Articles Posted in Student loans

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgOne of our student loan attorney colleagues, Austin Smith, is the guiding force behind a class action filed in Texas that is pending:  In re: Evan Brian Haas and Michael Shahbazi v. Navient Solutions, LLC and Navient Credit Finance Corporation.  It may affect our Florida clients with private student loans as it is seeking a nationwide class.

I understand that postcards are now being sent out to potential claimants.  While this class action is still in its infancy and has not yet been certified there are important things you should know right now about this:

  1. First and foremost, the info below will tell you what the case is about and how to be a part of it.
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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgMatt Taibbi of the Rolling Stones just published a very enlightening piece “The Great College Loan Swindle” today.  He explains just how universities, banks, and the government turned student loan debt into America’s next financial bubble — or as a client called it this week a “nightmare”.

He highlights a student who very nearly committed suicide over overwhelming student loan debt incurred at age 19.  The spiral of debt began  with colleges telling everyone who could, to go to school and get a college degree to remain competitive in today’s marketplace.  That a high school diploma is no longer enough.  But if everyone goes to college, this simply means that a bachelor’s degree is the equivalent of a high school degree 10 years ago.  Kind of like 50 is the new 40.

Parents not wanting to stand in the way of their child’s future, either paid out the nose or went into debt themselves by signing Parent Plus loans.  Kids were pressured to sign loan applications electronically semester after semester.  The students we spoke with did not receive paper copies of the applications they signed.  No one really knew what the total balance would turn out to be.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgParent Plus loans continue to be a big problem.  Not only are the consumers unable to pay the loans that were taken out for their children, they are continuing to not take advantage of plans that would allow them to pay less without hurting their credit.

Case in point: (As an aside, this client found me by googling “student loan nightmare”.  Sad, but true.)

One client I met with this week received a statement from her FedLoan servicer that the amount due was now $542.88.  On an income of $35,000 with a husband unable to work, our client simply could not afford that.  When she called her servicer, she was informed that she did not qualify for income based repayment and her only option once she came off forbearance was to pay $542.88.  But we can lower her payment by more than 50%!  And once she retires, her payment can likely go to zero.

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How can a bankruptcy help reduce your student loan debt?

We’ve been making great strides in obtaining student loan debt relief in bankruptcy lately.  Most people think only of whether their student loans can be discharged in bankruptcy.  Usually the answer is “no”.  But that’s not where the focus should be in most cases.

Our goal is simple:   reduce student loan debt to manageable and sustainable levels with an end in sight.  We do this for both our bankruptcy and non-bankruptcy clients.  This may include discharging some private student loans in bankruptcy.  It may include taking advantage of all income based/debt forgiveness opportunities for federal loans, both in and outside of bankruptcy.  Just selecting the right program can make a huge difference.  At least half the clients who come and see us are in the wrong program costing them hundreds more per month in some cases.  Public service loan forgiveness is a huge mess.  New grounds exist to object to private debt owned by NCSLT that can be used to strike their debt – called proofs of claim — in bankruptcy.  All this can add up to hundreds of dollars of savings per month, and possibly tens or more thousands of dollars over a Chapter 13 bankruptcy plan.

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you-got-this-fist-bumpThis could easily be you!  This is a word-for-word review posted this week by a satisfied student loan client:

Christie Arkovich and her team changed my life for the better. I went to her stressed because I couldn’t afford my monster student loan payment any longer (and getting a deferment or forbearance would give me temporary relief, but my already huge monthly payment would go up over 60% after the two year term). Christie assured me there were other alternatives and ended up getting my monthly payment reduced by an astonishing 88% AND emancipating me from having to deal with awful, %#@$ Navient. The process was very smooth, easy and inexpensive (she even offers a payment plan). If you are in despair over your student loans, give her a call – seriously. I’m NOT stressed about my loan for the first time in over ten years, it’s incredible – thank you, Christie!!!

Own your Student Loans — Rather than Owing them.

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I’ve blogged about the new CFPB Consent Orders here, against both NCSLT and TSI which requires a halt to all collection activities for the vast majority of NCSLT trusts for private student loans, but what might it mean for pending bankruptcies?

First, the Consent Orders require the payment of millions of dollars in damages in some cases, so Schedule B must reflect the possibility of recovery against NCT, collectors and law firms.  It may be awhile before the Judge signs off on the Proposed Judgment due to several Motions to Intervene filed by various involved parties on the collection side.  But the Agreed Consent Order itself makes certain admissions of liability in the meantime.

The debt should be listed as disputed pending outcome of an audit (required to be completed within 180 days for accounts currently in litigation, within 365 days for all other accounts).

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgAre you being sued by NCSLT as many of our clients are?

You should be aware that the CFPB just entered an Order requiring NCSLT to halt collections per the NYT.  The Consent Order is effective immediately although the Judgment itself still needs to be approved and signed by the Delaware Judge.

This “halting of collections” is most assuredly temporary.  The trusts “must suspend all further collection efforts until a compliance plan has been approved and implemented.”  It’s unknown how long that may take.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgFirst, don’t give up.  You may have numerous defenses available – we are a law firm that helps student loan borrowers.

Don’t let them get a default judgment against you where they can garnish 25% of wages and seize your bank accounts.  Over 90% of these cases go to default judgment.  Judgments last 20 years.  They are normally bankruptcy proof.  This does not need to happen.

There are many ways to defend these cases and we can help!  Some or all of these defenses may be applicable to your case:

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Hurricane Irma has caused an interruption in income for many people in Florida and elsewhere.  This information may be helpful for those who cannot make their mortgage or student loan payment when due:

For those in a rehab agreement on federal student loans to avoid wage garnishment:

Payments to Rehabilitate Defaulted Loans (§674.39).  During the time a borrower is affected by a disaster, an institution should not treat any scheduled payment the borrower fails to make as a missed payment in the stream of nine on-time, consecutive, monthly payments required for the borrower to rehabilitate the defaulted loan.  When the borrower is no longer affected by the disaster, the required sequence of qualifying payments may resume at the point at which it was discontinued.

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Debtors are presently denied the opportunity to participate in income driven plans in a Chapter 13 bankruptcy in most of Florida.  Instead of allowing for an income based plan, the federal government places these loans in forbearance for the typical five year plan.  Do you know what happens to a federal student loan in forbearance for five years?  It balloons from 100k to 150k.  How does that help to provide a fresh start?

We are attacking this unfairness now in a case we are spearheading in Tampa, Florida.  Our client is being denied participation in IBR and Public Service Loan Forgiveness by the DOE’s policy.  The time is ripe for our Tampa Judges to address this.  While we undertake this challenge, the model plan which does not address this problem is up for revisions and there is comment period which expires August 31.

If you want to help us in our battle for student loan relief, please take 30 seconds to post a comment here before 8/31: http://pacer.flmb.uscourts.gov/localrules/comments-with-form.asp.  Just say something like it is unfair for debtors to be disallowed from participating in governmental income based/debt forgiveness plans just because they file bankruptcy.

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