Or just started with the firm last month?  These are common problems unfortunately.

The team you choose is really important.  You’ll be working with this team for a few months, and perhaps even a few years.  They need to be supportive, responsive to your needs, compassionate, intelligent, have strong working relationships with other legal counsel and the Courts for the best results.  This is a good baseline.  It also helps if that team is capable of thinking outside the box to find a solution, and in many cases, can help with student loans as well.  Many firms cannot do that.

WHY HIRE US?

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Whoo hoo, just in time to save one of our Chapter 13s with crazy high student loan balances and an ED POC that was gonna torpedo us.  Now we are going to be able to file our adversary to hopefully drastically reduce the private student debt and make our client’s life much better!
Changes relevant to consumer bankruptcy attorneys starting April 1 include:
  • 11 U.S.C. § 109(e) (debt limits for chapter 13):The unsecured debt cap has increased from $419,275 to $465,275.
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After being cancelled for last couple years, the Alexander L. Paskay Bankruptcy Seminar is a GO for March 19-21, 2022 at the Tampa Marriott Water Street in Tampa.

I am honored to have been asked to present on a panel regarding student loan strategies, tax issues and dealing with the Chapter 7 trustee.  This will also include discussion of the discharge injunction and and update on Taggart.

For our bankruptcy colleagues, I hope to see you there!!  This will be the first in person event for many of us, and vax cards or negative tests are being required for attendees to ensure a safe experience.

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$1.8 Billion Navient Settlement — Are You Included?

 

Navient-AG-Settlement-Thumbnail-yldWe’re starting 2022 off with good news. There is a $1.8 billion student loan settlement between Navient (a loan servicer) and 39 different state attorney generals.

In the settlement, Navient agreed to “refrain from informing private loan borrowers that their loans are non-dischargeable in bankruptcy.”

It’s about time! If other servicers continue to falsely advise their borrowers that bankruptcy is not an option, we may want to file a misrepresentation lawsuit and obtain damages under our consumer laws.

For an in-depth analysis, our recording on the Navient Attorney General Settlement should answer your questions.

Please subscribe to our channel when watching — this will allow us to continue to offer free content to help those in need! We’re trying to increase our viewership and hitting the “like” button and subscribing helps us a lot. As always, thank you!

In other news, we want to clarify any confusion on the start date for federal student loan payments.

For those with Direct loans or FFEL loans owned by the government, the date moved from February to May 1. If you had a FFEL loan that was in default before COVID-19, this includes you.

Do you have a FFEL loan that’s not in default or a FFEL loan that is still owned by a third party?

Even though it is a federal loan, your servicer should notify you of the start date, which is any day now.

Want to avoid making payments until May 1 and obtain any other relief that a Direct loan can offer?

Please contact us for a 1-on-1 consultation to see if consolidation makes sense for you. There are pros and cons to doing so — please only consolidate after understanding the benefits and potential pitfalls.

A final note: the number of bankruptcies appear to be rising in 2022.

Due to the end of mortgage and student loan forbearances and higher living expenses, we suspect more people will be filing for bankruptcy this year.

Don’t forget, we file bankruptcy to clear the slate when necessary, and offer assistance with mortgages and foreclosures. If you need guidance on whether this option is right for you, please book a consultation with us.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgMany folks are receiving payment notices for federal loans even before February when the Great Restart is anticipated.  Why is this?

A few months ago, Congress finally addressed the older Federal Family Education Loans (FFEL or FFELP loans), and in the expansion to the CARES Act, ensured that all defaulted FFEL loans cease collection and receive a 0% interest rate, same as the newer Direct federal loans.  In addition, any FFEL loan that went into default since March 13, 2020 would be returned to good standing.  All guarantee agencies who held these loans were to assign them to the Department of Education and it was requested that the credit bureaus remove the record of default.

Note this was only for those FFEL loans which were already defaulted, or went into default during the pandemic.

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