Kansas City Student Loan Lawyer with a Record of Success
Finding Financial Solutions With or Without Filing Bankruptcy
Neil Sader, a Kansas City student loan lawyer, has had great success working with student loan clients by helping them choose the best modification or repayment option for their circumstance or, when necessary, reducing their student loan debt through bankruptcy options. The Sader Law Firm was featured in Missouri Lawyers Weekly for obtaining through a bankruptcy court settlement a reduction in a client’s student loan debt by $250,000. Kansas City student loan lawyer Neil Sader has also been the subject of student loan articles after he was featured on the front page of Reddit and is known nationwide as an authority on the subject. Additionally, two of our attorneys, Neil S. Sader and Michael J. Wambolt, recently coauthored an article for Paradigm on repaying student loans.
The Sader Law Firm assists student loan borrowers nationwide with loan modifications and repayment plans and is able to assist borrowers locally with bankruptcy court options, when applicable.
How Bad is Student Loan Debt?
Student loans are one of the most widely held forms of debt in the United States, with more than 40 million Americans holding $1.3 trillion in debt. While the average student loan debt is just under $30,000, there are now numerous cases where loans are financially unbearable. Depending on the profession and institution attended, student loan balances exceeding $100,000 and more are commonplace. Adding compound interest and fees into the equation, these loans can double, triple and quadruple over the course of decades.
When borrowers fall behind on student loans, the consequences can be catastrophic to their finances and financial futures. Borrowers can face wage garnishments, tax refund garnishments, harassment by creditors, lowered credit scores, an inability to save for retirement and difficulty obtaining financing for mortgages or car loans.
Can Borrowers Obtain Real Help Through Modification and Other Programs to Reduce the Student Loan Burden? In Short . . . the Answer is YES!
Our firm assists clients with student loan debt review the options available for meaningful relief. There are real possibilities available to all borrowers of government loans, and while there are fewer options for private loans, there are possibilities all borrowers should to keep in mind. However, choosing the right solution is not easy. Among the options are the following:
- Income Based Repayment Plans (IBR): Borrowers may refinance and pay back on an income based repayment plan, which is about 10 percent of their income and would end after 20 years or 25 years depending on when the loans were taken out. For people employed by a non-profit or public entity, the repayment plan could end after 10 years.
- Debt Forgiveness: This may apply to for-profit schools that have lost accreditation or are the subject of government scrutiny. (For example, Corinthian Colleges was recently fined for predatory lending practices.)
- Forgiveness Plans for Stafford and Perkins Loans: This may apply for teachers, VISTA volunteers, military, peace corps, speech pathologists, government workers, non-profit workers and other service-based professions.
While there may be fewer options in dealing with private or non-government loans, we also help clients chart the best course given the alternatives with these types of loans as well, as options do exist.
Determining the best course of action for a student loan borrower, and/or a spouse, can involve tax considerations, decisions on consolidation, rehabilitation or other options, along with a host of other individual concerns.
How Are Debtors and Attorneys Discharging Student Loans in Bankruptcy?
It is possible for student loans to be discharged in bankruptcy, although the reality is that most people will not qualify to receive a hardship discharge. However, bankruptcy courts are continuing to review and even change the basis for allowing a hardship discharge of student loan debt. If fact, more and more bankruptcy courts are considering financial hardship as the basis for allowing a hardship discharge in bankruptcy. If you are already considering bankruptcy, you ought to have a bankruptcy professional review your eligibility to obtain a hardship discharge of your student loans.
By filing an adversary proceeding within a bankruptcy case, for the court to consider if paying the loans would create an undue hardship, the debtor has leverage to pursue his or her case to judgment or negotiate a settlement directly with the lender.
Who is Eligible for a Bankruptcy Hardship Discharge of Student Loans?
Bankruptcy courts in Kansas use the Brunner test to grant or deny a hardship discharge. The Brunner test requires debtors to show they cannot maintain a minimal standard of living, that this situation is unlikely to change and that a good faith effort has been made to repay the loans.
In Missouri, bankruptcy courts use the “totality of circumstances” test to determine whether to grant a hardship discharge. The totality of circumstances test observes the past, present and future financial circumstances of borrowers, and no good faith effort of repayment is required. This test is somewhat easier to qualify for than the Brunner test.
Reach Out to a Student Loan Attorney in Kansas City
The opportunity to make a plan to deal with these issues can help save a student loan borrowers thousands of dollars or more over the life of the loan. Student loan debt should not ruin your goals of financial security. For many, the hardest part is making that first call and asking for help. Often, our prospective clients feel better immediately after speaking with a lawyer and learning about their legal options for debt relief and a fresh financial start.
The Sader Law Firm offers information to student loan borrowers by calling us directly or filling out the online bankruptcy contact form on our website.