Archive for September, 2012

Student Loans and Bankruptcy

Monday, September 17th, 2012
article in Bankruptcy Law Network

Student loans come in various forms…. which are the best loans for a new student? Are private loans or federal loans better?  Many new graduates cannot find good paying jobs and the lack of high paying jobs creates a problem when it comes to paying back the student loans. What if that person has to consider bankruptcy? Well, we can start with the proposition that no student loans are dis-chargeable in bankruptcy without an undue hardship.

Let’s say that person wanted to go to college to pursue a degree in the area of law enforcement. Under the current Department of Education repayment guidelines, that person may be able to discharge the unpaid portion of their student loans after a ten (10) year income based repayment plan

However, if the same person takes out private student loans for the same amount of money, they may be still repaying those debts well beyond the ten (10) year period. Now, here comes the hard part. What if Congress decides to change the law and make the private student loans dis-chargeable in bankruptcy?

If a person takes out federal loans and Congress makes the private loans dis-chargeable in bankruptcy, the consumer loses the bankruptcy protection if they need it. If the consumer takes out private loans in the anticipation that Congress is going to make the private loans dis-chargeable in bankruptcy, and then Congress doesn’t act, the consumer loses because private loans do not offer the many options offered by the Federal Student Loan Program.

If the entire obligation is federal or federally guaranteed, borrowers are eligible for either a hardship deferment or an Income contingent repayment plan (ICRP). A workout agreement can be calculated at the Federal student loan website. This is not possible when private student loans are thrown into the mix.

The central problem for many borrowers is that there are no comparable workout agreements available for private student loans. Private student loans were made non dis-chargeable except in cases of undue hardship and the provision was retroactive, so earlier loans, incurred when dis-charge ability in bankruptcy was a more accessible option, abruptly became non dischargable for many borrowers.

This problem was created by an act of Congress and would require an act of Congress to remedy. The courts will be seeing many more cases of this nature, given the recent proliferation of private student loans and the growing numbers of families in serious financial trouble because of the depressed housing market and rising unemployment.

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

www.bankruptcyfortampa.com
or call (727) 254-1704.

Bankruptcy and the Unknown Asset

Saturday, September 1st, 2012
article from BLN

Bankruptcy Fraud is a Federal Crime,  and not something to be taken lightly. I know it is frustrating having to deal with providing all the information your attorney asks for, but I assure you that it is done for your protection. When they choose to seek protection from creditors by using the bankruptcy laws, debtors are required to provide accurate information on the petition.

First and foremost, filing bankruptcy without having all the information you need could get you into a lot of trouble or complicate your case, depending on the circumstances, why, and how it is done. You don’t want your case to turn into a train wreck, but sometimes you don’t have a choice.

If someone is tempted to list property as unknown because they simply don’t want to go to the trouble of finding information, they might just find themselves having to explain why they did it to a judge.

Listing something as unknown is not something you should so without making every attempt to get the answers first. You should be as forthright as possible, be prepared to hand over the property to the court for liquidation to pay your debts, and it is not something you should do it without discussing with your bankruptcy lawyer

This can also depend on the type of case that is filed. Chapter 7 trustees take control of property that is the debtor can’t keep, and they sell it to pay towards the debts.

Chapter 13 trustees don’t ordinarily take and sell property. In Chapter 13 bankruptcy cases, the debtor is ordinarily the one who will retain or sell the property. That means that the debtor might be required to come up with a plan, find a value, or figure out how to sell the asset – even if it is difficult to do.

Once the case is filed, you can’t easily turn back if you find out that you just handed over something that could have paid off your debts in full. I don’t normally recommend giving up property without having a general idea of what you are giving up but how much you owe, what protection are looking for with the bankruptcy filing, and what benefits you get are all factors to weigh.

So even if you aren’t quite sure of values, disclose as much as you can, know what your goals for filing are, and know what you are giving up. Provide as complete and accurate information as you can to increase the chance of a quick and smooth journey through bankruptcy.


Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

www.bankruptcyfortampa.com
or call (727) 254-1704.