There are several ways to discharge federal student loans, including:
The average auto loan interest rates reported by DealerTrack are getting crazy high – hitting a decade high now:
First, and I must stress, EIDL loans are not forgivable. They were intended to help small businesses recover from the economic impacts of the Covid-19 pandemic.
However, EIDL Advance funds are like grants and do not have to be repaid.
More information is available on the SBA website: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/eidl
Under the new provisions allowing a Debtor to attest to an undue hardship, a consolidation pre-filing would be viewed as evidence of good faith – this is the box that may be checked:
Also, there could be problems if a consolidation is later done after filing as this would create a new post-petition debt that the Court may not be able to discharge effectively. As always, please consult with a bankruptcy and student loan attorney as this can get complicated and you are usually talking about a very large debt and don’t want to make any mistakes. Here’s the case law for the above assertions:
Here’s a news clip on this topic that ran yesterday: https://www.youtube.com/watch?v=77xsEU7rFM0
It’s a good short 2 minute summary of what this means and well worth a listen! I haven’t seen this in the news much and we really need to get the word out because in my 30 years of practice, I see this as finally working to discharge significant federal student loan debt.
So how are we starting on this to get our student loan and bankruptcy clients discharges in 2023?
Credit reporting is changing for medical debt. Starting July 1, 2022, previously defaulted, but subsequently repaid, medical debt will no longer be reported on someone’s credit. Next year, medical debt of less than $500 will not be reported on credit reports any longer. This doesn’t mean that the medical provider doesn’t have a claim however. It’s important to keep copies of these small medical bills and give them to your bankruptcy attorney so they can be officially discharged in your bankruptcy.
The timing can also be important. Remember, that you can only file a Chapter 7 every eight years. So if you have a medical procedure coming up that may have unexpected and you incur out-of-pocket costs, you may want to consider getting ready to file bankruptcy, but wait to actually file once you are medically cleared.
It’s often better to file a bankruptcy when you are unemployed. You don’t have to be without a job, but we’d rather you look into filing bankruptcy right after a medical procedure (so all out-of-pocket costs are discharged), but before you begin a new job.
If you have significant debt but have been told that you cannot file a Chapter 13 consumer bankruptcy, now you can file bankruptcy and not risk dismissal by the U.S. Trustees office. This change occurred because the Bankruptcy Threshold Adjustment and Technical Corrections Act was signed into law yesterday. Prior to this Act, someone with high debt was forced into a Chapter 11 — which is extraordinarily expensive and time consuming for the average consumer. A Chapter 13 is much more cost-effective and efficient to reorganize someone’s finances.
While the name of this Act is thoroughly boring, it is very practical and necessary. This Act fixes a recurring problem that has reared its head more in the past year than ever before. Student debt has reached such a high number for many borrowers, that it was actually preventing someone from filing bankruptcy to address that student debt, or even to get rid of ordinary household debt or stop a foreclosure.
Now the debt limit for an individual filing a Chapter 13 is $2.75 million and the Act also removes the distinction between secured and unsecured debt. This new law is temporary and will sunset on June 21, 2024. So basically, this means that if you wait two years to file, you will NOT receive the benefit of this debt increase and may again, be prohibited from filing bankruptcy.
Life 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?
Florida Trend just came out with its Legal Elite 2021 list on July 1 where we’re proud to be listed as one of the top 10 bankruptcy attorneys in Tampa Bay. This is not a publication that we pay for a listing — we don’t subscribe to that philosophy. We also don’t like to throw money away to be on lists.
Something I also don’t tend to harp about, we are proud to have a really good rating by Martindale-Hubbell which is an independent review by and for attorneys. We have what is called a Preeminent rating which them — there is no higher rating. Again, we don’t solicit or pay for that rating.
We believe in reviews. I use reviews when I seek out a service or product. Whatever we have to say about ourselves and our practice can usually be said much better by our clients – and in their own words. So if you are looking for a bankruptcy attorney, please check out our reviews! Then give us a call. Hope we can help.
We have five seminars that our attorneys are presenting at this month and next!
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog