Articles Posted in Student loans

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YAY — Bloomberg posted this tonight at 9:02 p.m.  I couldn’t be happier about Secretary DeVos resigning from the Department of Education.  It is well known that she has been a thorn in student loan advocates’ sides for quite some time!

It’s too early to tell what exactly all the changes will be, but I imagine they will be numerous.  Stay tuned and please follow us on Facebook or Twitter (see above buttons) or subscribe to our blog for a play by play…

Christie Arkovich

 

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgHow do you feel about discharging student loan debt in bankruptcy?

The American Bar Institute (ABI) Consumer Bankruptcy Committee conducted a poll on what changes would attendees like to make to student loan discharges that I found interesting:

10%    Recommended no changes – leave it as it is

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As the owner of a small bankruptcy law practice in Tampa, Florida, we were often thought of as the epicenter of the great recession and foreclosure crisis back in 2008-2012.

One thing that always made a big impression on me, was the number of people who genuinely believed and tried their very best to catch up with their bills once they became re-employed.  These were folks who unfortunately had to run up their credit cards when not working, only to encounter high interest rates and an inability to catch up and actually pay down the balance even after they got a good paying job.  Then I had to tell them that they could no longer file a Chapter 7 – the full bankruptcy.  Instead, they were limited to filing a Chapter 13 – and partially or even worse, fully repaying the debt.  Now this doesn’t always happen, but if you’re making 80k, are single and filing bankruptcy, it could.  And often did.

Don’t be this person.  Consult a bankruptcy attorney if you’ve had to run up your credit cards or incur a pile of debt whether medical expenses, unpaid rent, etc.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThe question as to whether the private student loans were incurred “solely to pay qualified education expenses” under 26 U.S.C. Section 221(d)(1) is where these cases are won or lost.

In Conti v. Arrowood Indemnity Co., No. 20-1172 (6th Cir. 12/14/20), the Court affirmed a bankruptcy court’s judgment against the borrower, and refused to consider arguments that were not raised at the trial court level.

Why is Conti decision important?  Two reasons.  First, it put a lot of emphasis on the purpose of the loans – as opposed to their actual use.  Court vary on this approach and it may depend upon where you live as to what approach is used by your courts.  Second, the Sixth Circuit emphasized the need to fully flesh out all available legal arguments and facts at the trial court level.

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bdtrDespite Secretary DeVos summarily denying virtually every Borrower Defense to Repayment application that was ever filed under her watch, don’t give up hope!

The Judge in Sweet v. DeVos just ruled that Secretary DeVos must give prior notice to the Court before denying any more borrower defense claims from student loan borrowers cheated by their school.  The court had threatened to enjoin the agency from issuing borrower defense denials, which prompted the Department of Education to stop voluntarily.

Now that the the tide of denials has stopped, the key is whether the Judge will vacate the tens of thousands of denials that were sent to 94% of borrower defense applicants since June 2019.  The class members have asked the Judge for an injunction and to vacate the prior denials – and is taking depositions now of officials with the Department of Education.

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pslfGood news.  There’s lots of money left in TEPSLF.  700 million was appropriated and as of September 2020, only about 87.5 million had been discharged under TEPSLF.  There is a new form here: https://studentaid.gov/sites/default/files/public-service-application-for-forgiveness.pdf.

Under the new form, you don’t have to apply for regular PSLF first, be denied, and then apply for TEPSLF.  And even more important, as I read the new form, you don’t have to wait until 10 years to determine if your prior “wrong plan payments such as those under the Graduated or Extended Plans” counts or not.  That is huge for someone wanting to make life decisions about whether to remain in PSLF a few more months/years for the win — or bail and start perhaps a higher income position in the private world or start their own business!

What is TEPSLF?  This is the fund that Congress set up to help those who were in the wrong payment plan so their student loan payment didn’t count toward Public Service Loan Forgiveness.  It does not fix the FFEL loan versus Direct loan fiasco.

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Miller-SL-facetime-11-24
Join us tomorrow at noon EST/ 11:00 CST for a Facetime Interview between Jamie (Miller and Miller in Wisconsin) and Christie (Christie D. Arkovich, P.A. in Florida) as we discuss why NO ONE should feel compelled to return to work right now, just to be able to pay their student loans.

There are new avenues to say “Goodbye” to both federal and private student loans in many situations!  Things that everyday people and even your average bankruptcy attorney have no idea about!  NONE of these things we are doing for clients right now involve a future Act of Congress.  None.

“A lot of people, even some of the lawyers who represent consumers, thought for years that you really shouldn’t even try because there’s not a chance you’ll win, but I think everyone is looking at it now with sort of a fresh look,” says John Rao, an attorney with the National Consumer Law Center.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpg
Are you tired of endlessly paying on your student loans, only to see no headway at all being made?

I wrote this article for our local Cramdown publication for Tampa Bay attorney advocates and bankruptcy attorneys – these are tips that everyone should know about and ask their advocate for assistance with.  Don’t rely only on your servicer in other words.  Contact us if you’d like to know more about this.  These tips are designed to SAVE YOU MONEY and instead COST THEM MONEY.  This is kinda long, but the best tips are near the end, so please keep reading, it’ll be the best thing you’ll read all year if you have student loan debt!

The CARES Act signed into law on March 27, 2020 (the “Act”), provided for forbearance and interest waiver for all Direct Loans that are owned by the federal government.  Older Federal Family Education Loans (“FFEL”) were not protected by the Act, but the Department of Education encouraged servicers of these federal loans to take similar actions to relieve borrowers of the need to make payments during the pandemic.  Those with Perkins loans or private loans also were not protected from interest accrual or the need to make payments and this resulted in a patchwork of forbearances and other temporary payment relief.

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CPAacademy-logoWrapping up another busy week with student loan discharges in bankruptcy and forgiveness under the disability program.  Hosted an excellent presentation for Tampa Bay Bankruptcy Bar Association attorneys on the new procedures for small business reorganizations by Amy Denton Harris, a shareholder with Stichter, Riedel, Blain & Postler, P.A. and Guy Van Baalen, an Assistant U.S. Trustee with the Tampa U.S. Trustee’s office.

The highlight of the week was a webinar presentation I did for CPAacademy titled “Helping Your Clients Take Their Lives Back From Their Student Loans“.  I’d like to thank the 580 people who signed up even during the busy tax season with extensions expiring in just a few days.

I just have to share a few of the testimonials (all five stars except one four star who would have liked to seen a bit longer presentation!) to encourage you to watch and learn (or reach out to us to finally do something about your student loan debt):

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