Now that debt collectors are back and moratoriums are falling away, this is a good opportunity to remind Florida consumers about limitations that bind debt collectors. Basically, things they may do or say that could get them into trouble, and give you recourse to sue or settle or more favorable terms. So what do we look for?
Due to heavy demand, the CPAAcadmy is doing a video rebroadcast today at 10:00 of a Webinar course I did for them last month for those who help others try to reduce or get rid of student loan debt.
I also have a link to this on my website available anytime (audio only unfortunately).
So if you have an hour, your might want to tune it at 10:00 for the rebroadcast today!
Wrapping up another busy week with student loan discharges in bankruptcy and forgiveness under the disability program. Hosted an excellent presentation for Tampa Bay Bankruptcy Bar Association attorneys on the new procedures for small business reorganizations by Amy Denton Harris, a shareholder with Stichter, Riedel, Blain & Postler, P.A. and Guy Van Baalen, an Assistant U.S. Trustee with the Tampa U.S. Trustee’s office.
The highlight of the week was a webinar presentation I did for CPAacademy titled “Helping Your Clients Take Their Lives Back From Their Student Loans“. I’d like to thank the 580 people who signed up even during the busy tax season with extensions expiring in just a few days.
I just have to share a few of the testimonials (all five stars except one four star who would have liked to seen a bit longer presentation!) to encourage you to watch and learn (or reach out to us to finally do something about your student loan debt):
I’m usually reluctant to talk much about pending bills recently introduced because so much can happen before a bill becomes a law. Remember that cartoon with the little bill walking from place to place? Wow, that dates me a bit.
But odds are something along these lines will get passed this year in part as COVID 19 relief: Student Borrower Bankruptcy Relief Act of 2019 and Protecting Homeowners in Bankruptcy Act of 2020 – the bill markups are found here.
If you have private student loans, we don’t need to wait for Congress. We frequently can discharge those private, high interest loans right now. If you’ve filed a bankruptcy if the past, we can reopen your case (as long as the bankruptcy pre-dates the loans themselves) and wipe the deck clear of many, if not most, private student loans.
If you have private student loan debt, do yourself a favor and listen to our latest podcast “How To Discharge Student Loans During Covid-19“. And then call me.
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.
A proposed court settlement between the Trump administration and defrauded borrowers is in jeopardy after the administration revealed its widespread denials of requests for student debt cancellation for those who attended schools who lied to them in order to get them to attend, the Washington Post reported recently.
The settlement required that borrowers who were still awaiting a decision on their Borrower Defense to Repayment (“BDTR”) application after 18 months would get 30 percent of their federal loans discharged for every month that the department is late, and those who are denied reserve the right to an appeal. Not surprisingly, as a result, we have seen mass denials this summer. I personally have seen around ten outright denials – no specifics, just a general denial of failure to state a claim. I have seen two approvals – but these were only for 10% of the principal and waiver of interest during the review period. A drop in the bucket.
This reminds me of the FTC lawsuit against DeVry. They had them dead to rights with written misrepresentations in their marketing material regarding job placement rates. The settlement? Everyone got checks. The problem was the checks were only for around $500. For screwing up someone’s life forever.
This recent 10th Circuit case, McDaniel v. Navient, has gotten a lot of press among those in the student loan arena when it paved the way for discharge of 200k of private student loans. But what does it really mean?
First, here is what wasn’t addressed in this case. Navient admitted that 523(a)(8) (a) (i) (government or non-profit lender/guarantor) and (b) (cost of attendance) didn’t apply. In other words, they agreed that the loans were not guaranteed by a non-profit, and were outside the cost of attendance – so neither argument would prevent a discharge.
Instead, Navient hung its hat on the loans being covered under the “educational benefit” under (a) (ii). But Navient lost. The McDaniel case is consistent with the 9th Circuit BAP case In re Kashikar as far as the determination that educational loans do not equate educational benefit under (A)(ii). The 5th Circuit in In re Crocker found the same thing last fall.
Pop quiz: which option below is more likely going to END your student loan debt?
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog