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Experts state that by early 2013, the amount of student loan debt in the United States surpassed $1 trillion and that nearly 20% of Americans households owe on student loans.

It is also reported that student loan delinquency and default are also on the rise. By 2009, about 9% of borrowers had defaulted. Student graduating from for-profit schools have a much worse default rate.

There are many negative consequences for student loan borrowers who default. The federal government contracts with several private collection agencies to collect on defaulted loans. Collection charges may be as high as 20% or higher of the payment. Also in order to collect, the government can seize wages, tax refunds, and social security payments.

Deferment and Forbearance
Borrowers with federal loans who return to school or who are in a difficult financial circumstances may be able to obtain a temporary deferment or forbearance of payments. Information is available on the Department of Education's website.

Deferment means that the borrower is excused from making payments for a period of time. Borrowers who do qualify for deferment may seek forbearance from payment or a reduction in payments for up to 12 months. Unlike with deferment, interest continues to accrue on the loan.Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com

When you purchase something on credit, such as a car or a piece of jewelry, you enter into a Secure Loan because the item you've purchased secures the creditor because it automatically becomes collateral. Collateral is something that can be taken away, from the borrower, by the lender, if the debt is not paid.
The post Dealing with Secured Creditors appeared first on Tucson Bankruptcy Attorney.

By Constance Brinkley-Badgett

The idea of having your student loan debt forgiven might sound like a dream come true, but there are a few things you’ll want to consider should you be among those eligible for student loan forgiveness.

It turns out that there are many ways to get federal student loans forgiven. In fact, the Consumer Financial Protection Bureau a few years ago estimated that more than a quarter of working Americans are eligible for the Public Service Loan Forgiveness Program, but only a small percentage are actually using it.

And while student loan forgiveness in and of itself may not negatively impact your credit, the status of your loans before and after you enter into a forgiveness program could, so it’s important to thoroughly discuss with your lender how your loan discharge will be reported.

“Before entering into a loan forgiveness program, be sure you understand how the loan will be reported on your credit report,” said Rod Griffin, director of Public Education at credit bureau Experian. “For there to be no negative impact on your credit scores, the loan must be reported as if it were paid according to the original contract terms.”

That means you might need to negotiate if you’ve made any late payments or gone into default.

Let’s say you qualify for forgiveness because of a disability, and you fell behind on your student loans due to medical bills, inability to work and other factors that might impact your finances. If, when your loan is discharged, the servicer reports the missed payments to the credit bureaus, your balance will show up as zero, but those late payments will remain on your credit report.

You can try to persuade the lender (or collector if it’s gone that far) to remove the blemish from your reports, and they might consider it if you have a good explanation as to why it happened.

Also, if the lender indicates that the account was settled for less than originally agreed, that could also hurt your credit scores, Griffin said.

“It should indicate it is paid in full and that there are no delinquencies in the credit history” in order to not negatively affect your credit, he said.

Errors in your payment history also can negatively impact your credit score, so it’s a good idea to check your credit reports before entering into a student loan forgiveness plan. By doing so, you’ll be able to dispute any errors on your student loan accounts and have them corrected. You can start that process by checking your free credit scores, updated monthly on Credit.com, which will also show you major credit scoring factors like payment history. You can also get a free copy of your credit reports from each of the major credit bureaus annually.
Will You Pay Taxes?Certain types of student loans that are forgiven are not taxable, but other types are, so it’s good to know where you stand so you aren’t shocked by a big tax bill. A good place to begin your research is our primer on taxes after student loan cancellation. While President Obama’s 2017 budget proposal seeks to exclude Department of Education loan forgiveness programs from taxable income, it will require Congressional action to make that happen.

If you’re already behind on payments, there are some options available to help you get back on track, even if forgiveness isn’t one of them. To get out of default, you can combine eligible loans with a federal Direct Consolidation Loan, or you can go through the government’s default rehabilitation program. If you make nine consecutive on-time payments (these can be extremely low), your account goes back into good standing, and the default is removed from your credit report.

Copyright 2016 Credit.com, Inc.  All rights reserved. 

Credit reports and background checks errors
Ever checked your credit reports?  You will after watching this YouTube video: Last Week Tonight with John Oliver talking about errors credit reports and background reports. (I apologize for some of the language this reporter uses, but the information is extremely useful).  What I did not know is that:

• 52% of debts on credit reports are for medical bills.
• One in four credit reports had errors and
• one in twenty were seriously wrong.

I was aware that the errors directly affected someone’s ability to get a job, buy a car or home, get insurance or rent an apartment.  What I had not considered was the havoc errors in these reports would suffer on innocents.  It literally takes years and lots of money to unwind credit or background reporting errors.  That is years out of someone’s life.  Time they could have spent with their family, contributing to their community or just relaxing.  How alone they must feel!!
There are some regulations on the credit reporting companies, but not enough to protect you.  The government agencies are well aware of the problems caused by credit reporting agencies, but do little to protect us.  Except the Consumer Financial Protection Bureau.  They are aggressively attacking credit reporting agencies.  Check out their web site for tools, resources, many very valuable tips and an easy to file complaint process.
Background reports:  Hundreds of companies offer background reports.  These companies do not the same obligations as credit reporting agencies (which is minimum to say the least).  According to the Federal Trade Commission “there is no list of these companies”.  This YouTube review explains how often these background reports are inaccurate and how people are affected by these errors.
You may be one of those who have errors on your reports and never knew it.  Order your free credit reports from www.annualcreditreport.com.  By federal law each credit reporting agency must give you one free report each 12 month period.
The post Credit Reports Listed Me as a Terrorist appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.