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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgIf someone were to ask me what could be done legislatively to help student loan borrowers manage or reduce their student loan debt, I’d suggest and have suggested:

  • 1) simplification of the IDR programs- President Trump has included this in the two most recent budget proposals – one plan that fits all paying 12.5% of discretionary income for 15 yrs – but it should based upon the borrower’s income, not including their spouse;
  • 2) decrease interest rate for existing borrowers – many new federal loans are 3-4%, but many older ones are 6.8% which is high in today’s market, those with higher degrees range from 8-8.5%; and private loans are all over the place – 10-16% is not unheard of;
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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgStudent debt is no longer just a young persons’ issue. As of December 2018, approximately 8.4 million Americans aged 50 and older owe $289.5 billion in student loans, approximately 20% of total student loan debt.  This represents a 512% increase from the $47.3 billion owed by that cohort in 2004, making the growth of student loan debt among older borrowers the greatest among any age group.

A 2017 analysis by the Consumer Financial Protection Bureau reveals that from 2012 to 2017, total student loan debt for borrowers aged 60 and above increased by 72% in New Jersey, 107% in Pennsylvania, and 146% in Delaware. Many of the growing number of older borrowers face challenges that make them more reliant on their loan servicers for assistance and more vulnerable to misrepresentations by those servicers.

The data also shows that record numbers of older student loan borrowers are struggling with repayment.  Delinquency rates for student loan borrowers over 60 has jumped by 80-106% in the Northeast United States.  Typically, student loans are often a bigger problem here in the Southeast, so I would guess Florida’s delinquency rate has increased at least 100% from five years ago.  AARP reports that federal student loan borrower defaults increase with age.  In 2015, approximately 29% of federal student loan borrowers between 50 and 64 were in default; for borrowers aged 65 and above, the default rate rate rose to 37%  The default rates for those below 50 is 17% – still high unfortunately.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgIn an effort to ensure debtors receive a “fresh start” and not a “false start”, the Bankruptcy Court for the Middle District of Florida has implemented a Student Loan Management Program which utilizes a transparent portal to obtain relief from federal and private student loans.  The SLMP is an attempt to tackle the $1.5 trillion student loan debt that is currently owed by 44 million Americans.  The goals of SLMP are threefold: 1) increase communication which is presently lacking between both federal and private student loan borrowers and their servicers; 2) raise awareness among borrowers and their counsel of available options; and 3) end unnecessary and costly forbearance during bankruptcy.  The SLMP will start October 1, 2019.

Rather than simply leaving these loans on hold to accrue capitalizing interest in a Chapter 13, the SLMP is designed to enhance communication and availability of available options and end needless forbearance which causes larger loan balances.  For instance, a Debtor who owes $100,000.00 in student loans with an interest rate of 8% ends up owing over $148,000.00 after a five-year plan if the loan is simply put on hold.  The Portal is also designed to accommodate settlements of private student loans via a mediation.  The automatic stay will be lifted as to matters addressed via the portal.

In a similar vein, in 2010, the MDFL implemented a Mortgage Modification Program to assist debtors in seeking mortgage modification. The MMM program uses a portal to exchange documentation and communicate with mortgage servicers. It has been a great success, has reduced litigation and is recommended by mortgage creditors as a “model” for bankruptcy loss mitigation programs. It has been duplicated in many bankruptcy courts across the country and has saved thousands of borrowers from homelessness.

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bk-vetOn Friday, August 23, 2019 President Trump signed H.R. 2938, the “Honoring American Veterans in Extreme Need Act of 2019” or the “HAVEN Act,” into law. HAVEN Act excludes from the calculation of monthly income, for purposes of the Bankruptcy Code’s means test, certain benefits paid by the Department of Veterans Affairs and the Department of Defense. The law takes effect immediately.

Additionally, the President also signed into law: 1) H.R. 2336, the “Family Farmer Relief Act of 2019”; 2) H.R. 3304, the “National Guard and Reservists Debt Relief Extension Act of 2019”; and 3) H.R. 3311, the “Small Business Reorganization Act of 2019″.

For a quick summary:  please see this announcement.

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error-not-foundIf you happen to have Ocwen as a mortgage servicer (or former servicer), you may have an excellent reason to challenge their books.  Check out this quote from an Eleventh Circuit Court of Appeals case out this week in University of Puerto Rico Retirement System et al v. Ocwen et al.

“Unfortunately for Ocwen, REALServicing didn’t really work—the software, as it turned out, was incapable of properly tracking borrowers’ accounts and payments, and it recorded inaccurate information about interest, late fees, escrow accounts, or completed payments for up to 90% of the loans in the system.”

90% of their loans were not properly accounted for!  Wow that’s pretty bad!

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgWhile I don’t generally post our client reviews, there are times where I simply can’t help myself.  This one in particular shows the difference between having an advocate on your side versus getting your information from the student loan servicer — who by the way represents the creditor only.  They do NOT represent the borrower.

Nothing short of FANTASTIC!!

5.0 stars
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cell-phone-handI thought I’d take a minute to share common defenses faced by consumer lawyers such as myself — and help arm consumers with just how and what they should say to stop the calls.

First, a debt collector will always deny that you ever revoked consent to call.  They will argue that you did not provide enough personal identifying information for them to verify and therefore they could not process the DO NOT CALL request.

Second, they will argue that the consumer did not specify which number he or she did not want the calls made to.

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Judges-District-Tampa-Student-Loan-Portal-Presentation
Who are all these people?  People who want to put an end to the student loan crisis.  Most are Bankruptcy Judges from the Middle, Southern and Northern Districts.  The rest are us committee members who helped to put in place a new Student Loan Modification Program which goes into effect September 1, 2019 for the Middle District of Florida.

As I like to put it, the idea behind the Student Loan Modification program is to: 1) increase communication between bankruptcy debtors and student loan servicers; 2) increase awareness of various options available to reduce student loan debt; and 3) end the needless forbearance and accrual of yet more debt in bankruptcy by providing easier access and instructions for federal programs as well as mediation opportunities for private student loans.

I have a few trainings scheduled in the near future for other bankruptcy attorneys who have requested this:

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robocallsHow many of us no longer answer our cell phone?  With all the caller ID spoofing/disguising nowadays, most people I know don’t answer, opting instead for the caller to leave a voice message.  This ensures they want to talk to the caller, and then they call back.  The caller may do the same.  I’m no different.  Until someone is added into my address book, they don’t exist.  Wasted time returning calls and listening to voice messages abounds.

Wouldn’t you like to see things turn around – and help make our cell phones useful for calls again?

The House just passed a near-unanimous bipartisan vote on the strongest anti-robocall legislation in decades.  Everyone is sick of robocalls it seems.  The Stopping Bad Robocalls Act now heads to the Senate, where similar but less comprehensive legislation was passed.  But robocallers are hard at work lobbying Senators to scrap parts of the House legislation and significantly weaken its consumer protections.  The consumer bar needs you to weigh in and insist the Senate keep key parts of the House rule intact to effectively stop unwanted robocalls.

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A 529 account and/or a Florida Pre-paid account is a no brainer.  A 529 account is NEVER taxed.  As long as you use the money for educational expenses, the gains from bond interest, stock dividends and stock appreciation is never taxed.  You can easily set up an account through Vanguard or Fidelity.  The 2019 changes for maximum contributions are located at the Vanguard link.

The definition of educational purposes is fairly broad and includes room and board, fees, books, supplies, equipment, computer hardware and software, and internet access and related services.

Also, parents can now use a 529 for private K-12.

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