Bankruptcy Protections for Students with Private Loans
To help those burdened with student loans, several members of Congress introduced legislation in April of 2010 that would treat private student loans the same as other consumer debt. Entitled “The Private Student Loan Bankruptcy Fairness Act,” the legislation would be a major change, permitting people who file for bankruptcy to discharge private student loan debt – something rarely possible in the past. A Kansas City bankruptcy attorney can help you understand bankruptcy laws regarding student loans and other types of debt if you are experiencing financial difficulties. Discharging Student Debt and the Undue Hardship Requirement In 2008, only 0.4% of federal student loan borrowers who filed for bankruptcy even attempted to discharge their student loan debt. The website FinAid estimates that less than 1% of private student loan borrowers in bankruptcy attempt to seek a hardship discharge of that obligation, and less than half of those people are successful….
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New Means Test Number Released
Kansas City Bankruptcy Lawyers Discuss Chapter 7 Eligibility Starting November 1, 2014, all new bankruptcy filings will undergo new means test numbers. This will not affect bankruptcies filed before this date. The numbers are based on data from the 2010 US Census concerning the median family income by family size. What is the Bankruptcy Means Test? Congress created the means test in 2005 to assess two things: 1) whether a person is eligible for Chapter 7 bankruptcy and if not 2) what that person’s monthly payment would need to be in a Chapter 13 case. The test was created specifically to prevent those with a high income from filing for Chapter 7 bankruptcy in an effort to get them to file for Chapter 13 instead so that at least a portion of their debts would be paid. There are some exceptions to the means test, such as if you are…
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What Are My Options for Student Loan Forgiveness?
More than 44 million Americans owe $1.44 trillion in student loan debt. For many of these borrowers, they pay several hundred or even thousand dollars per month. Student loans can make it difficult to afford a mortgage, start a business or pay down other debts. However, borrowers with federal student loans may have several options to forgive or discharge their remaining balances. The Department of Education has several options for student loan forgiveness. If you are struggling to pay back your student loans, or if you want to explore options for loan forgiveness, then we encourage you to continue reading. How Does Public Service Loan Forgiveness Work? In 2007, the Public Service Loan Forgiveness (PSLF) program was passed by Congress and signed into law by President George W. Bush as a way to entice graduates with federal student loan debt to enter jobs in the nonprofit and public sectors. The…
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Do I Pass the Chapter 7 Means Test?
Have Your Situation Reviewed by a Kansas City Bankruptcy Attorney Chapter 7 is a type of bankruptcy that allows you to discharge all or most of your unsecured debts while protecting your property from creditors. Not everyone is entitled to file for Chapter 7 bankruptcy, however. You must pass what is known as the Chapter 7 means test. The means test determines that your income levels are low enough to justify bankruptcy and looks at the amount of disposable income to pay unsecured debts. If you are unsure about any of the following criteria, speak with a bankruptcy lawyer near you to discover the best solution to your financial obstacles. Steps to the Chapter 7 Means Test There are two steps to the means test: Are you above or below your state’s median yearly income level for your type of household? In 2014, the median incomes for Missouri households were…
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