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President Obama signed an executive action on Tuesday that would make it easier for Oregon bankruptcy filers to discharge certain kinds of student loans. As any would be Oregon bankruptcy filer knows, student loan debt is extremely difficult to eliminate now. The most common path to discharge now requires a showing of undue hardship which is now so stringently defined that an Oregon bankruptcy attorney could go through her entire career without finding a case that would meet the required criteria.
It appears that the undue burden standard may now be broadened such that more debtors would potentially be able to eliminate their student loans. It is, however, far from certain how many Oregon debtors will be affected and what the new standard for discharge will be.
We know that the executive branch has directed the Secretary of Education, by July 15, 2015, to “issue information highlighting factors the courts have used in their determination of undue hardship, to assist parties who must determine whether to contest an undue hardship discharge in bankruptcy of a federal student loan.” The president has also suggested relief might be forthcoming as well concerning private student loans.
Obama has asked the the Consumer Financial Protection Bureau, the Department of Education and the Treasury Department to make recommendations by Oct. 1, concerning any needed changes to bankruptcy laws and other laws and regulations. Some 40 million Americans have student loans totaling approximately $1.3 trillion, the White House says. The average debt is about $28,000.
The original post is titled Student Loan Bankruptcy Relief Coming to Oregon?! , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
When people hear I am a bankruptcy attorney the first thing they say is “I hope I never need your services, no offense.” I understand the sentiment. Nobody wants to file bankruptcy. There is something else, however, just under the surface of this statement. While GM, Chrysler, and American Airlines can all file bankruptcy and have it considered a “smart business move”, when individuals file for bankruptcy there is still a stigma in the eyes of some. It shouldn’t be that way. Without bankruptcy, America would be a very different place. Many of the great American success stories have happened only after the filing of a bankruptcy. Entrepreneurs take great risks to build their company, and like the rest of us, they do not always succeed. Without the ability to get a fresh start, the following American businesses would not exist today:
Ford Motor Company: Henry Ford was perhaps America’s greatest entrepreneur. When he created the assembly line he revolutionized the world. With that innovation Henry Ford lowered the cost of goods across American and allowed the American Economy to take off in a way that no country had ever seen before. However, before the raging success of Ford Motor Company, Henry Ford filed bankruptcy not once, but twice.
Disney: Mickey Mouse, Donald Duck, Cinderella, Mulan, and Elsa have helped shape American youth for almost a century. In fact, for many Europeans, Disneyland and Disney World have both become synonymous with America itself. However, prior to starting Disney Brother’s Studios, Walt Disney had started a company in Kansas City that became burdened with debt. Without a fresh start, Walt Disney would not have had the ability to take another gamble and start the company that we love so much. While there are days when I am listening to “Let It Go” for the upteenth time that I think that may not be such a bad thing, America would certainly be a different place had Mickey never warmed our hearts.
Heinz: What is more American than a hot dog smothered in ketchup at a baseball game? Anything? As popular as ketchup is today, Heinz is certainly the best known brand. However, as successful as H. J. Heinz’s second company would be, his first attempt was a dismal failure. Having attempted to succeed with a horseradish company, H.J.’s company fell apart when the financial world collapsed in 1875. After getting a fresh start through bankruptcy, H.J. went on to define what it meant to be a condiment.
This is only three of the many success stories that have followed a bankruptcy filing. When an individual gets a fresh start they are able to reinvest in our country. Whether that means starting a company, going back to school, or just raising their children with pride, the benefits that bankrupt Americans have bestowed on this country are immeasureable. So the next time you hear that someone is conemplating bankruptcy don’t judge them. Instead, be happy that in there own way they will have a chance to contribute to the future greatness of
On March 10, 2015 the White House announced that President Obama would sign a Presidential Memorandum directing the Department of Education and other federal agencies to work across the federal government to do more to help borrowers afford their monthly loan payments including: (1) a state-of-the-art complaint system to ensure quality service and accountability for the Department of Education, its contractors, and colleges, (2) a series of steps to help students responsibly repay their loans including help setting affordable monthly payments, and (3) new steps to analyze student debt trends and recommend legislative and regulatory changes. In addition, the Administration is releasing state by state data that shows the outstanding federal student loan balance and total number of federal student loan borrowers who stand to benefit from these actions. This move underscores his vision for an affordable, quality education for all Americans in a Student Aid Bill of Rights which he started five year ago.
A Student Aid Bill of Rights
- Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning.
- Every student should be able to access the resources needed to pay for college.
- Every borrower has the right to an affordable repayment plan.
- And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.
Note from Diane: For students with existing loans – don’t hold your breath that this will actually bring some timely relief. When the administration changes so will the focus on these types of programs.
For those who are considering taking students loans – do not take out more student loans than you can afford to reasonably pay over a period of 10 years. Critically analyze your chosen employment market and determine how much you can reasonably expect to be paid. Reduce that amount by at least 35%. Now you might be looking at your financial reality for the five year period after graduation. But, if you are considering a career in a market that is saturated, then expect to find work far outside your chosen career and income far below the expected rate. It that case it will most likely take you 20 or more years to pay back the student loans, if ever within your income producing life. Be very careful about your decision to borrow student loans.
The post A Student Aid Bill of Rights – March 10, 2015 appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Many people ask whether or not a student loan company or SBA creditor can garnish their wages without first obtaining a court order. The answer is “yes”. 
The following is a direct quote from an article by the Bureau of Fiscal Services an “administrative Wage Garnishment (AWG) is a debt collection process that allows a federal agency to order a non-federal employer to withhold up to 15 percent of an employee’s disposable income to pay a nontax delinquent debt owed to the agency.
Treasury, on behalf of the federal agency, is authorized to issue a wage garnishment order to collect the debt. Under federal law, a court order does not need to be obtained. The employer will be required to send the amounts deducted to Treasury for payment to the federal agency. The AWG process is governed by federal law. State laws do not apply (emphasis added).
A debtor is entitled to a hearing before AWG begins if it is requested within 15 business days after the AWG notice letter is mailed. The federal agency may continue the AWG process if a hearing is requested after the 15-day period. A hearing may be requested concerning the existence or amount of the debt, or the terms of the proposed repayment schedule under the garnishment order (hardship).
The federal agency will determine whether the hearing will be oral or written. If the agency decides to hold an oral hearing, the agency will decide when and where the hearing will be held, and the debtor may decide whether the hearing will be in-person or by telephone. The debtor will have to pay any travel expenses for an in-person hearing.
This process is authorized by section 31001(o) of the Debt Collection Improvement Act of 1996 (DCIA), codified at U.S.C. 3720D. The rules and procedures governing AWG were published as a Final Rule (31 CFR 285.11) in the Federal Register on May 6, 1996 (63 FR 25136). In accordance with the Final Rule, Debt Management Services (DMS), Bureau of the Fiscal Service (Fiscal Service), formerly the Financial Management Service, U.S. Department of the Treasury, promulgated Standard Form 329 (SF-329)
, which federal agencies are required to use to issue AWG orders.”
Forms are available for the borrower to request a hearing regarding the terms of the repayment schedule (hardship), “a financial statement with supporting documentation must be submitted with the hearing request form received with the notice letter.”
I provide this information because many people believe their wages are protected until a creditor obtains a judicial order permitting garnishment of wages. Unfortunately, they are very surprised when their paycheck is garnished without notice. That garnishment starts an avalanche of bounced checks, NSF fees and aggressive creditors calls and lawsuits.
The post Garnishment of Wages – Administrative Actions appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
As the internet continues to expand, individuals are seeing ever expanding options that “allow” them to “replace expensive services with low cost alternatives.” If you believe the hype, websites and algorithms can replace everything from travel agents to doctors. Why take your kid to the doctor when you can simply use Web M.D. However, despite the magnificent claims of some of these websites, the reality is that web-based models often fall well short of the real life services of the past. Good doctors don’t simply use the symptoms that you tell them about, but rather ask you probing questions to get to symptoms you may not even realize that you are exhibiting. Travel agents don’t simply buy your tickets for you, but often suggest travel plans you didn’t even know you wanted. When a problem occurs on a trip, a website can’t fix it, but a good travel agent can.
When you sit down with a good attorney, their job is not to find out what you want and do it. The job of an attorney is to find out what your goals are and help you achieve them. The difference can be immense. Imagine a client who has a burden of debt that is just too high. He can no longer afford to keep his home, he has thousands of dollars in credit card bills and he owes his ex-spouse a property settlement. His friend tells him that he should file for Chapter 7 bankruptcy. The client goes to an online service, clicks on Chapter 7 and fills out the forms. He prints them out and heads down to the bankruptcy court to file the documents. The client is able to give up his home in the bankruptcy and get rid of the credit card debt but he still has to pay his ex-wife the property settlement. The client got what they wanted, a Chapter 7.
Now imagine that same client goes to a qualified bankruptcy attorney. The attorney sits down with him and finds out that his home has dropped in value and is worth less than what is owed on the first mortgage. After talking with the client, the attorney learns that the client would prefer to stay in the house, but simply cannot afford it. He could afford to stay if he didn’t have to pay the second mortgage and all the credit card debt. He also would prefer not to have to honor the property settlement agreement which he viewed as unfair in the first place. The attorney suggests that the client files for a Chapter 13 Bankruptcy. They file an adversary to strip the second mortgage, they discharge the property settlement in the Chapter 13 Plan (something that is not available in a Chapter 7) and they save the clients home. Ultimately the client did not get what they wanted. However, the client was better able to achieve their goals through the counsel of the attorney.
The reality of life is that attorneys do not sell you paperwork. The product that we produce is not the forms that are filed with the court. Attorneys offer advice and wisdom gained through years of study and practice that we have experienced. The paperwork is simply the tangible manifestation of that product. Do I believe that legal websites can replace a good attorney? No, and neither should you.
The Wisconsin winter season can be tough on the pocketbook. We celebrate costly holidays in November and December, receive and owe on our Wisconsin real estate tax bills in January, and our utility bills skyrocket every month. The last few Wisconsin winters have been especially harsh due to the extreme cold temperatures. Many of you have likely seen your Wisconsin heating bills nearly double. Next thing you know, it is March. With utility bills due in full April 15th, March can be a stressful month for Wisconsin residents.
Where will you get the money to pay your overdue Wisconsin utility bills? It is not uncommon to receive Wisconsin utility bills in excess of $300 each month. It is hard to know what to do when you can still only afford to pay $150 a month, or less. For the last five months, November – March, you may have piled up nearly $750 or more in overdue Wisconsin utility costs. Although it is illegal for your Wisconsin utility company to shut off your utilities during the winter season from November 1st – April 15th, you risk disconnection if you cannot pay your current bill, plus your overdue amount, in full by April 15th. What can you do?
Your first option is to enter into a deferred payment agreement with your utility company. Some deferred payment agreements can be made online and others you will need to call and speak to a customer service representative. This option does not help everyone. Assistance mainly depends on how much the utility company is willing to work with you. WE Energies will normally take your balance owed and divide into 12 monthly installments over the next year. You will need to pay your current bill, plus the deferred payment agreement amount each month. If you fail to pay both the current amount and the deferred payment agreement amount, you have defaulted on the agreement and your utilities are in danger of disconnection. Alliant Energy is notoriously hard to work with. More often than not, they demand a large down payment and then divide the balance over the next three months. With your current utility bill already at a high cost, plus the down payment amount, plus the deferred payment amount, this “solution” usually does not help.
On top of it all, both utility companies have been reporting your lack of full payment each month to the credit reporting agencies. WE Energies can literally ruin your credit score. The only solution to stop the hindering of your credit score is to make your payments in full each month. You can also try calling the Wisconsin utility company and ask them to stop reporting you to the credit bureaus. This has worked for some people.
Be advised, if the disconnection will aggravate a medical or protective services emergency, the utility may delay service shut-off for up to 21 days. The utility may require documentation from a professional involved with the medical emergency or crisis. The language regarding Wisconsin utility shut-off protection reads:
“No disconnect during extreme weather unless last resort after all other legal means of collection have been attempted and only if : 1) income is >250% FPG; health and safety would not be endangered due to presence of elderly, small children, or mentally disabled; and utility has an approved winter disconnection plan on file. (As of 09/2008 no utility has an approved winter disconnection plan on file.) Prohibited when heat advisory from the National Weather Service is in effect. 2) 21 day delay if physician, social services, public health or law enforcement officer certifies to medical or protective services (elderly, infants, disabled etc.) emergency. Customer must agree to payment plan.”
Your second option to avoid a Wisconsin utility shut off, if you cannot afford the deferred payment solutions offered and do not meet any of the criteria outlined above, is to file bankruptcy. Bankruptcy will keep your power on. You will be able to discharge the entire Wisconsin utility balance owed on the day your Wisconsin bankruptcy case is filed. However, your utility company may require a deposit to keep your service on. The rules regarding Wisconsin utility deposits are as follows:
“A deposit requested due to non-payment during the winter months cannot exceed the four highest consecutive bills during the last twelve months. A winter non-payment deposit can be required if you had debt incurred during the winter that was 80 days or more past due and you had the ability to pay. For residential service, the deposit will be refunded, with interest, after 12 consecutive months of prompt payment. You do not have to post a deposit if you can document that your income is at or below 200 percent of the federal poverty guidelines.”
If you have other outstanding debt, such as: credit card debt, medical bills, personal loan debt, and mortgage debt; a Wisconsin bankruptcy may be the right option for you. Contact our Wisconsin bankruptcy attorney to discuss your Wisconsin utility disconnection problem as well as bankruptcy solutions to your specific financial dilemma. Wynn at Law, LLC offers a free Wisconsin bankruptcy consultation. Wynn at Law, LLC has bankruptcy offices in Lake Geneva, Salem, and Delavan, Wisconsin. You can reach our Wisconsin bankruptcy attorney by phone at 262-725-0175 or by email via our bankruptcy website’s contact page.
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*The content and material on this web page is for informational purposes only and does not constitute legal advice.
If you have a legal obligation to file federal income taxes, then doing so is a requirement in order to have a successful chapter 13 bankruptcy case. Recently, a case was dismissed for failure to turn over the most recent four years of federal tax returns. The case was filed with the understanding that the+ Read More
The post Failure To File Taxes Leads To Bankruptcy Dismissal appeared first on David M. Siegel.
Failure To File Taxes Leads To Bankruptcy Dismissal If you have a legal obligation to file federal income taxes, then doing so is a requirement in order to have a successful chapter 13 bankruptcy case. Recently, a case was dismissed for failure to turn over the most recent four years of federal tax returns. The+ Read More
The post Failure To File Taxes Leads To Bankruptcy Dismissal appeared first on David M. Siegel.
I am officially annoyed this afternoon. Trying to run my client’s household income numbers through the Means Test and seeing him fail due to the cumulative amount of both his household income and military disability. I am annoyed because if he were receiving plain old social security disability, he would pass the means test with flying colors and we would be filing a chapter 7 bankruptcy for him tomorrow afternoon in the Portland, Oregon Bankruptcy Court. Why count one and not the other? Shouldn’t the vets do better than the civilians? Of course I have known about this rule since it was enacted ten years ago, but it still annoys me.
The original post is titled The Bankruptcy Means Test and VA Disability , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
Consumer Financial Protection Bureau (CFPB) filed its lawsuit in August 2013, against debt-relief services company Morgan Drexen. The CFPB alleges, among other things, that Morgan Drexen deceived consumers into paying unlawful up-front fees for debt relief services by disguising them as fees related to “sham” bankruptcy services. According to an article by Joanna M. Zdanys and Jessica Kaufman of the lawfirm Morrison & Foerster LLP “(t)he CFPB claimed that the defendant’s practices violated the Telemarketing Sales Rule (TSR), 16 C.F.R. § 310, and the Consumer Financial Protection Act (CFPA).
The action offered its share of drama even during motion practice, when the defendant was one of those that took up the sword against the Bureau on constitutionality grounds. It lost that motion last month but managed first to get the Court to hold that CFPB officials could be subjected to depositions. Trial was set to begin on February 10, 2015, but instead the court held an evidentiary hearing that day in connection with the CFPB’s motion for sanctions against the defendant for fabricating and destroying evidence.
At the hearing, CFPB attorney Gabriel D. O’Malley alleged that the defendant created or altered relevant bankruptcy petitions in June or July of 2014, after the CFPB had served its discovery requests on the defendant. The CFPB claims that the defendant’s former Chief Operating Officer tipped off the CFPB just last month that the defendant had altered dates on existing documents or fabricated bankruptcy petitions entirely. The defendant flatly denies these allegations and paints the former COO as a disgruntled ex-employee with a vendetta against the company. The court has not yet ruled on the CFPB’s motion.”
The post CFPB vs Morgan Drexen – fraudulent debt “relief” assistance appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
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