Desperate mother, teacher, bus driver and student loan captive for life.
This is the actual signature line of a client who we are helping with her federal student loans.
The short version of her story: she paid 10 years of consecutive and timely payments only to be told that she had to start all over again with ANOTHER 10 years of payments simply because she had the wrong loan type — and NO ONE at her servicer ever told her this.
How much is too much? Unfortunately, the Fair Debt Collection Practices Act and its Florida counterpart do not specify a particular number of calls per day that a creditor can make when trying to collect a debt.
An older Florida case is somewhat illustrative in finding the answer. In Story v. J.M. Fields, Inc., 343 So. 2d 675, 677 (Fla. 1st DCA 1977), the Court looked at what conduct was considered harassing, such as: a) the frequency of the creditor’s calls; b) the number of calls; c) the time of day when calls were received (whether during normal business hours); and d) whether the purpose of the calls was appropriate, such as calling to i) remind the debtor of the debt; ii) determine the reasons for non-payment; iii) discuss a plan for making payments.
My rule of thumb that I like to use is if a creditor calls in the morning and talks with you, and then calls again the same day, that only works if you said something like I may get paid at lunchtime and might have some money for you. Otherwise, I doubt that anything changed that day and there was no reasonable reason for a second call the same day other than to harass you.
The New York Times today in an article titled “Education Department Unwinds Unit Investigating Fraud at For-Profits” shows a department charged with investigations of schools such as DeVry, Corinthian, Everest, ITT, IADT etc., has only three employees now that it has all but been shut down. In addition, the unit’s members are now required to obtain special approval to contact any outside groups including the CFPB, state attorneys general, etc. who had been partners in identifying and prosecuting cases. This alone has halted any investigative work by the three remaining employees. So bottom line, for-profit schools are free to engage in predatory activities once again per the DOE.
We warned our clients a few months back when an Inspector General’s report came out in December 2017 that highlighted the reduction of staff of the new direction that that the DOE was taking.
We reiterate now while it is still possible to file Borrower Defense to Repayment applications for fraud by for-profit schools, a better approach may be to enroll in an income based plan with debt forgiveness – but there are several different programs and it is important to choose the right one for best results. However, they have “staying power” and the current administration is in favor of Income Driven Plans.
There a lots of reasons a debtor needs to file a bankruptcy. However, debtors should be warned that they are likely giving up valuable rights to fight a foreclosure of their home if they do so — unless they reaffirm the mortgage. Over the last few years, many debtors elected not to voluntarily reaffirm an underwater home — this would allow them to be personally sued for any deficiency balance even after the bankruptcy was over. Another problem is the decision to reaffirm sometimes comes up before a loan modification review is complete and debtors aren’t sure whether reaffirmation is in their best interest.
Bankruptcy case law has been building in various Florida jurisdictions over this conflict. Many courts have seen this as an issue of debtors “having their cake and eating it too” when debtors are released of their liabilities under the mortgage, but yet they can continue to fight the foreclosure and live rent free.
In response to this dilemma, Governor Scott just signed a bill on March 26, 2018 that stops defendants from defending a foreclosure if they have previously agreed in bankruptcy to surrender the property to their lenders.
Would you know what to do if the Social Security Administration mailed you a letter stating that you have been overpaid and that you owe the government tens of thousands of dollars? No problem, this oversight can be eliminated in a bankruptcy filing. My colleague, attorney Jonathan Ginsberg in Atlanta, Georgia practices both bankruptcy law and Social Security law and I asked him to answer the question “can bankruptcy help you if you owe Social Security for a disability overpayment?” Here is what Jonathan says:
Surprisingly, the answer is yes – as a general rule Social Security disability overpayments are dischargeable in bankruptcy. You can use Chapter 7 to wipe out overpayment claims or Chapter 13 to pay back these claims as general unsecured debts.
Why Social Security Disability Overpayments Happen
We have rented out our second conference room as an office and need to sell the furniture by April 1 if possible. There is an antique oak round table, with two leaves to extend its size, an antique oak bureau and four small chairs. Two single file cabinets free to a good home, fair condition. May be able to deliver if local to South Tampa. Call our office at 813-258-2808 or email me at christie@christiearkovich.com if interested. Thanks!
Reports have been surfacing that the Department of Education is kicking borrowers out of Income Driven Plans when they file bankruptcy. It makes no difference if they are in a Chapter 7 or 13. It also doesn’t matter if the debtor is current in their payments. The National Association of Consumer Bankruptcy Attorneys (NACBA) views this as a direct violation of 11 U.S.C. 525 (Protection against Discriminatory Treatment).
There are ways to counter this and remain in an Income Driven Plan to continue progress toward debt forgiveness including Public Service Forgiveness. A new development is spreading across the country to file what is called the Buchannan provisions in a Chapter 13 Plan. We have recently adopted this in Tampa, Florida.
On January 5, 2018, Trustee John Waage and Judge Catherine McEwen agreed to the following Non-Conforming language in In re Hyland, 8-17-bk-01564-CPM that now allows for Income Driven Repayment Plans concurrently with a Chapter 13.
One common problem encountered by caregivers right after they’ve checked in their loved one at a local nursing home or Assisted Living Facility is whether the facility is one that is covered by the elderly parent’s Long Term Care Insurance policy. Does it have enough staff? Enough beds? 24/7 or other nursing care available? What is the facility called and how is it licensed?
Unfortunately, the wrong answers to any of these questions may be grounds for the insurance company to deny coverage. Rather than moving your loved one to another facility, or incurring the out-of-pocket expenses of the preferred location, reach out to a consumer or insurance attorney for help. Most attorneys experienced in this area offer a free intake analysis or consultation to determine if legal representation is warranted. Many represent the client on a contingency basis or hourly basis for short term matters with reasonable payment plans.
Administrative exceptions can be asserted to keep your loved one in the facility of choice. Often it may be the threat of a lawsuit or public exposure to convince an insurance company to do what is right.
If you are in default on a federal student loan, one option to cure the default is to enter into a 9 or 10 month rehab plan to cure the default. This can be a paperwork nightmare, with the result ending in wage garnishment if you are not careful. Once a garnishment starts, it cannot be stopped for five months. That means that you have to pay a negotiated rehab payment for nine months during which you’ll have 10 paychecks garnished. Most people’s finances cannot suffer that.
So it’s important to do this right. Sometimes that doesn’t mean doing it yourself if this is a process you are unfamiliar with. See what a rep for ACSI (Automated Collections Services, Inc.) said about working with our firm recently. John advised: “he really appreciated how detailed the firm was with advising them of our client’s situation and how he appreciated that we submitted the supporting documentation straight away. He noted that if other firms implemented a system like ours, it would make his job that much easier. He’s been dealing with student loans and collections for 30 years now and has never come across a firm that has been as thorough with addressing a situation and helping to swiftly rectify it.”
Since this conversation, John has drafted and sent over the garnishment release notice to our client’s employer and had one of his associates follow up with us to get our client on an affordable repayment agreement. This client approved for a $5.00 rehabilitation plan.
Ignoring your debtor’s federal student loans in their Chapter 13 bankruptcy can have catastrophic circumstances. While fixing vehicle, credit card and mortgage debt, you may have inadvertently allowed a debtor’s $100,000 federal student loan to balloon into nearly $150,000 by doing nothing. This is because the standard procedure of the Department of Education is to place these loans into forbearance during a bankruptcy. However, now in Tampa, we are permitted to use the following Non-Conforming Provision in Chapter 13 Plans to permit our clients to enroll in Income Driven Plans and even Public Service Loan Forgiveness whenever eligible.
On January 5, 2018, Trustee John Waage and Judge Catherine McEwen agreed to the following Non-Conforming language in our client’s case, In re Hyland, 8-17-bk-01564-CPM that now allows for Income Driven Repayment Plans concurrently with a Chapter 13.
The permitted language:
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog