News & Announcements
Category: Chapter 7
The student loan crisis is now well beyond the $1 trillion mark. The U.S. Department of Education recently released data that 13.7 percent of borrowers are in default. And while student loans often receive special protections under the law, such as bankruptcy discharge rules, or garnishment preference or priority rules, collectors of student loans must still follow both federal and state debt collection laws. Protections under Federal and State Laws All debt collectors must abide by the federal laws set forth in the Fair Debt Collection Practices Act (FDCPA), and the Fair Credit Billing Act (FCBA), as well as similar individual state statutes. These laws outline required and prohibited behavior of debt collectors. The following are some tips to help you separate the truth from the tactics of some debt collectors.
A husband and wife hired us to file a Chapter 13 bankruptcy. They had $29,154.80 in assets, including 4 cars that they owned outright. They had $138,667.07 in unsecured debt, and $209,538.82 in secured debt. The clients intended to surrender their homestead in the bankruptcy. As a result, they were entitled to a $8,000.00 wild card exemption, a $2,000.00 personal property exemption, and a $2,000.00 vehicle exemption, a total of $12,000.00.
Almost anyone who has a large student loan knows that the general rule is that you cannot discharge student loans in a bankruptcy. If you could, every college graduate in America would be lining up to file. Of course, there are some exceptions to this general rule, which the professionals at Leiderman Shelomith Alexander + Somodevilla, PLLC can advise you about. That doesn’t mean, though, if you are a student loan servicer, or other creditor holding a student loan note, that you don’t have to heed the notices, orders, or rules of the Bankruptcy Court. This is a lesson that ECMC Servicing learned all too well in the case of In re Hann, 2013 WL 1277132 (1st Cir., 2013).
There are plenty of great reasons to live in Florida - the weather is beautiful, you’re never more than 45 minutes away from a beach no matter where you’re located in the state, and, let’s not forget, it’s the home of the happiest place on earth, Disney World. If you’re already a college student, or are planning on attending college, there’s also one more reason to love the great state of Florida. Florida’s college graduates statistically carry less student loan debt than graduates from other state universities.
If you are a service-disabled veteran, and you are unable to keep up with the payments on your student loan, the Department of Education offers complete student loan forgiveness. Federal student loan programs will allow you to discharge your student loans if you are found to have a total and permanent disability. This process is available for non-veterans, as well. Total and permanent disability means that your disability can cause death or has lasted five or more years and can be expected to last for at least five more.