We’re looking to hire a full time legal assistant if any of my legal friends know of someone who is looking. Helping people reduce their student loan debt is a very rewarding position for the right person who has great follow through and is a self starter who likes to work with little supervision (once trained of course :). Competitive salary and 401k.
We have a small office to rent in South Tampa – five minutes from downtown. Beautiful Mediterranean building (I had to google to actually spell that – lol!). Looking to rent to a solo attorney for around $450 -$500 depending upon services needed. Full service office with conference room and receptionist. Email me at christie@christiearkovich.com if interested. Address is 1520 W. Cleveland St., Tampa, FL 33606.
It’s more difficult for a creditor, including the government for federal student loans, to garnish income from someone who is self-employed — but it can be done. Once the creditor is aware that someone is self-employed, they can have a second order entered to go after non-earnings paid to the debtor. If a debtor runs his or her income through their own LLC, this can always be worked around with a second order directed toward the LLC, and then a regular wage garnishment if they are an employee, or a non-earnings order if they are an independent contractor.
The good news for someone faced with this, is that it will take time for the creditor to figure out how to reach this income – this is time that a settlement can be reached with a private creditor or a federal loan can be rehabbed to cure any default. Bankruptcy should also be considered. The bad news is if you continue to ignore it, the garnishment once it finally goes through is not limited to 15-25% of your wages, but now they can take 100%. So like many things legal, ignore a garnishment order at your own peril – even if you are self-employed.
Non-Earnings Garnishment Orders
During the financial crisis, many banks, especially Bank of America, N.A., received credit under the National Mortgage Settlement Act when they wrote off an underwater second mortgage. This was very common in Florida because many 80/20 mortgages were written around 2004-2007 and values crashed in 2008.
However, now years later, homeowners are finding out that the banks never filed the appropriate document in official records to wipe out the second mortgage: this would be called a Satisfaction. Some homeowners are unable to sell their home without now paying or otherwise resolving this released debt, or are even being sued for the debt.
It is likely that this is a violation of our consumer protection laws, specifically the FDCPA and FCCPA. These laws allow for statutory and actual damages as well as attorney’s fees. It is unknown how widespread this may become.
The Fraudsters radio show interviewed me this week for about an hour on how consumers can arm themselves and proactively protect their credit report, stop or fix violations, and obtain damages for violations under the TCPA, FDCPA, FCCPA and the FCRA. Here’s a direct link to the interview about how we can help clients with these claims to settle or eliminate debt.
From time to time, our consumer law practice here in Tampa, Fl has had to shift gears to better use our state and federal laws that protect consumers faced with debt – and the inevitable robocalls and erroneous credit reports that come with that.
The current state of robocalls is very similar to the days of emails before spam filters. With the advent of the internet, businesses don’t need expensive hardware. Anyone can start a mini call center with software that auto dials and spoofs caller IDs. Many of the calls appear local and they avoid detection as a debt collector. Small and large companies both still use predictive dialers capable of making hundreds of thousands of calls daily despite a consumer withdrawing consent to call their cell phone.
Thankfully, over the next year or two, the FCC and phone companies will implement a call certification protocol where the phone carrier can verify the caller is legitimately using the number — and Caller IDs may once again mean something!
Florida is a state that allows professional licenses to be suspended for non-payment of federal student loans. We had a client who came to us last month after having her LPN license suspended. This is even worse than a garnishment. Rather than 15% of her wages being garnished, which is difficult enough for most clients, she’s receiving NO pay. And her job could be at risk if she is replaced.
It took 2-3 weeks, but we fixed her federal student loan default, got her onto an affordable income based plan and lifted the suspension order. Fortunately, our client was able to retain her job.
Don’t wait to cure federal student loan defaults!
Today, a client elected to have us settle her defaulted federal student loans in full by payment from her 401k. While we normally don’t recommend using protected 401k monies to settle debt, this particular client makes too much for debt forgiveness. A settlement now will likely result in 10% reduction in principal and waiver of the 25% collection fees since she is in default.
While you normally cannot settle federal student loans, there is an opportunity to do so when the loans are in default and a hardship exists. So by paying them now from her 401k, she’ll likely see a 1/3 reduction in her loan balance. Put another way, that’s a 35% return!
The average interest rate on federal student loans is also 6.8%. Most people are not getting those rates with CDs, money markets, stocks and bonds. So paying off the federal loans often makes sense from this perspective as well.
An Iowa appellate court ruled recently that a Income Driven Plan with a zero payment “does not ameliorate the undue hardship”.
In In re Martin, out of the Northern District in Iowa (8th Circuit) the lender argued that the debtor was not entitled to discharge the loans because she would qualify for an income-based repayment program, or IBRP, where she would qualify for a zero payment. In 20 or 25 years, whatever is left on the loans would be forgiven, but the forgiveness could be considered taxable income.
In 20 or 25 years, the debtor would be 70 or 75 years old, and whatever savings she amassed would be consumed by the maturing tax liability. In other words, Judge Collins said, the “tax liability could wipe out all of debtor’s assets not as she is approaching retirement, but as she is in the midst of it.”
U.S. Passports Can Now Be Revoked for Unpaid Taxes — Can this Expand to Include Unpaid Federal Student Loans?
Right now no. Although there are signs that U.S. Passport holders could face a revocation of their passports in the future for defaulted federal student loans.
The reason I say this is because of a new law signed by President Obama in late 2016, implemented in 2017, and now in 2018 is beginning to effect the passports of folks with tax delinquencies.
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog