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.
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:
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:
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.
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!
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:
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.
Our ad is running in the Hillsborough Lawyer magazine today for our South Tampa Workspaces. We’d love to have any of our fellow attorneys come join us!
We write a column – that has become 1-2 pages due to all the stuff going on — called the Student Loan Sidebar in our local Cramdown publication to all bankruptcy practitioners including debtor attorneys, the creditors’ bar and our judiciary.
Because not everyone has access to this publication, we also have a copy added to our home page of our website. Here is the Spring Sidebar:
https://www.christiearkovich.com/files/student-loan-summer-2023.pdf
The United States Trustee Program (USTP) has resumed audits of individual chapter 7 and chapter 13 bankruptcy cases under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 on March 13 ,2023.
What does this mean if your case is selected?
The USTP contracts with independent firms, utilizing certified public accountants and independent licensed public accounts, to perform audits of individual chapter 7 and chapter 13 cases randomly selected by the USTP. The purpose of the audit is to determine the accuracy, veracity, and completeness of petitions, schedules, and other information required to be provided by the debtor under sections 521
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog