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FDCPAFirst off, to be covered under the Fair Debt Collection Practices Act, the debt must be a consumer debt.

  • i.e. not a business debt.
  • Examples are credit cards used for personal/household items; a home loan, a student loan, a phone bill/utility bill, dishonored personal check, rent etc.
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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThere is a separate process from the Social Security Administration’s process that is available through NelNet to discharge federal student loans (no matter who the servicer is).  It’s called a Total and Permanent Disability Application.  The good news is that it has been taking our firm only about two months to obtain this 100% discharge of student loans.  It’s also tax free for any applications approved prior to 2025.  After that, it will depend upon whether the program’s tax forgiveness waiver is extended by Congress.

A couple critical issues arise when filing these applications.  First, is the need to get it right the first time around — in other words don’t file a half-%$$ application and expect it to be approved by the Department of Education.  Second, many jobs nowadays are performed remotely and at all hours of the day or night.  So an employer’s inability to reasonably accommodate an employee under the Americans with Disabilities Act may need to be explored and included as a supplement to the TPD application.  Third, you can work, although at a minimal level and earning no more than the poverty level for a family of two.

This begs the question:  how much work can be performed, but yet qualify as being unable to engage in “substantial gainful activity”.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgWe often hear from clients who have tried to dispute, settle or otherwise get rid of student loan debt — with little results except for hours upon hours of telephone conversations with reps.  Consider hiring a student loan attorney to help you.  This review was posted by a happy client just yesterday!  Three months and she’s now debt free!

Years of stress and debt dismissed

5.0 stars

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgThe TEPSLF was established for public service employees who had the correct loans, Direct loans, but were making a payment under a non-income driven plan – such as Extended, a 20-30 yr Standard, Graduated etc.  They key is you have to apply for PSLF, be denied, and then submit a second request to the TEPSLF as follows:

TEPSLF forgives debt for borrowers who meet the following requirements:

  • Have at least 10 years of full-time work experience for a qualifying non-profit or government employer
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SL-mapThis is a pretty cool map that shows the southeastern U.S. as ground zero for the student loan crisis.  Most all of Florida shows this to be a High, Very High or Extremely High debt level according to this map.

I’m glad our bankruptcy court for the Middle District of Florida is taking this very important step to implement a new Student Loan Management Program for all debtors in Tampa, Orlando, Jacksonville and Ocala – and surrounding areas in between.  The program goes live on October 1 — and anyone who is a debtor in a pending case is eligible for this relief, as well as all future debtors!

Please reach out to us if you want to know more about the student loan program now being offered by our bankruptcy court.  We are also available to co-counsel on any cases with bankruptcy counsel who may be unfamiliar with the options available under this program.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgIf someone were to ask me what could be done legislatively to help student loan borrowers manage or reduce their student loan debt, I’d suggest and have suggested:

  • 1) simplification of the IDR programs- President Trump has included this in the two most recent budget proposals – one plan that fits all paying 12.5% of discretionary income for 15 yrs – but it should based upon the borrower’s income, not including their spouse;
  • 2) decrease interest rate for existing borrowers – many new federal loans are 3-4%, but many older ones are 6.8% which is high in today’s market, those with higher degrees range from 8-8.5%; and private loans are all over the place – 10-16% is not unheard of;
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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgStudent debt is no longer just a young persons’ issue. As of December 2018, approximately 8.4 million Americans aged 50 and older owe $289.5 billion in student loans, approximately 20% of total student loan debt.  This represents a 512% increase from the $47.3 billion owed by that cohort in 2004, making the growth of student loan debt among older borrowers the greatest among any age group.

A 2017 analysis by the Consumer Financial Protection Bureau reveals that from 2012 to 2017, total student loan debt for borrowers aged 60 and above increased by 72% in New Jersey, 107% in Pennsylvania, and 146% in Delaware. Many of the growing number of older borrowers face challenges that make them more reliant on their loan servicers for assistance and more vulnerable to misrepresentations by those servicers.

The data also shows that record numbers of older student loan borrowers are struggling with repayment.  Delinquency rates for student loan borrowers over 60 has jumped by 80-106% in the Northeast United States.  Typically, student loans are often a bigger problem here in the Southeast, so I would guess Florida’s delinquency rate has increased at least 100% from five years ago.  AARP reports that federal student loan borrower defaults increase with age.  In 2015, approximately 29% of federal student loan borrowers between 50 and 64 were in default; for borrowers aged 65 and above, the default rate rate rose to 37%  The default rates for those below 50 is 17% – still high unfortunately.

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https://www.tampabankruptcylawyerblog.com/wp-content/uploads/sites/10/2015/07/christie_d._arkovich_p.a_1_small.jpgIn an effort to ensure debtors receive a “fresh start” and not a “false start”, the Bankruptcy Court for the Middle District of Florida has implemented a Student Loan Management Program which utilizes a transparent portal to obtain relief from federal and private student loans.  The SLMP is an attempt to tackle the $1.5 trillion student loan debt that is currently owed by 44 million Americans.  The goals of SLMP are threefold: 1) increase communication which is presently lacking between both federal and private student loan borrowers and their servicers; 2) raise awareness among borrowers and their counsel of available options; and 3) end unnecessary and costly forbearance during bankruptcy.  The SLMP will start October 1, 2019.

Rather than simply leaving these loans on hold to accrue capitalizing interest in a Chapter 13, the SLMP is designed to enhance communication and availability of available options and end needless forbearance which causes larger loan balances.  For instance, a Debtor who owes $100,000.00 in student loans with an interest rate of 8% ends up owing over $148,000.00 after a five-year plan if the loan is simply put on hold.  The Portal is also designed to accommodate settlements of private student loans via a mediation.  The automatic stay will be lifted as to matters addressed via the portal.

In a similar vein, in 2010, the MDFL implemented a Mortgage Modification Program to assist debtors in seeking mortgage modification. The MMM program uses a portal to exchange documentation and communicate with mortgage servicers. It has been a great success, has reduced litigation and is recommended by mortgage creditors as a “model” for bankruptcy loss mitigation programs. It has been duplicated in many bankruptcy courts across the country and has saved thousands of borrowers from homelessness.

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bk-vetOn Friday, August 23, 2019 President Trump signed H.R. 2938, the “Honoring American Veterans in Extreme Need Act of 2019” or the “HAVEN Act,” into law. HAVEN Act excludes from the calculation of monthly income, for purposes of the Bankruptcy Code’s means test, certain benefits paid by the Department of Veterans Affairs and the Department of Defense. The law takes effect immediately.

Additionally, the President also signed into law: 1) H.R. 2336, the “Family Farmer Relief Act of 2019”; 2) H.R. 3304, the “National Guard and Reservists Debt Relief Extension Act of 2019”; and 3) H.R. 3311, the “Small Business Reorganization Act of 2019″.

For a quick summary:  please see this announcement.

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error-not-foundIf you happen to have Ocwen as a mortgage servicer (or former servicer), you may have an excellent reason to challenge their books.  Check out this quote from an Eleventh Circuit Court of Appeals case out this week in University of Puerto Rico Retirement System et al v. Ocwen et al.

“Unfortunately for Ocwen, REALServicing didn’t really work—the software, as it turned out, was incapable of properly tracking borrowers’ accounts and payments, and it recorded inaccurate information about interest, late fees, escrow accounts, or completed payments for up to 90% of the loans in the system.”

90% of their loans were not properly accounted for!  Wow that’s pretty bad!

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