Today, a client elected to have us settle her defaulted federal student loans in full by payment from her 401k. While we normally don’t recommend using protected 401k monies to settle debt, this particular client makes too much for debt forgiveness. A settlement now will likely result in 10% reduction…
An Iowa appellate court ruled recently that a Income Driven Plan with a zero payment “does not ameliorate the undue hardship”. In In re Martin, out of the Northern District in Iowa (8th Circuit) the lender argued that the debtor was not entitled to discharge the loans because she would…
Initially, twenty some years ago, I worked on the side of the student loan companies. Whenever someone in the State of Florida sought to discharge federal student loan debt in bankruptcy, I was often trial counsel for the student loan company. Our clients ranged from Sallie Mae, ECMC, TERI and…
Someone asked us recently: where does someone start to make sense of it all – when mounting student loans are crushing them and they don’t know what to do. That’s exactly where our clients stand, there is so much information out there, some accurate, some not so much, and it’s…
Desperate mother, teacher, bus driver and student loan captive for life. This is the actual signature line of a client who we are helping with her federal student loans. The short version of her story: she paid 10 years of consecutive and timely payments only to be told that she…
The New York Times today in an article titled “Education Department Unwinds Unit Investigating Fraud at For-Profits” shows a department charged with investigations of schools such as DeVry, Corinthian, Everest, ITT, IADT etc., has only three employees now that it has all but been shut down. In addition, the unit’s…
Reports have been surfacing that the Department of Education is kicking borrowers out of Income Driven Plans when they file bankruptcy. It makes no difference if they are in a Chapter 7 or 13. It also doesn’t matter if the debtor is current in their payments. The National Association of…
If you are in default on a federal student loan, one option to cure the default is to enter into a 9 or 10 month rehab plan to cure the default. This can be a paperwork nightmare, with the result ending in wage garnishment if you are not careful. Once…
Ignoring your debtor’s federal student loans in their Chapter 13 bankruptcy can have catastrophic circumstances. While fixing vehicle, credit card and mortgage debt, you may have inadvertently allowed a debtor’s $100,000 federal student loan to balloon into nearly $150,000 by doing nothing. This is because the standard procedure of the…
One lesser discussed provision of the new tax bill passed at the end of 2017 provides great news for student loan borrowers. Borrowers who have their loans canceled due to death or disability are no longer taxed for the forgiveness. This also applies to those parents who have taken out…