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penny-hoarderMost everyone has heard of the forbearance on student loan payments until September 30, 2020 due to COVID-19 – but like everything, there are nuances to this.  I was fortunate to be interviewed to participate in Tiffany Connors’ very insightful article, 5 Questions to Ask Before Deciding if Student Loan Forbearance Can Help You” for the PennyHoarder which went up today.

Lots of good advice on whether forbearance applies to your loans, and the pros and cons of accepting it.  I’ve been following PennyHoarder for years and it’s a great publication for those wanting to become debt free and live an independent life!  In fact, I’m typing this blog now while camping at Fort DeSoto in Pinellas County, Florida – my husband is out paddle boarding but since it’s near 90 out at noon, I’d really rather be doing this!  But I do like looking out over the water!

Also there are more helpful tips on using the CARES Act to help manage your student loans appear in our past few blogs if you’d like to scroll back through a few.

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money-talks-1010I was super pleased to be interviewed recently on the radio show Money Talks.  In our 4/29/20 radio interview, we spent approximately 30 minutes covering some things people can do to address debt during COVID-19.  This includes student loan and mortgage forbearances and limitations under the CARES Act, discharging private student loans in bankruptcy, protecting and restructuring debt in a small business Chapter 11 under new rules and on and on.  Take a listen.  Maybe you’ll learn something you didn’t know before and can make this time work for you to reduce debt.

Please check out our News page where this interview is linked.

 

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small-business-openAs a small-business owner, you may have been especially hard-hit by the recent global health crisis. When revenue drops unexpectedly, it can be hard to keep a small business afloat.

At Christie D. Arkovich, P.A., we understand what you are going through. We are committed to helping you reduce your debts and regain control of your finances while keeping your doors open.

Our attorneys have many years of bankruptcy experience, including Chapter 11 cases of all types.  One of our attorneys also has an MBA, and her on the ground experience has helped many businesses over the years get back on their feet.

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heroes-actWe’ve been advocating for the Public Service Loan Forgiveness (“PSLF”) to be fixed for a few years now.  Our class action lawsuit against Navient went nowhere, but the one against Great Lakes has been commended for a ruling last month by the 11th Circuit to help hold federal student loan servicers accountable when they talk to their borrowers:  like how their loans would be impacted by various programs for instance.  Something you’d expect a servicer to get right.  So when a servicer tells someone that their payments count toward PSLF, you can rely on that.

It’s now possible that Congress may work to fix the very serious problem where not all federal loans are treated the same.  Fixing this via legislation will impact a whole lot more borrowers than individual or even class action lawsuits.

Enter the proposed HEROES Act which would address problems with the Public Service Loan Forgiveness (PSLF) program, which allows qualifying public servants to get their federal student loans forgiven after 10 years of repayment. Currently, only Direct federal student loans are eligible for forgiveness under the PSLF program. Borrowers who have commercially-held FFEL-program federal student loans and Perkins loans do not qualify unless they consolidate those loans via the federal Direct consolidation program. By consolidating, however, they would erase any progress towards the 10 year repayment period and would effectively be starting over. The HEROES Act would allow payments made prior to consolidation to count towards PSLF.

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CARES-ACT

Webinar: Why you should care about the CARES Act

May 20, 2020 at Noon

 

The Tampa Bay Bankruptcy Bar Association will be hosting a FREE Webinar via Zoom on May 20, 2020 from 12:00 to 1:30pm. Why you should care about the CARES Act and its impact on Student Loans, Foreclosure, Collection, and Consumer and Business Bankruptcy. Christie Arkovich, Jake Blanchard, Nicole Mariani Noel and Chapter 13 Trustee, Kelly Remick, will discuss provisions of the stimulus bill that expand or create options for Debtors in Chapter 13 cases as well as Small Business Debtors under Subchapter V and many more. Panelists will also discuss foreclosure, forbearance, collection and student loan impacts. No cost to attend. This will be a live webinar and will not be recorded. Register here.

Couldn’t come at a better time now that things are hoppin’ a bit more!  I encourage our colleagues to register for local insight to help represent our clients the best we can in these trying times

 

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this-way-that-wayIt can be risky to reaffirm a mortgage in a bankruptcy, particularly when the property is underwater (worth less than what is owed), or you may need to move and sell quickly.  A reaffirmation agreement puts you back on the hook to pay for the full amount of the mortgage, including interest, taxes, insurance, foreclosure fees and costs after a bankruptcy, if you elect to keep the home.  Why would someone ever sign one of these?  Well, most mortgage companies do not report payments being made on a non-reaffirmed mortgage.  So how do you avoid the risk, while at the same time, benefit from timely payments being made which rebuilds credit?

SELF REPORTING MORTGAGE PAYMENTS

WHEN YOUR LOAN WAS NOT REAFFIRMED

The bankruptcy code does not require that you reaffirm, or sign a court order agreeing to continue the payments on your mortgage. But unless you are surrendering your house, you will want to continue paying because the house will eventually be foreclosed if you do not.

Mortgage companies will not report your payments to the three major credit reporting agencies (Experian, TransUnion, and Equifax) if you have not reaffirmed. It is possible, nonetheless, to still get your payment history included in your credit report, as follows:

  1. Request a payment history from the mortgage company. (The mortgage company is required by law to provide one every year free of charge.) There is no special form – just call your mortgage company and be persistent.
  2. File a dispute with the three credit reporting agencies, attaching a copy of the payment history.
  3. The credit reporting agency is required to verify the accuracy of the debt with the mortgage company within 30 days.
  4. At that point, the mortgage company can either:
  • Remain silent – the credit reporting agency must accept the information you provided; or
  • Accurately report information. The mortgage company would be hard pressed to explain how a payment history it prepared was inaccurate.
  • Repeat this process on a regular basis, to update the information.

Additionally, you should keep the payment history, since that can be provided to anyone you’re applying to for new credit.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThere a few unanswered questions regarding the roll out of federal student loan borrower protections provided by the CARES Act.

The Student Borrower Protection Center and the National Consumer Law Center have combined forces and raised certain concerns to Secretary DeVos in a letter today that can be found here.

Clarifications are being made to the Paycheck Protection Program which have encouraged, in particular large cap, public companies, with access to other funds, to return funds that were meant for small business.  Perhaps the attached recommended consumer guidance will encourage the Department of Education to clarify and extend borrower protections where necessary as well.

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debt-collection-covid-19I’ve written quite a bit recently about the Department of Education’s recent announcements to halt the accrual of interest and collections of certain federal loans.  Direct Loans and some FFEL loans are automatically being placed in forbearance until September 30, 2020.

Importantly, these COVID-19 related protections do not apply to all loans – private loans, Perkins Loans and commercially held FFEL loans will continue to accrue interest, and they can continue to collect.

But there are still debt collection limitations that apply particularly during this time of national emergency:

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pelosiAs an attorney, if I accept representation for two clients but I only zealously advocate for one while throwing the other to the wolves, I would be subjected to discipline by the Florida Bar and likely sued.  Banks better hope when they accepted PPP applications, that they reviewed them fairly.

Despite the meme above, my beef is with the big banks on this one!

 

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgFalse information provided by federal student loan servicers applying the CARES Act may also lead to liability in light of a recent case allowing public service employees to seek PSLF relief after being misinformed about the applicability of the law.

A recent Forbes article noted our PSLF case’s potential impact.  “Student loan borrowers have scored another victory against a student loan servicer for unfair and deceptive practices. And the impact of this decision could be far-reaching.”

Lawson-Ross et al vs. Great Lakes Higher Education Corp., No. 18-14490 (11th Cir. 2020) involved two of our PSLF clients.  In this three year long battle, we worked with class and appellate counsel (attorneys Katherine Yanes, Dan Zibel, Brian Shrader and Gus Centrone) who did a fantastic job!  This should be helpful for any state consumer law violation – the Higher Educ Act does not preempt state consumer FCCPA/FDCPA claims for affirmative misrepresentations.  This was not a failure to disclose case.  It revolved around a servicer accused of giving false information.  See pages 18-19 for detailed analysis of the difference of a servicer providing false information when asked about a forgiveness program and a failure to disclose.

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