Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog
This week I received an email from a borrower who believed that she didn’t have to make her private student loan payments due to COVID and the CARES Act.
Not true. While many private lenders have indeed voluntarily agreed to forbearance of two to six months per a recent Wall Street Journal article, “For Student-Loan Borrowers, There is Some Relief – but That Isn’t the Whole Story“. The article emphasized that these are uncertain times for all student loan borrowers, but especially those with private loans.
First, these short forbearances are coming to an end and decisions will need to be made.
“Private student-loan borrowers have no protections. They are at the mercy of the lender, which leaves many high and dry, between a rock and a hard place,” says Josh Cohen, a student-loan attorney who practices in Connecticut and Vermont.
I’ll summarize the various possible outcomes the WSJ described that could range from 1) a reduced payment option; 2) interest only payments; 3) refinance for better terms (but a borrower would need good credit and a steady job); 4) settlement (in writing preferably approved by an attorney to ensure it survives the transfer of the account to a new debt collector in a few months); 5) filing bankruptcy to discharge medical or credit card debt leaving more funds to pay private student loans.
I’d like to point out that an exceptionally good option that many of our clients have been electing per our advice was not addressed in this article. It’s hard to explain, even to attorneys, so I’m not surprised. Here in Tampa, Florida, it’s well known that during COVID, I’m promoting the option to clear the deck of private student loan debt in a bankruptcy (while income is non-existent or cut 10-20%).
I’m about to post a podcast on this. Rather than repeating it all here, take a listen, it’s amazing stuff and most importantly, it simply works.
Lastly, read our reviews, and talk to me.
