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Whoo Hoo!  In a class action Sweet v. Cardona, the parties, including the Department of Education, have just announced a settlement of Borrower Defense to Repayment claims (“BDTR”).  It’s still early, and we don’t yet know if this settlement will be approved by the Court or if some of the named schools will oppose it.  We anticipate that the listed schools who are still in business will oppose the settlement or petition to have their school removed from the presumptive list.  Here is a copy of the filed settlement agreement.  So while this isn’t final, it’s certainly a huge step in the likely direction of where these BDTR applications are headed.  It’s been a long time coming, and will result in much needed relief for student loan borrowers.

What should you know?  Well, first of all, here is a list of schools that are presently in line for a full discharge.

For a FAQ, please go here.   One of the parties who has been instrumental in obtaining this settlement, the Project on Predatory Student Lending, has prepared detailed questions and answers for those who attended these schools or have allegations of fraud under the BDTR program.

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camp-lejeuneA close friend’s husband was diagnosed with a rare form of leukemia several years ago.  Little did we know at the time that it was quite likely due to his early childhood spent at Camp LeJeune.  I learned that his mother used to mix his baby formula with water which came from the base’s water treatment facility.  No one knew at that time from the early 50s to late 80s, the drinking water supply at the Camp LeJeune Marine Corps base in North Carolina was heavily contaminated with toxic, carcinogenic chemicals.  The levels of toxicity were thousands of times higher than the maximum safe limits set by the EPA.

After many medical procedures and seemingly truckloads of medications later, my friend’s husband, is still among us; however, his life trajectory is much different now.  Same with his family.  A new normal one might say.

I’ve been reading up on the subject a lot over the past few days.  I’ve learned that many, if not most, individuals who have lived at Camp LeJeune at some point in their lives, have not had the opportunity to even try and show culpability or obtain damages for the litany of health problems that have plagued them throughout the many years.  This is because the government typically has sovereign immunity protection where it cannot be sued.  Even when water contamination at Camp LeJeune is expected to be one of the worst cases, if not the worst contamination event in the history of the United States.  Also, how do you prove causation over forty years?

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A mortgage servicer called a “furnisher” for purposes of credit reporting is responsible for updates to a borrower’s credit report.  Many times following a foreclosure, there is a limited time for the lender to seek a deficiency judgment.  Here is Florida it is one year.  If a year goes by, and the lender fails to seek a deficiency judgment then it waives the amount it is still owed after the foreclosure sale of a home.

Here’s the good news:  If a lender fails to report a deficiency as having been eliminated, discharged or abolished, it is then reporting inaccurate information.  This inaccurate reporting opens the door to the furnisher’s liability under the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681 et seq., (the “FCRA”) per the Ninth Circuit (California) in a recent case.  Gross v. CitiMortgage, Inc., 20-17160 (9th Cir. May 16, 2022).

This case is being compared to a leading contempt case, where the Supreme Court in Midland Funding  LLC v. Johnson, 137 S.Ct. 1407, (2017) found that a debt collector who filed a proof of claim in a bankruptcy that was obviously barred by the statute of limitations did NOT engage in false, deceptive, misleading, unconscionable, or unfair conduct so there was no violation of the Fair Debt Collection Practices Act.  While this decision involved a different set of circumstances and a different law, it is clear that these two views could be considered as inconsistent.

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I’m happy to say that we are starting to see Navient refund checks coming in!  A client today received a check for $13,795 which represents payments he had made on a Navient private student loan after June 30, 2021.  The remaining balance on these loans were forgiven per the Navient Attorney General settlement.

If you have questions about the Navient AG settlement, please watch and subscribe to our video:  https://www.youtube.com/watch?v=0m5rmBoj8eg

A FAQ is located here as well:  https://navientagsettlement.com/Common-Questions?portalid=0.

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We’ve made the difficult decision to not take any further clients who have requested assistance in filing Borrower Defense to Repayment applications.  Importantly, it is NOT because the program itself won’t result in possible full forgiveness, we still expect that for many borrowers, but it is taking a longgg time.  If you have filed a BDTR application, go here and click Manage my Application to find any updates on its processing:  https://studentaid.gov/borrower-defense/.

We’ll still be doing all of our other student loan stuff, just not the BDTR applications.

Mostly our decision to not offer assistance in filing BDTR applications is because the Department of Education’s procedures have tied our hands.  We can no longer file the applications online like we used to be able to do.  Even reviewing the PDF draft applications hasn’t been working well because the application itself when forwarded by the client to our office does not always convey the information to view, many of the text boxes are blank unless and until the application form itself is revised per Adobe to correctly retain the data.  It took our IT company some time to figure that out and only the Department of Education can modify their application.

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inflationLife Isn’t Meant to be Lived Paycheck to Paycheck

I know there’s been lots of press about the 8.5% inflation rate that was announced this week.

I also know that many people don’t believe that number.  Why not?

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PSLF-
Here’s a link to the video.  Please subscribe so we can continue to offer this information free to everyone!  Thank you!

We are happy to share our thoughts on the new Public Service Loan Forgiveness Waiver announced last month.  It truly will fix most all of the problems with the PSLF program and we have already seen many clients benefit!

I was asked to present a webinar for the Florida Bar this week and over 500 people registered.  That’s a 10x of their usual number of 50.  Lots of demand to understand a new and important way to forgive student loan debt.  And you have until October 31, 2022 to act.  While that may seem like a long time away, a year goes by fast and why wait.  Why not get this done now and be done with these loans if you’ve already made 120 payments but found that many if not most never qualified.  They are likely to qualify now, provided you worked full time for a government agency or a qualifying non-profit.

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map-internationalWe’ve been getting more questions lately from folks who have taken out U.S. loans (both federal and private) but now may live or work overseas.  Saudia Arabia today, someone from Turkey last week.  We can certainly advise these borrowers what action they can take under the new Public Service rules, discuss collection limitations, statutes of limitations etc.  We welcome your calls, just set a consult with us.

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file-cabsIn our quest to update our law office to provide South Tampa Workspaces to other attorneys, we have approximately 12 file cabinets to donate or find a good home for – most are the really nice lateral ones.  All shapes, sizes and number of drawers.

Any takers?

If so, call or email our office and speak with Sandra (813) 258-2808 or Sandra@christiearkovich.com to arrange a visit or get more photos.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThere’s a lesser discussed requirement for TEPSLF: If the borrower is not in an IDR plan at the time they apply for TEPSLF, the previous 12 months of payments and the last payment made have to be at least as much as they would have paid in an IDR plan.  If they weren’t, the borrower would have to make potentially higher payments for a year in an IDR plan before they rec’d forgiveness.

However, if the borrower has been in the Covid Forbearance since March 2020 and they filed for TEPSLF now, they would meet that requirement because everything has been set to $0. They would need to file before the Covid Forbearance is over (1/31/2022) to avoid this issue with TEPSLF.

Also Note: The PSLF Temporary Waiver makes TEPSLF unnecessary for now as all repayment plans are eligible.  If a borrower wasn’t ready for TEPSLF until after 1/31/2022, they may be eligible through the Waiver.

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