Yes, it’s a holiday weekend and I’m not quite sure why a local consumer group JEDTI is doing their 2nd Annual Convention today, but it is about a 100 degrees out and I think I’d melt outdoors anyway so why not?
JEDTI was originally made up of mostly foreclosure defense attorneys, and this is how I came to be a part of the group several years back. It was amazing the knowledge this group imparted and I am forever grateful to be a member.
Now that the foreclosure crisis is for the most part behind us, JEDTI has morphed into other consumer protection areas including robocalls under the TCPA, fair debt collection violations, credit repair and reporting violations under the FCRA — and now perhaps student loans if they like what I have to say.
I constantly hear from clients who wished they had learned of our firm earlier and how student loan attorneys are hard to find. Our client reviews show the kinds of results that can be obtained with an attorney by their side.
Student loan work can be both easy and hard. There are innumerable situations and various ways to reduce debt. Some of our work is routine, other parts are very complex. I spoke with a U.S. Attorney yesterday on an unusual case where we are trying to take apart a Joint Spousal Consolidation loan – and we were commiserating on the backwoods theories I’d chosen – Mandamus, Due Process, Rescission etc. Some I was practically making up as I go – trying to remember esoteric causes of action from law school over 25 years ago.
Fortunately, as a business model goes, most of our cases are pretty ordinary, at least to us.
Here is one case study I intend to use in our presentation “Student Loans Should Not Be A Life Sentence” today:
- Client comes to you with $300,000 in student loans – half is federal, half is private. Client obtained a Chapter 7 discharge in 2011. Client is married and makes $40,000, wife makes $75,000, two kids.
- 10 yr standard payment on federal loans is $1,726 – over 25 yrs it would be $1,041.
- Private loans are an additional $1,500 a month.
- Solution –
- Put client on IBR for fed loans at $29, file separate tax returns.
- Reopen Chapter 7 bankruptcy, file adversary, likely cut private debt in half to $75,000 or less – no interest. Payment plan of $428 for 25 yrs without interest.
- No 1099 b/c the excess private debt (principal and interest) was discharged in bankruptcy.
- Payment on $300,000 loans goes from $3,000 to $500.
Now imagine what this client can do with $2,500 extra in disposable income AND they are getting rid of this debt once and for all. Student loans are designed nowadays to last a lifetime. There are no plans on the horizon for the federal government to address this student loan crisis. Student loan debt now exceeds both vehicle and credit card debt combined — and those unable to pay their loans are nearing 40% (including those in forbearance or deferment where the bill will become due soon!).
Creative solutions are needed by attorneys to solve this crisis for their clients and to ensure that student loans do not become a life sentence.
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