Calling all dog lovers! Since greyhound racing will cease to exist in the next two years, all the greyhounds will need to be re-homed. Our friend Hope just adopted this lovable greyhound named Harper and she is so sweet and loving! Contrary to popular belief, they don’t need to be run around – she’s basically a big lazy cat with lots of elbows. It’s also really neat to have both an adult dog (already potty trained and calm), who views the world through the eyes of a puppy as many things are brand new to her!
Faced with a nearly impossible standard to discharge federal student loan debt in bankruptcy due to undue hardship, creative debtors’ attorneys and the bankruptcy courts are continuing to create pockets of relief wherever possible.
Finding that “non-dischargeability does not immunize the student loan claim from modification,”a bankruptcy court confirmed the debtors’ plan under which their payments would go to the principal on their student loan debt with accumulated post-petition interest to be paid post-discharge. In re Duensing, No. 18-10201 (Bankr. D. Kans. Feb. 22, 2019).
The guarantor of the loans, ECMC, objected to the debtors’ proposed treatment of the student loan debt arguing that, because the reduction of principal would result in declining post-petition interest, the proposed plan effectively discharged her student loan without a finding of undue hardship.
Anyone with a federal HEAL student loan, should be aware that additional consequences can occur in the event of default. One of these consequences is exclusion from Medicare, Medicaid and all Federal health care programs pursuant to 42 U.S.C. Sec. 1320a-7(b)(14) for failure to pay your Health Education Assistance Loan(s) (“HEAL”).
It is possible to enter into consolidation or rehabilitation to cure a default. Then a payment plan can be set up based upon your income. If the matter has been referred to the Department of Justice, and a judgment has already been entered, then a Repayment Agreement is possible to avoid such an outcome.
In Florida, a default on federal HEAL loans may also cause the suspension of the practitioner’s license. Kinda hard to repay that student loan while unemployed. If you own your own practice, can you imagine the harm if your entire practice was shut down without warning?
On January 31, 2019, Judge Stong of the Eastern District of New York denied the Motion to Dismiss filed by SLM Corporation, Sallie Mae, Inc., Navient Solutions, LLC and Navient Credit Finance Corp. In this Memorandum Decision, the Court dealt a blow to the private student loan defendants when it permitted Plaintiff to proceed with its case (note a Motion to Dismiss is a preliminary motion and the case is far from over). In re Homaidan, Adv. Pro. No. 17-01085 (E.D. N.Y. 2019).
A nearly identical ruling was made the same day in In re Tashanna Golden, Adv. Pro. No. 17-01995 by the same Judge.
These cases dealt with Tuition Answer loans which the Plaintiff alleges are not “qualified education loan[s]” under the Bankruptcy Code Section 523(a)(8)(B), and for that reason, they were discharged in his Chapter 7 bankruptcy case. The Plaintiff argues that loans of this nature are excluded from the scope of his bankruptcy discharge and therefore any attempt to collect the debt after the bankruptcy discharge amount were impermissible and a violation of the discharge order.
Amazingly, Mark answered our 1:48 pm. email within a record 7 minutes. Closely followed by another client Kari N., only two minutes later. Feels a bit like a horse race!
The answer is: String theory for all our fellow Big Bang followers!
In what reads like a Student’s Bill of Rights, a 76 page Assurance of Voluntary Compliance, CEC must clearly and conspicuously disclose to prospective students a “Single-Page Disclosure Sheet” that contains the following information:
- the anticipated total direct cost for the program of study at the prospective campus; provided, however, that this provision shall not be interpreted to restrict CEC’s ability to change tuition, fees, or expenses;
- the median debt for completers for the program of study for the most recent reporting period, if available;
The Fair Debt Collection Practices Act (“FDCPA”) and its Florida counterpart, the Florida Consumer Collection Practices Act, (“FCCPA”) require a debt collector or creditor to cease all collection efforts once a consumer acts to preserve their rights. But you have to ask first, and in writing by sending a cease and desist.
Under 15 U.S.C. Section 1692c(c) if a consumer notifies the debt collector, in writing, to cease further communications OR if the consumer notifies the debt collector, in writing, that he or she refuses to pay the debt, the debt collector cannot communicate with the debtor, with 2 exceptions.
- (a) to advise consumer collection efforts will cease; or
A recent GAO report showed just how poor of a job that the Department of Education and its various servicers are doing in communicating and explaining options to reduce student loan debt. This is the primary reason why so many people are being declined Public Service Loan Forgiveness. So I’d like to recognize and thank employers and schools that are picking up the torch and helping to get student loan relief for their employees.
This week, Blue Pearl Veterinary Partners, allowed me the opportunity to join Ken Russell of Principal Life to help explain student loan options to their interns at their veterinary hospitals. Turns out veterinaries have doctor sized student loans but not doctor sized pay. My aunt is employed by Mercy/Methodist hospital up north which is now giving out resources to its employees to help them understand and apply for income driven plans. I commend employers who recognize that we are in a student loan crisis and have taken the time to help get needed information to their employees. This year, we also put on a seminar for upcoming graduates of University of Tampa on what to expect and how to minimize their student debt. Both employers and schools see the problem.
Relying only on the Department of Education and their array of servicers is turning out to be a miscalculation that is costing former students their future. The servicers pay their customer service employees more money to cut calls short – short call durations = bonuses. If sued, the servicers claim that they do not represent the borrowers, they represent the student loan creditors. And finally, both the servicers and the Department of Education argue that the federal Higher Education Act preempts any state consumer protection laws. We do not believe that is true and the issue is up on appeal right now in the Eleventh Circuit.
First, this client, we’ll call her Debbie, is a retired teacher who had $73,000 in Parent Plus loans. She was told two different (what I can only say were lies at this point). First, her servicer told her that if she didn’t pay her Parent Plus loans, her son would be responsible for them. Not true.
Second, even though she was a teacher, she was told that she would not qualify for Public Service Loan Forgiveness. While this may have been technically true under her former loan types, the servicer conveniently omitted the fact she could consolidate and apply for ICR in order to qualify for PSLF. Omissions are usually seen as another form of a lie. The borrower is left with the false impression that nothing can be done and they are stuck. Keep in mind that the Public Service Loan Forgiveness Program was created specifically to encourage people to obtain degrees, often expensive Masters’ degrees, and go into the lower paid education field.
It’s difficult for laypeople (and sometimes bankruptcy attorneys) to believe there are legal options to reduce student loan debt after hearing for years that “student loans are nondischargeable in bankruptcy”. Well, this is not always true. They can be discharged – or partially discharged – and brand new payment terms set up.
Take a look at a review posted yesterday of one such case by Aaron:
- Christie and her staff where very professional honest and straight to the point with my student loans! I was struggling with private loan monthly payments that I could not afford in which was affecting my credit.