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Congress took no action so the interest rate on federal Stafford loans rose as of 12:01am July 1, 2013. We’re still here to tell the tale.
It was like a summer blockbuster movie, complete with heroes and villains, the halls of power, and tension right up to the last second.
The media jumped all over it, trying to wipe the public into a frenzy.
The funny thing is that most people I spoke with didn’t know or care that student loan rates were going to jump as of July 1, 2013.
In case you don’t know, the rate on federal Subsidized Stafford loans went from 3.4 percent interest to 6.8 percent interest on Monday, July 1, 2013. Congress could have prevented the leap, but ended up bickering like an old married couple.
The cost of this monumental inaction? About $4,598.77 per student.
More Reasons It’s Not A Huge Deal
The interest rate was set to rise on new subsidized Stafford loans only.
Existing loans remain untouched.
New unsubsidized Stafford loans, PLUS loans, Perkins loans, and private loans remain untouched.
As of now, the most you can get in subsidized Stafford loans over your entire education is $23,000.
How The Interest Rate Affects New Borrowers
At 3.4%, you’ll pay $4,163.40 in interest over a 10-year repayment term.
At 6.8%, you’ll pay $8,762.17 in interest over a 10-year repayment term.
It comes out to $38.23 per payment.
It’s a difference, but not a monumental one that shatters the record books.
Get Angry About Something More Productive
If you come out of school with student loans, you’re likely in trouble anyway. Your income doesn’t keep pace with the cost of living, jobs are scarce, and all but a few at the top of the academic ladder are pulling down enough money to pay the student loans and groceries.
Rather than looking at the interest rate, consider some of the repayment options available to federal student loan borrowers.
Make some noise with your Congressional representatives to prod them into creating some protections for you on the private student loan front.
Image credit: spaceninja
Student Loan Rates Rise, Sky Doesn’t Fall was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Many consumers and small business owners who consider bankruptcy protection are confused about the process due to many misconceptions or false information. While bankruptcy laws were updated in 2005, there still seems to be a considerable amount of misunderstandings about who can file and whether it damages your reputation. One of the most effective ways [...]
Every now and then I am asked whether debt from an SBA Loan can be discharged in a Chapter 7 bankruptcy. The short answer is "yes".
I am asked this question because it is linked to a government program. However, there is nothing special about a SBA loan compared to any other private business loan when it comes to bankruptcy. It is treated like every other loan. Like all other loans, however, a SBA loan would not be dischargeable if the loan was obtained by fraudulent means.
For the most part, business owners typically do not need to worry about whether their SBA loan will be discharged in bankruptcy. However, there can be a foreclosure issue. Many SBA loans are secured by a deed of trust on real property. Because of the deed of trust, the lender will have the right to foreclose on the property. In conclusion, even though you personally are no longer responsible for the debt, your lender can still sell your property through a foreclosure sale in a Chapter 7 bankruptcy.
Your After Bankruptcy Credit Report Your after bankruptcy credit report is a big part of your “fresh start” in bankruptcy. That’s why it’s my job, as your bankruptcy lawyer, to make sure your after bankruptcy credit report is right. Only a handful of bankruptcy lawyers see it that way, and I’m one of them. Mistakes [...]The post After Bankruptcy Credit Reports–Why You and Your Lawyer Need to Follow Up appeared first on Robert Weed.
A new study confirms what many American households continue to struggle with; debt from medical bills. When it comes to filing for bankruptcy such bills continue to be one of the main reasons why people seek legal protection. Besides rising medical costs, other reasons bankruptcy is commonly filed include unpaid mortgages and credit card debt. [...]
By John Clark
Actress Kelly Rutherford, who is embroiled in a very public custody battle with her former husband, Daniel Giersch, is filing for personal bankruptcy, according to a report from CBS News.
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Sources say the costs of the prolonged divorce battle, as well as the subsequent fight over child custody, has simply drained the finances of the former star of “Gossip Girl.”
Former Gossip Girl Files for Personal Bankruptcy Help
According to sources, Rutherford has paid roughly $1.5 million in legal fees during her effort to split from Giersch and retain custody of the couple’s two children, Hermes, 6, and Helena, 4.
Thanks to more than $2 million in debt, which would never be repaid with Rutherford’s current monthly income, which is reportedly just $1,279, the actress decided to file for Chapter 7 bankruptcy in California last month, according to reports.
In her bankruptcy petition, Rutherford claims that her assets are only worth a little more than $23,000, which pales in comparison to the more than $2 million in unpaid debts she reportedly owes, sources say.
And the actress has taken a significant pay cut since the end of “Gossip Girls,” the popular television drama for which she reportedly earned $486,000 during her final season of work.
To make matters worse, Rutherford also owes more than $350,000 to federal and state tax authorities, and has roughly $25,000 in credit card debt, according to sources tracking her bankruptcy filing.
In court documents, Rutherford claims to only have $11,487 in her checking account. Her other assets include $5,000 worth of furniture, $5,000 worth of clothes, and $1,500 worth of jewelry, sources say.
And according to sources, Rutherford has been forced to borrow tens of thousands of dollars from family and friends just to keep her head above water.
Bankruptcy Filing Follows Emotional Child Custody Dispute
Rutherford’s bankruptcy filing comes after she has spent several months fighting a decision by a Los Angeles judge that allowed her former husband to take the couple’s children to live with him in France.
Her former husband, who has been prohibited from visiting the United States because his visa was revoked, now lives in France, and the judge’s decision meant that Rutherford was travel long distances to see her children.
In a recent interview on ABC, Rutherford said her life has been “crazy,” and that her daughter recently told her that she wants to “come home” and “come back to New York.”
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for June 27, 2013 Atlus at risk after parent company announces bankruptcy If Detroit opted for bankruptcy, experts say wouldn’t encourage others Pfizer’s Quigley Can End Nine-Year Bankruptcy, Judge Says
Understanding differences between bankruptcy chapters can make a big difference in helping you obtain a favorable outcome for your situation. Most bankruptcies filed by individuals and small businesses include Chapter 7 and Chapter 13. When it comes to understanding which chapter you should file, your debt, income, assets, and financial goals will have a significant [...]
Great news for families needing to file bankruptcy in Fresno! In order to qualify for a Chapter 7 bankruptcy, most families have to pass the "means test". In very simple terms, the "means test" takes a family's income which is then reduced by certain expense allocation. If a family's net income is less than the established guidelines, the family qualifies to file a chapter 7 bankruptcy. If the income is higher than the set guidelines, then it becomes much more difficult to successfully complete a chapter 7 case.
The recent good news is that the median income guidelines were raised. Thus, more families qualify for chapter 7 bankruptcy. If you are single, the new median family income is $48,415. It used to be $47,433. A family of 2 is allowed $63,030. It was $61,752. A family of three is $67,401. It was $66,034. A family of four is now allowed $75,656. It used to be $74,122. If you have a larger family, add $8,100 for each member in excess of 4. You can view the guideline table at the United States Department of Justice's website: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm
Using the means test properly is important to a successful outcome. About two years ago, I had a family that did not qualify under the means test. However, the wife was pregnant. I waited to file their case until after their baby was born. Their family size increased by 1. Thus, I was able to use a higher median income and they passed the means test.
The new "means test" data changes frequently. These numbers should be good until November 1, 2013.
Modern day rebels have defeated the Imperial Storm Troopers, a.k.a. Midland Funding LLC!
A debtor sued by Midland Funding, LLC won at trial and is has now sued Midland Funding LLC for unfair practices and malicious prosecution.
In Fresno County and the rest of California’s Central Valley, Midland Funding, LLC, has filed thousands of cases on behalf of credit card companies and other creditors. Most of the time Midland hopes that the defendant never responds to the lawsuit. However, if the defendant responds, they hope to settle the case before it ever goes trial.
In Samuels vs. Midland Funding, LLC, 2013 Westlaw 466386 (S.D. Ala.), defendant Samuels fought Midland Funding. He did not settle the case but forced them to trial and won!. He then sued Midland funding. This case looked at whether it was permissible for Samuels to sue Midland after it lost at trial. So far, the court is saying that Samuels has a valid lawsuit against Midland Funding.
Before looking at the details in this case, let’s take a step back. Midland Funding is notorious throughout the country for buying debt in bulk. Just like how you can go to Costco and buy a 100 rolls of toilet paper in bulk, Midland Funding purchases blocks of debt at a discount. It then tries to collect on the debt. Their goal is to collect more money from debtors than it cost them to buy the debt. They are very good at what they do. The problem bulk debt purchasers have is that they sometimes fail to obtain the documents, or understand the facts well enough to win at trial.
In the Samuels case, the debtor was smart. He figured out that Midland Funding could not prove its case and refused to settle with them. By refusing to settle, Samuels forced Midland to trial. They were completely unprepared for trial. They showed up with no witnesses or documents to show the debt was owed by Samuels. Like many “bulk purchasers” of debt – they were hoping to settle the case or that Samuels would ignore the lawsuit so that it would not have to prove their case in front of a jury, or judge. They must have been shocked Samuels took them all the way to trial because they showed up with no witnesses or evidence to prove the debtor owed the debt. Needless to say, the Samuels won the case.
But, the story does not end here for Midland Funding. Samuels went on the offensive. He filed a second lawsuit against Midland Funding for violation of the Federal Debt Collection Act and malicious prosecution. Midland Funding’s high powered attorneys tried to kick the case out before it was tried by a judge or jury. However, they lost the motion and tried to win on appeal. However, they lost again. The court held that it was concerned with bulk purchasers of debt that were unable to prove their cases. Now it looks like Midland Funding has to convince Samuels to settle his case against them by paying money to him. I hope Samuels takes this case to trial. It would serve Midland Funding right if it is proven they were never in a position to win their case at the trial level.
The lesson to take from this case is to not be afraid of these national debt companies. Defend yourself! Make sure the claim is valid and that the debt collector can prove its case at trial. If they cannot do this before trial, they likely will fail at trial as well. It is unfortunate that very few defendants in Midland Funding cases know this. Do not be one of them.
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