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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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Our firm was instrumental in the filing of several class actions in Florida against Navient and Great Lakes for our clients who believed they were accruing time toward public service loan forgiveness — when it turns out their loans were not eligible.  The kicker is all they needed to do was move their loans from the FFEL program to the Direct program.  But this information was never provided by their loan servicer and they now have to start from scratch.  Don’t let this be you:  contact us or a knowledgeable student loan attorney for a check up RIGHT NOW.  Make sure you are on track with these student loans.

Further information about the PSLF program, see our website here.  If you doubt what we can do to help reduce student loan debt, check out our reviews for what our clients are saying.  Do you need a student loan lawyer? 

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341-meeting
All debtors must appear at a meeting called the “341 meeting of creditors”.  Creditors may, but usually do not appear, and it is the Trustee asking most of the questions.  This 341 must occur for a bankruptcy to be successful and applies in both a Chapter 7 and 13.

The trustee will first verify your identity.  While this sounds simple, you must bring an original social security card or an original government issued document that shows your full social security number.  You’d be surprised at how many people think they know where they keep their original SSN card, but can’t find it when they are in a hurry about to leave to the 341 meeting.  So look for it early.  The meeting cannot be held without that documentation.

Also, make sure that your driver’s license has the exact name that is listed on your petition for bankruptcy.  If it is different, you’ll likely need to amend your petition to show that name and any other iterations of your legal name that you may use (“a/k/a”).

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After experiencing the dreaded foreclosure or bankruptcy, you might worry that mortgage lenders will reject you when you attempt to buy another home. Anxiety over, “Will they think it’ll happen again and not give me a chance?” is perfectly logical. Luckily, you have no need to worry. Buying a home after bankruptcy is still a real possibility.

Foreclosure or Bankruptcy is Not the End of Homeownership

While your foreclosure did mean the loss of your first home, it will not thwart your ability to buy a new one. Mortgage programs today all include guidelines for those who’ve experienced bankruptcy to qualify. There are several ways you can recover from your setback.

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bankruptcy
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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boarded-up-house
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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stop-debt-harassmentThere are limits as to when a student loan servicer can contact someone other than the borrower.  They cannot call the borrower’s place of employment if the borrower asks them not to.  They cannot robocall the borrower’s cell phone when the borrower asks them not to.  They cannot discuss the debt with a third party.  They cannot contact the debtor when the debtor has retained legal counsel.  These are all very clear rules proscribed by the Fair Debt Collection Practices Act (“FDCPA”) and its Florida counterpart, the Florida Consumer Collection Practices Act (“FCCPA”) or the Telephone Consumer Protection Act (“TCPA”).

One quirk that I’d like to see how widespread it is, involves student loan servicer contacts with the debtor’s family members after the debtor has retained counsel.  In this particular instance, the contact involves asking for contact info for the debtor as well as their employment info.  At that time, the student loan servicer knows how to reach the debtor.  They know all contact regarding the debt is to go through legal counsel.  So why contact a reference or family member pretending they don’t know how to reach the debtor.  And ask for employment information from this relative.

There are two sub-sections of the FCCPA in play on this question:

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Are you a teacher?  A police officer?  A fire-fighter?  Work in any capacity for local, state or federal government or a non-profit?

Having doubts about whether your federal student loans are going to be forgiven after ten years of public service?  Join the club.  Here are five things you should know to make sure your loans are indeed forgiven after 10 years:

  • Make sure your loans are Direct Loans and not the older FFEL loans.
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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgWe’ve been spending quite of bit of time lately researching all the ins and outs of Public Service Loan Forgiveness (“PSLF”).  One of the issues that has caught our attention is the failure to communicate to FFEL borrowers the need to consolidate their loans to the newer Direct loans and THEREAFTER make 120 timely monthly payments.  Many people have never been informed of this requirement to consolidate to Direct Loans, and have wasted many years of their life making payments that do not count toward PSLF.  Many are finding this out now.  After they’ve already worked in public service for years.

I’d like to hear from student loan borrowers about how they heard of the need to consolidate to Direct for PSLF eligibility, and when they learned of this.  There appears to be a gap – the FINAL RULE implemented by the DOE on July 1, 2009 lays out a counseling requirement where this is to be discussed with students during an exit interview with the school.  But what about the ones who already graduated?  It wasn’t added to the Master FFEL Promissory Note until late 2009/early 2010.  So any borrower who graduated prior to mid 2009 would not have known of this requirement from the school, nor from the note they signed.  The PSLF was passed into law by the College Cost Reduction and Access Act of 2007 by President Bush to provide indebted professionals a way out of their federal student loans by working full-time in public service.  In 2007, many banks loaned money to borrowers under the FFEL program which provided for a federal guarantee in the event of default.  Three quarters of schools provided access to FFEL loans, while Direct loans were offered in only one-quarter of schools.  So in 2007, these banks began to inform their borrowers of this new legal path toward forgiveness.  Three quarters of these borrowers had FFEL loans which did not qualify.  At that time there were no forms to fill out, no applications to submit.  Borrowers were given a payment amount and told to make timely payments for 120 months and then apply.  The DOE doesn’t even have a final application ready yet – it is expected in September 2017.

In November 2011, FedLoan Servicing was awarded the contract to service borrowers eligible for PSLF.  But unless a borrower had somehow heard of the certification process to inquire about potential eligibility that began in January 2012, their loans would not have been serviced by FedLoan.  Loan servicing could have been provided by any of the originating banks or their servicers such as Navient, Sallie Mae, Nelnet or Great Lakes.  What steps did any of these parties take to educate their borrowers about the PSLF requirements?  What steps did the DOE take to ensure FFEL borrowers were aware of this limitation other than publication on its website for borrowers prior to the new Master Promissory Note in late 2009/2010?  Did the lenders have a financial incentive not to notify borrowers and thereby reduce their profitable loan portfolio?

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