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arkovich_law-narrowHome sellers and home buyers are likely both waiting for some kind of change in the financing markets right now.

Those homeowners locked in with low rates do not wish to sell, but cannot maintain a standard of living with their current income and increased expenses.  They may not qualify for an equity loan due to tighter credit conditions in the marketplace.  So they believe they are stuck and face mounting credit card debt.

Same with home buyers essentially, although for different reasons.  Mortgage rates above 6%, limited home inventory on the market, and now a limit to the marketability of mortgage bonds will place even more pressure on mortgage rates even if the Fed pauses the interest rates per the Wall Street Journal in its article today “How the Bank Mess Can Hit Home Buyers“.  This will limit home sales for those who are not cash buyers.

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arkovich_law-narrowStuck in a timeshare (or nowadays they are called vacation clubs or vacation ownership plans) you can’t get out of?  You can get rid of a timeshare in a bankruptcy.  If the timeshare is a contract agreement for points etc., then the contract can be rejected as an executory contract.  If the timeshare is a secured interest (and many are), then you can provide in a Chapter 13 Plan to revest the title to the timeshare company/lender and they get it back.

For example, the Order Confirming Plan would provide for recording purposes:

Pursuant to 11 U.S.C. Sections 1322(b) (8) & (9), title to said property shall vest in Wyndham Vacation Resorts, Inc.  Wyndham Vacation Resorts may file an unsecured claim for any resulting deficiency that may exist.  Confirmation of this plan shall constitute a deed of reconveyance to this property upon recording with the XX County Recorder.

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arkovich_law-narrowSomething going around one of the listserves I monitor daily is how debt settlement or debt consolidation companies are a sham.

The facts for this one:  (by the way, the client provided a copy of the written agreement to the attorney so the fees and proposed settlement amounts were verified)

The Debtor placed $54,000 with the debt settlement company.  The estimated settlement amount was $27,500 and the debt settlement company charged a fee of $12,500.  The settlement would cost them $40,000 on a $54,000 debt.  Plus this would be a taxable forgiveness, so the Debtor would receive a 1099-C for $27,500.  Why would anyone agree to this nonsense??

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Christie_1The new DOJ Guidance to discharge federal student loans in bankruptcy creates presumptions that the inability to repay a federal student loan will persist if:

  • The debtor is 65 or older;
  • The debtor has a disability or injury impacting income potential;
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Christie_1Turns out yes.  I just read a pretty cool story in the New Yorker about a 91 year old lady, perfectly healthy, obtained a full forgiveness under a “compromise and settlement authority” provided for under the Higher Education Act of 1965.  Although it is a last ditch effort as there are many other ways to obtain forgiveness now.

There is an easier way.  The IDR Waiver program will allow for someone like this to consolidate their older federal loans to Direct Loans (provided this is done before May 1, 2023), and after 20 years of repayment all undergrad loans would be forgiven.  25 years for grad loans.  I believe this lady would have qualified for that as well – although I don’t have access to her loan history to know for certain.

But if you miss that May 1 deadline, or the IDR Waiver, TPD, BDTR or PSLF don’t fit your circumstances for some reason, then this is a way out – used mostly when the Department of Education believes it would be more costly to collect the loan, or when it cannot locate the original promissory note.

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Christie_1What is the IDR Waiver?

The Short Version:  if you have an older FFEL loan, even a prior FFEL Consolidation Loan, make sure to consolidate this to a newer Direct Loan asap if you want all of the relief this program allows (contact us if you have any doubts or concerns about losing prior IDR time, interest rate increases, effects on PSLF etc.)  While the deadline to do so is May 1, the servicers are busy and it doesn’t pay to wait until the deadline!!

For many years, student loan servicers steered struggling borrowers into forbearance instead of guiding them toward income driven repayment.  Income driven payment generally caps payments at no more than 10 percent of income, and ultimately leads to loan forgiveness after 20 or 25 years of repayment.  Many of these loan servicers also failed to accurately track borrowers’ progress toward forgiveness.  Some of these companies had no system for tracking payments and identifying when borrowers would qualify for forgiveness.

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Christie_1Did you realize that we have free videos on what to do about your student loan on our YouTube Channel “Student Loan Sidebar”?  Here’s a post from a few hours ago from one of our followers:
  • YouTube videos on student loan forgiveness have just been absolutely amazing. They break it down so it simple to understand. This whole thing has been so frustrating and these videos help to alleviate much of the anxiety I’ve had. Thank you! 
David Lafont
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arkovich_law-narrowConsumer complaints in Florida have a few things going for them that can make them easy to prove.

One of the things that benefits Florida consumers is our use of the “least sophisticated” debtor test.

What does this actually mean?

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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

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Christie_1I had a consult recently that is a good overview of what questions our clients have and how we are able to drill down to the essentials and help determine the best path forward to ending student loan debt.  This client reached out to us after viewing one of our Youtube Student Loan Sidebars where we go over the practical impact of new programs and what we see out there to help student loan borrowers.

Client:  300k SL debt, mostly Direct, 23k FFEL.  Client has a pending consolidation app.

Key concern:  How does IDR impact me?  Did PSLF Help Tool but still confused.

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