Student loan | How to Really Discharge Your Student Loans in Bankruptcy. Many ...

Student loan | How to Really Discharge Your <b>Student Loans</b> in Bankruptcy. Many <b>...</b>

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• How to Really Discharge Your <b>Student Loans</b> in Bankruptcy. Many <b>...</b>
• Senate plan could help grads pay off <b>student loans</b> - Jordan-Marie <b>...</b>
• August 1, 2014 U.S. Committee on Banking, Housing, and Urban <b>...</b>
• <b>Student Loan</b> Debt Can Lead to Poorer Health, Middle-Age Malaise <b>...</b>
• <b>Student Loan</b> Repayment Scams: How To Avoid Being Ripped Off <b>...</b>

How to Really Discharge Your <b>Student Loans</b> in Bankruptcy. Many <b>...</b> Posted: 05 Jan 2013 10:20 AM PST For years we've all heard the same message that it's near darn impossible to discharge student loans in bankruptcy. We've heard that the undue hardship standards make it so onerous that expecting a student loan discharge is all but an act of God. But what if that belief was actually more myth than fact? Recently Jason Iuliano, (J.D. Harvard Law School; Ph.D. Student in Politics, Princeton University) took an emperical look at the reality of student loan discharges in bankruptcy and his results, are, well, shocking. What Iuliano found was that the reality of student loan discharge in bankruptcy was that four out of ten that attempted to discharge their loans were successful. Granted, a 40 percent rate is not success for the majority, but it's not inconsequential either. More disturbingly he found that in just the one study year, 69,000 debtors would have been good candidates to receive some or full relief from their student loan debt but they never even tried to discharge the loans. In fact few ever try to discharge their student loans in bankruptcy. "99.9 percent of student loan debtors in bankruptcy never attempt to get a discharge," says Iuliano. It is possible to discharge student loans in bankruptcy. – Click to Tweet The research found that consumers that were able to successfully discharge their student loans in bankruptcy under the undue hardship standard had these three characteristics. Less likely to be employed. More likely to have a medical hardship. More likely to have lower annual incomes the year before they filed for bankruptcy. After studying previous bankruptcy filings, Iuliano stated, "Incredibly, only [one-tenth of one percent] of student loan debtors who have filed for bankruptcy attempt to discharge their student loans." – You can read full study here. In order to pursue a successful claim to discharge the loans in bankruptcy a student loan holder should be able to show (1) a current inability to repay the loans, (2) a future inability to repay the loans, and (3) a good faith effort to repay the loans. Many can easily do that. A review of the results obtained by filers shows the majority of those approved for student loan discharge, received a full or partial discharge of their student loan debt. Need Student Loan Assistance? Click Here So Why Don't More Even Try? There are a number of factors which could explain why so few consumers attempt to discharge their student loans under bankruptcy. The first reason and probably the most prevailing is the apparent urban myth that student loans can't be discharged under bankruptcy. The reality of the results Iuliano uncovered is quite different. Second, it's quite possible that student loan collectors and the media tell consumers that there is no sense pursuing bankruptcy since student loans can't be discharged so they never attempt to. Third, a wide number of bankruptcy attorneys are convinced that student loans can't be discharged under bankruptcy and never even try to include them or pursue an adversary hearing to go for the discharge. Admittedly, I've held this old assumption as well and have said for years that an undue hardship discharge is not possible for many. It wasn't until reading this most recent research released in September of 2012 that proof has been shown otherwise. Attempts by a wider number of consumers to discharge their student loans may not be as successful as the sample studied since more people with higher incomes and less of a demonstrable hardship may now pursue a discharge of their student loans. But maybe more will attempt to discharge their student loans through this process and tens of thousands of people will be successful that would never have even attempted such relief. The study author also postulated why so few try: Nonetheless, an important question remains: why do so few people in bankruptcy attempt to discharge their student loans? A couple reasons likely account for this phenomenon. First, the view that student loan discharges are nearly impossible to obtain may be a self-fulfilling prophecy. As mentioned earlier, journalists and academics have long asserted that it is nearly impossible to meet the undue hardship standard. If debtors take these comments to heart and believe that their chances of success are trivial, they will be less likely to attempt to discharge their educational debt. Judges grant so few discharges simply because they hear so few student loan cases. Unfortunately, with judges granting so few discharges, commentators feel even more justified in arguing that the undue hardship requirement is too harsh. Thus, the cycle continues. A second reason that people may choose not to pursue discharges is that they do not have money to pay an attorney. Because the adversary proceeding is essentially a trial, debtors may believe that they need an attorney in order to win. Quite reasonably, they do not think they will be able to represent themselves against a large company such as Sallie Mae or Wells Fargo. My study, however, shows that a debtor can be successful without an attorney. In fact, after controlling for other factors, I found that there was no statistical difference in outcome between pro se debtors and debtors represented by an attorney. As bankruptcy attorney Gary Armstrong stated in a recent post on this subject, "The main lesson from the findings is the minimal participation by debtors. Surprisingly, less than one tenth of one percent of debtors who file for bankruptcy even attempt to have their student loans discharged." – Source Here is the bottom line, more consumers should pursue a student loan discharge in bankruptcy. While the majority may not receive a discharge, a large number that don't even try would receive a substantial benefit or relief to allow them to move forward with their financial lives. Reality Check: The reality is that the cost of fighting the student loan lender for a rightful elimination of student loan debt can be an expensive process that many who file bankruptcy can't afford to pursue. The bottom line here is that if you have student loans you should discuss this article and these issues with your bankruptcy attorney to clearly and specifically understand what it would take for you to fight for a discharge of your student loans. Even a number of those that pursued a full discharge of their debt, that were not discharged by the court, were able to come to an agreement with their student loan lender to settle their loan balance instead. Either way, that's a victory for consumers with unmanageable student loan debt. If you find a bankruptcy attorney that says it's not possible to discharge your student loans, send them the link to this article and let's help open their eyes to the research. If you need help finding a local bankruptcy attorney, you can always use this free online bankruptcy attorney directory. For more information on dealing with student loans in bankruptcy, see the articles below. Discharge Your Student Loans in Bankruptcy How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try. A Look at Sallie Mae and Other Student Loans Discharged in Bankruptcy in 2012 Federal Student Loans Discharged in Bankruptcy. A Look at the Surprising 2012 Data and Cases. These Private Student Loans Can Be Easily Discharged in Bankruptcy All Student Loan Bankruptcy Discharge Articles Update Another approach that has worked for discharging student loans in bankruptcy is for private student loans that are outside their statue of limitations and time barred. In this case the private student loans can be eliminated in a regular bankruptcy without any adversarial proceedings as needed with the approach outlined above. Additionally many private student loans were bundled and sold, much like mortgages were. If pressed it might be very hard for the true ownership to be legally proven. That is a much more complicated course of action but I believe we will see this develop into a bigger issue. A successful approach for those that are having a tough time with private student loan payments is to consider talking to bankruptcy attorney and explore a chapter 13 bankruptcy where the student loan payments are included. In some areas the payments can be reduced. In general the bankruptcy will stop all collection activity and potentially fees for the five years you would be in a chapter 13 bankruptcy. Hopefully the laws will change in the years ahead and private student loans will be dischargeable again as they were before 2005. For government backed student loans, read The Ultimate Guide to Dealing With Student Loans You Can't Afford. Update July 7, 2013 A recent appeals court ruling supported discharge of student loans in bankruptcy. Read Big Case Proving Ability to Discharge Student Loans in Bankruptcy. Get Out of Debt Guy – Twitter, G+, Facebook How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try. by Steve Rhode

Senate plan could help grads pay off <b>student loans</b> - Jordan-Marie <b>...</b> Posted: 06 Aug 2014 06:10 PM PDT This legislation could affect more than 15 million people under 30 with student loan debt. | Getty For many students returning to college this fall, there's a major nagging issue: the mountain of debt they'll face after graduation. Official Washington, from the White House to Capitol Hill, has been struggling to find ways to make college more affordable. One bipartisan solution offered this summer by Sens. Marco Rubio (R-Fla.) and Mark Warner (D-Va.) is designed to streamline the repayment and management of federal student loans. Continue Reading For instance, student borrowers would be enrolled in automatic payroll deductions each month, with 10 percent of a graduate's paycheck able to be deducted with a $10,000 exemption annually. That could make a huge difference for the more than 15 million people under 30 with student loan debt. The average loan balance for those borrowers climbed over $20,000 in late 2011 and has been growing ever since, according to data from the New York Federal Reserve. Altogether, student loan debt now tops $1.2 trillion. (Sign up for POLITICO's Morning Education tip sheet) "I think the Rubio-Warner policy will simplify the process of repayment, but I am not convinced it will lessen the burden of student loans," said William Bennett, a recent graduate from the University of North Carolina at Chapel Hill. The 10 percent deduction would be tough, he said, but the Rubio-Warner proposal could be a huge step toward larger financial aid repayment reform. "It's a step forward but certainly not the last," Bennett said. In their announcement of the Dynamic Student Loan Repayment Act, Rubio and Warner emphasized the mounting student loan debt and the importance of their bipartisan effort to create an innovative repayment plan. (More from POLITICO's Journalism Institute) "On average, today's graduates carry nearly $30,000 in student loan debt. But our current loan repayment system often turns what should be reasonable debts into crippling payments," the senators said in a joint statement. Andrew Kelly, director of the Center on Higher Education Reform at the conservative think tank American Enterprise Institute, said he supports the Rubio-Warner effort because it would make income-based payments mandatory, which are currently an opt-in for most federal payment plans. "When people have to opt in to things via a complicated process, that's heavy on paperwork and burdensome. They're less likely to self-select into it, and that's what we're seeing with income-based repayment," Kelly explained. For Rubio, particularly, student loans have been on his mind. When he was first elected to the Florida House of Representatives, he was still paying off more than $100,000 in student loans, his spokesman, Alex Conant, noted. "It's too expensive and too hard to access for too many Americans, especially working Americans," Conant said. "He's proposed a whole series of reforms to make it more accessible and more affordable." Rubio first outlined his student loan legislation in a February speech. And if it doesn't move along in this fall's congressional session, Conant said, he expects it to be revisited next year in the new Congress. And Conant said teaming up with the Democratic senator from Virginia could be a big asset. "We try to be bipartisan whenever we can because it obviously improves the odds of something passing," Conant said of Rubio's partnership with Warner. "His office expressed interest on this idea, and we're happy to work with anyone that agrees with us on this." For some students, though, bipartisanship is not a high priority. They're just eager for some relief from the mounting debt. "I honestly don't care who fixes the problem, as long as someone is working to fix it," said Alicia Carroll, a student at Emerson College in Boston set to graduate in fall 2015. The Rubio-Warner legislation is in sharp contrast to the stalled bill introduced by Sen. Elizabeth Warren (D-Mass.) that focuses on cutting interest rates for borrowers across the board, said Jason Delisle, director of the Federal Education Budget Project at the New America Foundation, a nonpartisan think tank focusing on education and other issues. The Rubio-Warner bill is more comprehensive than Warren's measure, Delisle said. "It gets to the heart of the problem rather than marginally lowering [interest rates]," he said. "This bill is the first time [the Senate is] advancing policy beyond pure concept," Delisle said. "All of the mechanics and processing have to be moving smoothly behind the scenes."

August 1, 2014 U.S. Committee on Banking, Housing, and Urban <b>...</b> Posted: 01 Aug 2014 02:34 PM PDT