Blogs
One bit of peace of mind my bankruptcy clients welcome as much as a fresh financial start is the Automatic Stay. Immediately upon Wynn at Law’s filing of your bankruptcy, creditors generally cannot continue the collection process. It’s quiet time at dinner time since the persistent calls usually come to a screeching halt. When you file, Attorney Shannon Wynn becomes the contact person for the creditor.
The stay halts all attempts by creditors to collect your debts, including existing wage garnishments, lawsuits, and car repossessions. And of course the calls and letters.
Not all debts are subject to this provision. For example, child support orders and arrears are not stayed and the state can continue to attempt collection. Also, if a creditor believes he or she has sufficient grounds to continue, the creditor may petition the court to lift the Automatic Stay. Rare, but it happens.
It isn’t to imply they won’t get a share of your assets. Their share is a proportion. To simplify it, let’s say one third of your debt is owed one creditor: Then one third of your assets are owed them. Not more if they keep after you with more letters and calls. Once the automatic stay is in effect, that creditor is likely to receive less than the full amount they are owed if anything at all. Plus, creditors know you can file suit against THEM if they continue to try to collect after a bankruptcy filing. That, too, is rare, but it happens.
When isn’t there an Automatic Stay? If you’ve had Wynn at Law, LLC or another firm file a bankruptcy for you in the prior year, you may not get the Automatic Stay. With residential leases, a landlord can continue an eviction if they already obtained a judgement. Even after the bankruptcy filing, a landlord could start an eviction if he or she can demonstrate that the home/condo/apartment is being damaged.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
One bit of peace of mind my bankruptcy clients welcome as much as a fresh financial start is the Automatic Stay. Immediately upon Wynn at Law’s filing of your bankruptcy, creditors generally cannot continue the collection process. It’s quiet time at dinner time since the persistent calls usually come to a screeching halt. When you file, Attorney Shannon Wynn becomes the contact person for the creditor.
The stay halts all attempts by creditors to collect your debts, including existing wage garnishments, lawsuits, and car repossessions. And of course the calls and letters.
Not all debts are subject to this provision. For example, child support orders and arrears are not stayed and the state can continue to attempt collection. Also, if a creditor believes he or she has sufficient grounds to continue, the creditor may petition the court to lift the Automatic Stay. Rare, but it happens.
It isn’t to imply they won’t get a share of your assets. Their share is a proportion. To simplify it, let’s say one third of your debt is owed one creditor: Then one third of your assets are owed them. Not more if they keep after you with more letters and calls. Once the automatic stay is in effect, that creditor is likely to receive less than the full amount they are owed if anything at all. Plus, creditors know you can file suit against THEM if they continue to try to collect after a bankruptcy filing. That, too, is rare, but it happens.
When isn’t there an Automatic Stay? If you’ve had Wynn at Law, LLC or another firm file a bankruptcy for you in the prior year, you may not get the Automatic Stay. With residential leases, a landlord can continue an eviction if they already obtained a judgement. Even after the bankruptcy filing, a landlord could start an eviction if he or she can demonstrate that the home/condo/apartment is being damaged.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
The post Automatic Stay is a bankruptcy lawyer telling creditors to ‘back off’ appeared first on Wynn at Law, LLC.
If you’ve been sued for a private student loan by National Collegiate Student Loan Trust, there’s a good chance you have no idea who they are. Here’s what I know, and what you need to know.
Have a private student loan?
Chances are pretty good that National Collegiate Student Loan Trust is involved.
This entity isn’t a lender, servicer or guarantor of your loan. Instead, it’s a series of trusts that contain private student loans packaged and sold as investment vehicles.
Due to the convoluted ways in which these sorts of trusts operate, there’s some doubt as to whether anyone can prove where your loan ends up.
Here’s how it unwinds.
A Bank Lends Money For Private Student Loans
Federal students loans originate from the U.S. Department of Education, which lends the money to students.
But those funds are limited, and college is expensive. So many students look to banks as a way to make up the shortfall. We’re talking about well-known financial institutions such as:
- JPMorgan Chase Bank, N.A.
- Charter One Bank, N.A.
- Bank of America, N.A.
- RBS Citizens, N.A.
- Union Federal Savings Bank
These, in the world of student loan securitization, are called the Originators.
The National Collegiate Funding LLC
Shortly after the bank lends you the money, the loan is transferred to an entity called The National Collegiate Funding LLC. This company has no function aside from hanging onto the loan until it’s ultimately transferred to into the trust.
They don’t collect your private student loan money, nor do they take any action whatsoever. They merely take the loans and deposit them into the trust.
In technical terms, this company is called the Depositor.
So Who Collects The Money?
Someone has to collect the money on the private student loan, right?
It’s not the bank. It’s not the depositor.
The Servicer is the company that collects the money on your private student loans. They send you bills each month and handle the accounting.
In return for this work, the servicer gets paid by the trust that owns the loans.
National Collegiate Student Loan Trust
There is more than one National Collegiate Student Loan Trust. In fact, there are many of them.
Each trust is identified using a numeric code; for example, there is National Collegiate Student Loan Trust 2007-3 as well as National Collegiate Student Loan Trust 2007-2.
Each separate trust holds a bucket of private student loan debts that have worked their way from the Originator to the Depositor. In fact, National Collegiate Student Loan Trust 2007-3 holds private student loan debt with a face value of $1,464,000,000.
Click here to see the Prospectus Supplement for National Collegiate Student Loan Trust 2007-3. Fair warning though: reading it will make your head hurt.
Once the loans are safely in the hands of National Collegiate Student Loan Trust, bonds are sold to investors. Each bond entitles the investor to receive distributions from the trust based on the amount of money that comes in from private student loan borrowers.
The greater the percent of loans in the trust that paid, the better the return on the investor’s investment. But if too many of those loans go into default, the investors don’t make very much money.
How Trust Investors Minimize Their Risk
Investors minimize their risk in two ways.
The first involves the way in which the loans are piled into the trust. Some loans are riskier than others, so in theory they’re balanced out in the trust.
The second is far more interesting, and that’s the fact that the loans are guaranteed. Until 2008 these loan guarantees were handled primarily by The Education Resources Institute, Inc. (TERI), a nonprofit organization that touted itself as the largest private student loan guarantor in the county.
TERI filed for Chapter 11 bankruptcy in 2008 due in part to the acceleration of student loan defaults.
Who Owns YOUR Loan?
It’s difficult to say whether your private student loan is in a trust. Actually, it’s difficult to say which trust contains your loan.
That’s because each trust contains thousands of loans. Though each loan is supposedly on some master list, National Collegiate Student Loan Trust is seldom if ever willing to provide it to anyone.
They also don’t usually provide proof of the transfer of the individual loan from the bank to the Depositor to the Trust.
Much like the mortgage mess, there’s very little if any paper trail involved in the world of private student loan securitization.
Thanks for getting in touch - now check your email for some very important information.
Want to Win Against National Collegiate?
Enter your information below. We'll get in touch to set up an appointment with one of our student loan lawyers.
There was an error submitting your subscription. Please try again.
Your First Name
Your Email Address
Your Cell Phone Number
YES - I Want to Beat National Collegiate!
If You’re Sued By National Collegiate Student Loan Trust
When someone sued you for a debt – any debt – some of what the creditor needs to prove includes:
- that you took out a loan;
- that the entity suing you owns the loan and the right to collect on the loan; and
- that the amount of money that the entity claims you owe is the proper amount due.
Can National Collegiate Student Loan Trust prove that you owe the money? It depends on whether they can provide a copy of the signed Promissory Note.
Does National Collegiate Student Loan Trust own the loan and the right to collect on the loan? It depends on whether they can show that the loan went from the original lender to the Depositor to the Trust.
Is the amount they claim to be due correct? It depends on whether they can show a complete and accurate accounting of how they came to the amount they’re claiming.
There are more issues involved in defending a private student loan collection lawsuit brought by National Collegiate Student Loan Trust, but now you can see that it’s usually a good idea to fight the case and make them prove every element before you agree to pay them any money.
The picture above is taken from the Prospectus Supplement for National Collegiate Student Loan Trust 2007-3.
The post Who Is National Collegiate Student Loan Trust? appeared first on Shaev & Fleischman P.C..
If you've been sued for a private student loan by National Collegiate Student Loan Trust, there's a good chance you have no idea who they are. Here's what I know, and what you need to know. Have a private student loan? Chances are pretty good that National Collegiate Student Loan Trust is involved. This Read the article
The post Who Is National Collegiate Student Loan Trust? appeared first on Shaev & Fleischman P.C..
Holly Gets Hired After Bankruptcy and Gets a New Company Credit Card Holly was at the end of her rope. She’d been out of work for two years; she kept getting interviews but no offers; and she was feeding partial payments to her creditors, to try to keep them off her back. She believed she was […]The post Holly Gets Hired after Bankruptcy and Gets a New Credit Card by Robert Weed appeared first on Robert Weed.
Holly Gets Hired After Bankruptcy and Gets a New Company Credit Card Holly was at the end of her rope. She’d been out of work for two years; she kept getting interviews but no offers; and she was feeding partial payments to her creditors, to try to keep them off her back. She believed she was […]
Holly Gets Hired After Bankruptcy and Gets a New Company Credit Card Holly was at the end of her rope. She’d been out of work for two years; she kept getting interviews but no offers; and she was feeding partial payments to her creditors, to try to keep them off her back. She believed she was […]
The post Holly Gets Hired after Bankruptcy and Gets a New Credit Card by Robert Weed appeared first on Robert Weed.
It is generally true in a New York bankruptcy case that the Chapter 7 Trustee has a “look back” period of six years prior to the bankruptcy filing to examine asset transfers and commence litigation to set aside any that are deemed to be fraudulent transfers. This is because the Bankruptcy Code allows a Chapter 7 Trustee to set aside asset transfers that would be “voidable under applicable law by a creditor holding an unsecured claim…”. Essentially the Trustee steps into the shoes of any unsecured creditor in the case to pursue actions to avoid fraudulent transfers. However, when the IRS has an unsecured claim in the case recent case law suggests that the Trustee’s “look back” period is extended by many years.
Federal law (i.e., applicable law) authorizes the IRS to pursue tax collection efforts for ten years from the date of their assessment of a tax being due. In addition, it is well settled that the United States (of which the IRS is an agency) is not bound by state statutes of limitations when it brings suit in either federal court or state court. The net result is the collection remedies available to the IRS include the right to avoid transfers under state law without being hindered by state statutes of limitations. Cases have held that if the IRS has an unsecured claim on the filing date of a bankruptcy case, and if at said time the IRS could have commenced an action to avoid a fraudulent transfer, then the Trustee can step into the shoes of the IRS and avoid any fraudulent transfer that the IRS could, even those beyond the state’s statute of limitations period (i.e., six years in New York).
A recent article in the American Bankruptcy Journal (Jan. 2017, Vol. 36, No. 1) took the fact that the IRS is not bound by state statutes of limitations to its “logical” conclusion and demonstrated how truly scary this can be for debtors. Assume the following hypothetical facts: (1) in 1985 the debtor engaged in a fraudulent transfer when he gifted (i.e., no consideration) valuable art work to his sister, who still has the art work; (2) the IRS assesses a tax liability against debtor in January 1, 2006, which means their ten year period to institute a collection proceeding would end on December 31, 2015; and (3) on December 1, 2015 the debtor files a Chapter 7 case in which the IRS has an unsecured claim, and during the course of the case the Trustee becomes aware of the 1985 fraudulent transfer. Could the Trustee, stepping into the IRS’s shoes, set aside the asset transfer to the sister that occurred 30 years prior to the bankruptcy filing? The case law suggests “yes”. If the IRS would not be barred from setting aside the 30 year old transfer, neither would the Trustee who steps into their shoes.
This is a developing area of law where all of the questions have not yet been answered. However, many of the answers that Courts have issued have not been favorable to debtors. Examples of transfers subject to being set aside are those commonly employed in the area of estate planning and financial planning, and usually involve transfers to family members—the people you least want to see get hurt by your financial problems. When the IRS is a creditor in a case it is imperative that a New York debtor and his attorney examine not only transfers that occurred within the six years prior to the bankruptcy filing, but all transfers going back ten years and beyond.
The U.S. Bankruptcy Code is nothing you have to learn. Wynn at Law, LLC studies it to offer you the best legal guidance for your particular situation. For example, we don’t provide tax advice, but for a bankruptcy filing you’re required to have income tax returns filed for the taxable period the year leading up to the date of your bankruptcy case. It’s a good idea to have four years of preceding income tax returns as well.
It’s early in the year. You don’t have to have them done before meeting with us, but you do have to have them completed before the filing. Without them, you’re up against that Code, and could run into some severe problems when filing bankruptcy under Chapter 13.
Same goes for a Chapter 7 filing. Wynn at Law, LLC doesn’t need your income tax return for our initial meeting, but we will need them to provide to the court and the case trustee. You may be required to file with the court copies of your tax returns that are past due, if you missed prior years. You may even be on the hook for filing future years’ returns with the court if you are filing a Chapter 13.
Here are two tips on timing that you should know:
First, if the IRS has already put a Federal lien on your property for debt you owe them, the lien remains after the bankruptcy filing. You will have to clear the lien before selling the property. Second, when you don’t file taxes before filing bankruptcy, that tax obligation won’t be discharged in a Chapter 7 and may not be distributed in Chapter 13. If you’re due a refund, it may be applied toward the debt you owe or you may be able to keep 100 percent, which is a good thing.
A quick note here: These are income taxes that are discharged in Chapter 7 or Chapter 13. If you owe penalties (fraud, early distributions, etc.) or payroll taxes, Chapter 7 doesn’t wipe those out.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
The U.S. Bankruptcy Code is nothing you have to learn. Wynn at Law, LLC studies it to offer you the best legal guidance for your particular situation. For example, we don’t provide tax advice, but for a bankruptcy filing you’re required to have income tax returns filed for the taxable period the year leading up to the date of your bankruptcy case. It’s a good idea to have four years of preceding income tax returns as well.
It’s early in the year. You don’t have to have them done before meeting with us, but you do have to have them completed before the filing. Without them, you’re up against that Code, and could run into some severe problems when filing bankruptcy under Chapter 13.
Same goes for a Chapter 7 filing. Wynn at Law, LLC doesn’t need your income tax return for our initial meeting, but we will need them to provide to the court and the case trustee. You may be required to file with the court copies of your tax returns that are past due, if you missed prior years. You may even be on the hook for filing future years’ returns with the court if you are filing a Chapter 13.
Here are two tips on timing that you should know:
First, if the IRS has already put a Federal lien on your property for debt you owe them, the lien remains after the bankruptcy filing. You will have to clear the lien before selling the property. Second, when you don’t file taxes before filing bankruptcy, that tax obligation won’t be discharged in a Chapter 7 and may not be distributed in Chapter 13. If you’re due a refund, it may be applied toward the debt you owe or you may be able to keep 100 percent, which is a good thing.
A quick note here: These are income taxes that are discharged in Chapter 7 or Chapter 13. If you owe penalties (fraud, early distributions, etc.) or payroll taxes, Chapter 7 doesn’t wipe those out.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
The post Even in bankruptcy, file your taxes appeared first on Wynn at Law, LLC.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.