Student Loans and Bankruptcy

Student loan debt is the most pressing problem in the realm of consumer law.  There is currently $1.48 trillion in outstanding student loan debt, and 44.2 million Americans have at least some outstanding student loan debt.  The current student loan delinquency rate is 11.2%, and the median student loan payment for borrowers between the ages of 20 and 30 is $203 per month.

Generally speaking, student loans, whether federal or private, are not dischargeable in bankruptcy.  If you can show undue hardship, meaning that repaying the loans would result in your inability to maintain a minimal lifestyle, you may be able to discharge part or all of your student loans.  However, courts are extremely reluctant to find undue hardship.

Using Chapter 13 to Address Your Student Loans

Chapter 13 of the bankruptcy code is a means that is available to address student loan debt.  Chapter 13 is a repayment plan that is usually 36 to 60 months in length.  Your payments will be based on disposable income left after your reasonable monthly living expenses.  For example, if you have $300 disposable income after your reasonable monthly living expenses, your Chapter 13 plan payments will be $300 per month.  The money goes to the Chapter 13 Trustee, who distributes the money to your creditors, including your student loan creditors.

Chapter 13 Approaches to Student Loan Debt

Chapter 13 allows the creation of different classes of unsecured creditors, which includes student loans, credit card debt, health care debt, etc.  You can treat student loans in one of three ways in a Chapter 13.  

First, you can treat student loan debt the same as all other unsecured creditors.  This means that student loan creditors will receive the same payment percentage as all other unsecured creditors.  

Second, you can create a special class for the student loans and pay a higher percentage to the student loan creditors than to the other unsecured creditors.  

Third, you can create a special class for the student loan creditors and pay zero percent to them while paying the remaining unsecured creditors.

The approach taken will vary depending on your individual circumstances.

Cautions Regarding Chapter 13 and Student Loan Debt

Some cautions are in order.  First, your student loan debt will not be discharged via the Chapter 13 plan.  Any unpaid portions on the student loans will remain, and interest will continue to accrue.  But, all collection actions have to stop during the repayment period.  Your other unsecured debt will be discharged if you successfully complete your repayment plan.

While not a discharge or long-term solution, Chapter 13 may be the best means to address your student loans if you are unable to pay them.  Of course, once you complete your repayment plan, you should have more disposable income.  But, if you still are unable to pay, you could always immediately file another Chapter 13 petition.

If you are struggling with student loan debt, contact a skilled bankruptcy lawyer to discuss your options.

www.debt-relief-law.com

(866) 279-9721

(502) 245-9100

Neighbor Spoofing: The Latest Robocalling Plague

Have you gotten a call lately that looked like it was from your area only to hear a telemarketer on the other end when you answer?  Most likely, you have.  This is called neighbor spoofing, and it is one of the latest tricks robocallers use to get around call blocking software.

Neighbor Spoofing Defined

Neighbor spoofing is a form of caller ID spoofing used by telemarketers, scammers, and robocallers. Neighbor spoofing uses auto-dialing and VoIP (Voice Over Internet Protocol) services to send unsolicited phone calls with an outgoing Caller ID that closely matches your area code and phone number.

By matching their caller ID as closely as possible to the phone number they are placing the call to, spammers can trick more of their targets into answering the phone. 

Some of these robocallers spoof phone numbers associated with the IRS.  If your phone has name plus caller ID, then you are likely to answer.  The callers then try to extort money from you for taxes you don't owe.  Beware that the IRS will never call to try to collect money.

What to Do

Unfortunately, there isn't a great deal that can be done unless you invest in a paid app for your smartphone.  The best approach is not to answer any call from a number you don't recognize. Robocallers normally won't leave voicemail because of he possibility that the call might be traced.  If the call is important, then the caller likely will leave a voicemail.

Remember that if you do happen to answer a spoofed robocall, don't engage.  No matter how angry you may be, hang up immediately.

We will keep you posted with developments on this front as they unfold.

www.henry-legal.com

(866) 279-9721

(502) 245-9100