Articles Posted in Surviving and Thriving Through COVID-19

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As anticipated, President Biden once again extended the forbearance on federal student loan payments to January 31, 2022.  Here is the Press Release.  Special emphasis is given that this will be the FINAL extension.

Remember, this has no effect on private student loans.

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eviction-noticeNow that we are starting to see eviction moratoriums end, I thought this was a good time to discuss how a bankruptcy can be used to gain more time if needed especially for higher wage earners that haven’t found employment yet – perhaps technology has displaced their jobs for instance. All the help wanted signs out there are usually for food service, hospitality industry jobs — not necessarily all jobs.

Tenants of single-family homes financed by the federal government are still protected through September 30.   For all others, landlords must still comply with the rules as they existed prior to the pandemic.

There are various government websites which may have emergency rental assistance – at treasury.gov search for “find rental assistance” and select your state and county.  Here is a link as well.

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busyWe have five seminars that our attorneys are presenting at this month and next!

  • Bankruptcy Updates:  COVID-19 Changes to the Bankruptcy Code – The Consumer Bankruptcy Reform Act of 2020,  April 26, 2021
  • SD FL Student Loan Program Virtual Workshop, May 10, 2021.
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bidenToday, President Joe Biden is extending a moratorium on home foreclosures for federally backed mortgages until June 30, after previously setting the expiration date at the end of March. Biden also announced the expansion of a mortgage relief program, pushing the window to request mortgage forbearance until the end of June.

You can check our resources page under “Foreclosure Related” to see if your mortgage is federally backed here.  Just type in your property address under Freddie, Fannie or MERS to discover who owns your mortgage.

For those who have private loans, there is no mandated federal moratorium.  You may be covered under a local or state moratorium though.

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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.”

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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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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.

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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.

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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.
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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.

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