Articles Posted in Surviving and Thriving Through COVID-19

Published on:

stimulusLet’s be frank.  If you have more than $10,000 unsecured debt, it may be better to use any stimulus monies to discharge all of your unsecured debt by filing a chapter 7 bankruptcy, rather than simply put it toward the interest that continues to accrue.

If this is your best option, there is good news.  The new stimulus bill provides that this money will not be considered property of the bankruptcy, nor will it count against your income.

The most recent stimulus payments under the new stimulus bill (Consolidated Appropriation Act) are not property of the estate under temporary Code § 541(b)(11) enacted under the CCA.  They are also excluded from CMI under the original CARES Act, at least until March 27, 2021.  After March 27, until Dec. 27, 2021 when the CCA provisions sunset, you might argue that they are not disposable income under a separate amendment to the Internal Revenue Code enacted under the CCA (adds new 26 U.S.C. § 6428A) by providing that “no applicable payment shall be subject to, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.”

Published on:

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.

Published on:

credit-circle
Did you know that simply having a mix of accounts is 10% of your overall credit score?!

A mix of accounts can show that you know how to manage all types of credit.  It is good to have a history of repaying an installment loan, such as a car or student loan, but a revolving account, such as a credit card, demonstrates more clearly that you can responsibly manage credit because you have to control how much you charge and pay each month.

It’s easy to ask a creditor to increase your credit line on an account as well – this way the unused balance will be larger which also helps.

Published on:

https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThis week I received an email from a borrower who believed that she didn’t have to make her private student loan payments due to COVID and the CARES Act.

Not true.  While many private lenders have indeed voluntarily agreed to forbearance of two to six months per a recent Wall Street Journal article, “For Student-Loan Borrowers, There is Some Relief – but That Isn’t the Whole Story“.  The article emphasized that these are uncertain times for all student loan borrowers, but especially those with private loans.

First, these short forbearances are coming to an end and decisions will need to be made.

Published on:

TBBBAThe TBBBA is entering the Zoom age for the Consumer Lunches starting at Noon August 4 and continuing the first Tuesday of every month. The Zoom coordinates will be sent later in a TBBBA email blast.
It’s bring your own lunch – but no commute! CLE credit.
First up is: The Intersection of Bankruptcy and Tenant rights: Monetizing FDCPA and FCCPA claims for tenants.
Published on:

main-street-fundsAlong with the PPP (Payroll Protection Program) another fed run program rolled out this week called Main Street to provide low-cost loans to firms with fewer than 15,000 workers.  The Main Street launch has received a luke warm welcome from community banks due to the paperwork required per an American Bankruptcy Institute article today, but basically the lender has a 95% backstop from the federal government in event of default.

I wonder why the lukewarm interest from community banks?  My guess is that they much prefer PPP for their clients, which is a 100% forgiveable loan, and has been extended recently to allow for forgiveness for 24 weeks of payroll rather than just eight, for those businesses who were under shut down orders for the first couple months and couldn’t bring back their workers.  Since PPP funds are still available and the application deadline is not until the end of June, of course that sounds like a much better alternative.  Plus, we have found that community banks did a far better job than larger banks in getting approvals from the SBA.

But for those who need funds that will be spent for things not covered under PPP, this may be an excellent alternative.

Published on:

facemask-mortgage-relief-covidSome creditors and loan servicers are jumping the gun in pursuing foreclosures, HOA liens, COA liens.  The federal government is also taking the position that it’s okay to pursue cases already in litigation.  We had to file a motion to abate arguing that the moratorium preventing involuntary collection activity includes cases already in litigation — which is well supported by case law.

None of these things should happening while the moratoriums are still in place.  For mortgages and tenant evictions in Florida, that means we are in a holding pattern until July 2 when the foreclosure and eviction moratorium is set to expire.  This includes actions on other liens as well.  Florida Statute Section 702.09 defines mortgages to include HOA and COA liens so they have to put things in park, same as other traditional mortgages.

It also appears that certain banks are not honoring mandatory forbearance requirements — if you have received any messages, letters or phone calls re: SPECIAL FORBEARANCE options, please reach out to us asap to help make sure that this goes smoothly.

Published on:

small-business-tables-occupied
Given the current global health crisis, many small businesses will now be needing the assistance of a Ch. 11 bankruptcy in order to stay in business.

Small businesses often struggle to reorganize effectively under Chapter 11 of the Bankruptcy Code. To address this issue, Congress passed the Small Business Reorganization Act of 2019, effective February 2020. The Act aims to make small business bankruptcies faster and less expensive, thereby making Ch. 11 a viable option for small businesses who previously could not afford to take advantage of Ch. 11 reorganization.

The Act applies to business debtors with secured and unsecured debts totaling less than $2,725,625. However, the CARES Act temporarily increased the debt limit to $7.5 million for cases filed on or before March 27, 2021 – so for the next full year.

Published on:

Covid-CARES-ActThe CARES Act was designed to help protect consumers’ credit reports from the massive job loss and economic harm caused by COVID-19 business shutdowns.  The idea is to ensure that someone’s credit is not impacted by a temporary inability to pay bills.  While the CARES Act is helpful for this, there are a couple gaping holes as explained below that will not protect everyone’s credit during these times.

Basically, this Act added a new subparagraph (F) to 15 U.S.C. Section 1681s-2(a)(1) of the Fair Credit Reporting Act (“FCRA”).  This applies for anything that is a credit obligation including credit cards, auto debt, medical debt, home mortgages etc.

These temporary protections are only in effect for 120 days from March 27, 2020.  A couple areas of concern are in bold below:

Published on:

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.

Contact Information