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Christie_1Despite lots of changes in the landscape allowing the discharge of both federal and private student loan debt under the right circumstances, many people still believe that student debt survives a bankruptcy.

Private loans follow very different rules then federal as you probably know.

One thing I haven’t written much about are private loans for these vocational schools such as those for coding, helicopter, cosmetology etc.  If the school is NOT on the federal Title IV list for the years of attendance, those are dischargeable in a bankruptcy.

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Christie_1Most people I speak with about the disability discharge of federal student loans are concerned that the test is similar to the Social Security Disability analysis.  It’s not.  You don’t have to deal with a scale of whether you can feed or dress yourself.  You don’t have to be approved for SSD.

It’s a vocational test.  Something we’ve dealt with often with our ADA or FMLA work for our former plaintiffs’ employment law practice.

The TPD standard doesn’t mean the borrower can’t work at all, it just means that due to their medical condition(s), they can’t reasonably work enough to be able to sustain themselves. 

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Christie_1Are you having trouble with your federal student loan servicer who is asking for  income documentation?  You can avoid all that for now, by simply self-certifying your income.  You can self certify through February 29, 2024 and here is how:

https://studentaid.gov/help-center/answers/article/report-income-in-the-income-driven-repayment-application

https://studentaid.gov/help-center/answers/article/report-income-in-the-income-driven-repayment-application

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arkovich_law-narrowWhat should you do if you are being harassed for a debt that you did not sign for?  Here are some ideas:

  • If you acted as a power of attorney (POA) for another, the creditor is likely violating several consumer statutes for unlawfully collecting a debt against you.  We can help with that!
  • Most identify theft cases stem from a family member.  Depending upon the circumstances, you may want to file a police report, and send a copy of it to the creditor.
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Now that the real property market is at it’s high, we are seeing many more second mortgages seemingly coming out of the woodwork.  Despite years of inactivity, including no communications with a borrower, second mortgages are now threatening foreclosure if payments aren’t resumed to them.  What can you do if you hear from a second mortgage which you thought was charged off, included in a government settlement back during the foreclosure/financial crisis, discharged in bankruptcy or maybe included in a prior loan mod?

Besides filing a Consumer Financial Protection Bureau complaint, which we recommend, there are a number of defenses that we utilize to prevent a foreclosure.  The first involves raising federal statutory protections which require notice to the borrower of transfer of ownership, transfer of servicing and periodic statements.  Failure to comply with any of those requirements under the Truth in Lending Act (“TILA”), and the Real Estate Settlement Procedure Act (“RESPA”) can create statutory and actual damages.

Bankruptcy may present options to either pay off the second mortgage under terms you can afford, or even strip it off the property in the right circumstances.  You can challenge the amounts owed by objecting to any proofs of claim filed in a bankruptcy.  You can also surrender the house and discharge any remaining debt.

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Christie_1To help get the word out on how to obtain significant savings on federal student loans, we are speaking at a roundtable for the Florida Defense Lawyers Association on December 14.

Sponsored by: The FDLA Women in the Law Committee. Maximize your opportunities for student loan forgiveness by taking advantage of the new IDR Audit, SAVE, and On Ramp programs. While the IDR Audit is automatic, there are ways you should prepare for it to obtain the most forgiveness particularly if you have older FFEL loans, gaps between education, or even Parent Plus loans. Don’t try and figure it out all alone! (This is roundtable discussion with no CLE or CE offered.)

I don’t think you have to be a current FDLA member, but you may want to consider joining, and you do need a Fl Bar number.

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Christie_1If you have federal student loans, the Income Contingent Repayment (“ICR”) is the most expensive Income Driven Repayment Plan or IDR:

  • 20% of your discretionary income, or
  • the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
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Christie_1I just wrapped up an interview for badcredit.org for a story that they will run sometime in Nov or early December about the new rules allowing someone to discharge student loans in bankruptcy.  I’ll post links here when that story is ready.

Bottom line is that there is a growing awareness that private student loans can often be discharged in a bankruptcy as a non-education loan.  You’d be surprised at the results that we see!  Often a full discharge, or getting the balances dropped by 50-70% and interest reduced from 10-15% to 1-2%.  Very small payments spread over 20 or even more years.  And the kicker is that any discharge in bankruptcy is tax free forgiveness.  Who wouldn’t want to kick their private student loan to the curb…

But what about federal student loans?  In the past, we simply did not file these cases – it was nearly impossible to win a discharge of federal student loans.  I used to work for the other side running around the State of Florida trying these cases.  I think I lost one down in Miami.  One.  All the rest resulted in a win for the creditor (my client at that time before I moved to the consumer side of things).  But now since the new DOJ process is available, it is finally possible, if not probable.  Here’s the new results – see for yourself:

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arkovich_law-narrowHave you received a verbal forbearance of your mortgage payment?  But nothing else?  Mortgage servicers have certain responsibilities by law.  If you have received a verbal approval of your mortgage forbearance, but haven’t received anything in writing confirming this, not to mention advising what terms are, payment restart date etc. you have recourse under various consumer laws.

Reg X 1024.41(c)(2)(iii) requires a servicer to confirm the terms of the forbearance in a written notice sent to the borrower promptly after the forbearance is granted.  A servicer is also required to continue to send periodic statements while you are in forbearance at least until the effective date of any servicing transfer to another party.

If you have questions about your mortgage, and how to catch up or reduce your payments via a forbearance, loan modification or even a Chapter 13 bankruptcy, please consider reaching out to us.  Also, it’s often far cheaper to address problems early if you can and you may have more options the earlier you reach out.

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I saw today that WeWork filed bankruptcy and is terminating many of its leases.  If you or anyone you know is in need of a new “home” we have new and professional office shares in South Tampa for attorneys or other professionals.  Our space is a little different from most in that all of our offices have doors, and we understand what legal professionals need.  For instance, there is someone at the office to greet clients – and we are owner occupied.SouthTampaWorkspace1More photos and information is available on our website www.southtampaworkspaces.com.  You can also email us at info@southtampaworkspaces.com.

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