Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney BlogWe’re presenting at a Webinar on Tues (on demand later) for student loan update post Supreme Court decision. Cost is only $25 through PLI.
Or you could read the 427 pages of new IDR regs if you prefer 
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When do you Need an Attorney?
Can I do All This Myself or Do I Need an Attorney?
Yes, dealing with your debt is something you can do yourself. But like anything, sometimes it is better to hire someone who does this day in and day out. Particularly if you have a lot of debt or assets to protect. Many of the borrowers we speak with are unaware of key governmental programs and how to jump through the various hoops to qualify. The student loan system itself is the least transparent of any system that I have ever seen in my 30 years of practicing law. For private loans, negotiation or litigation can be involved; both of which a borrower is not well suited for in most cases. We know deadlines that may apply for tax free relief.
If it’s a bankruptcy, we know all the trustees, the rules, the loopholes, basically how to not only get things done, but also to obtain the best result.
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What is a Rule 2004 Exam in Bankruptcy and How do I prepare?
Basically, a Rule 2004 exam is just like any other deposition. In every bankruptcy case, a 341 creditors meeting is set approximately five weeks after a bankruptcy petition is filed. A 341 examination is usually short (about 15 minutes on average) and viewed as the only opportunity for a creditor, trustee or other interested person to ask questions of debtor under oath. Rather than the “only” opportunity to test the debtor on the merits of his or her case, a 341 meeting is actually only the “first” opportunity to ask a debtor questions about their financial history or other relevant matter. A much lesser used option exists to get a debtor under oath – the Rule 2004 Exam.
A 2004 exam can cover your pre-filing actions or conduct. Often a debtor’s financial condition and debts are the prime focus of the exam. Many 2004 exams are associated with a possible action to deny a bankruptcy discharge or some other adversarial case. It is more formal and often involves production of documents.
Don’t forget-under § 727(a)(3), a discharge can be denied if the debtor, “failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case…”
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Post Bankruptcy — Don’t Just Pay – Often a Collections Law Violation!
We received this inquiry today from a fellow bankruptcy attorney:
I have a client who had a Chapter 13, which due to it being a 100% plan, ended off paying off the Proof of Claim Amount at 100% in the bankruptcy.
Years later, (Insert Private Student Loan Company Here) is coming back after her arguing that during the bankruptcy, interest continued to accrue, and now she owes $3,700 in interest. In the Chapter 13 Trustee’s Final Account they paid the POC principal PLUS interest.
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U.S. Supreme Court Knocks Down the 10k – 20k Forgiveness
We’ve just learned that the U.S. Supreme court denied the 10k-20k forgiveness of federal student debt that was pending. We were expecting that. Unfortunately, most of our clients owe so much more anyway, and the other programs out there are doing so much more to get rid of this debt.
There are some things that will be coming out due to this decision that everyone should be aware of:
- Servicers are being instructed to provide borrowers a 3-month “grace” or “safety net” period during which borrowers will not be treated as delinquent if they miss payments (though interest will continue to accrue). That 3-month period may be extended.
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Florida Foreclosure Help
The FHA Covid-19 Forbearances allow for reduced or suspended payments without specific terms of repayment, for six months at a time, up to 18 months. Deadline for applications was May 11, 2023. The end of the health emergency is now over. If you’ve lost your income, job change or divorce for instance, you may have qualified for this relief.
A FHA Covid-19 Modification is called Advance Loan Modification. If a mortgage loan is in forbearance, the review will occur within 30 days of forbearance ending. For those mortgage loans are not in forbearance, if the loan is 90 plus days delinquent it must be reviewed for a modification offer on or before 10/30/2024. This is still in effect!
January 2023 new guidelines: a substantial change is that the guidance now applies for non-occupied borrowers. Some other notes:
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Confused over whether there is still Income Monitoring of Total and Permanent Disability Applications to Discharge Federal Student Loan Debt?
We’ve seen some confusion out there about whether those with disability discharges for federal student loans are required to provide income information going forward. This is because the new rule hasn’t yet gone into effect. But it will before the repayment pause ends so no worries.
The rule eliminates the three-year income monitoring requirement that too often caused borrowers to lose their discharges solely because they failed to respond to paperwork requests.
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Credit Check Step by Step
Credit reports have more errors than ever right now. Student loans, car loans, really – any kind of credit out there, is often reported inaccurately on your credit reports. It costs you nothing to have us take a look. Our Fair Credit Reporting Act cases are ALL on a contingency basis – no fees/costs unless we are successful. Our clients are netting significant settlements – money that you can use to pay off other debt – or start a family/business, whatever you’ve always wanted to do, but never had a lump sum saved to take the plunge.
Take these steps and let’s work together to get it done!
- Go to annualcreditreport.com
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Do you have a Joint Spousal Consolidation Loan?
I just became aware of a new procedure to provide “an intent to separate a joint consolidation loan” when a client received this:
As you are already aware, you and XX have a FFEL Joint Consolidation Loan. ED has indicated that FFEL Joint Consolidation Loan borrowers who take the necessary steps to separate their loans will receive the benefit of the one-time IDR account adjustment, even if the application does not become available until after the adjustment occurs in 2024. The adjustment will be applied retroactively for both borrowers when both applied to separate their joint consolidation loan. For separate applications, the remaining co-borrower who did not apply to separate the joint debt will not receive this benefit until and unless the borrower applies to consolidate the remaining loan into a Direct Consolidation Loan.
You must notify the ED Ombudsman Group of your intent to apply for separation of your joint consolidation loan by contacting ED’s Office of Federal Student Aid (FSA) at:
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Fighting Foreclosure of a HELOC?
Lenders will often try to get a note and mortgage into evidence with a simple endorsement in blank of the promissory note. This can be defeated.
The mortgage is the issue.
A mortgage follows a “note” but a mortgage does not follow a non-negotiable instrument. Since Florida Statutes Ch. 673 does not apply, the transfer of the mortgage is governed by chapter 679, which requires a written assignment. The attempted transfer of the non-negotiable instrument should be ignored.