Money Wise Law

There Isn’t a Solution to Every Student Loan Problem

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In this TikTok Live, we discuss various aspects of student loans, bankruptcy, and debt collectionin a lively Q&A format, providing insights into navigating these complex financial issues.

Key Topics Covered
Borrower Defense to Repayment
  • Definition: A federal forgiveness program allowing borrowers to have their student loans forgiven if they can prove their school misrepresented the quality of their education.
  • Eligibility: Must prove that the school’s misrepresentation caused you to take out the federal student loans.
  • Process: Submit a claim to the Department of Education with supporting evidence. The review process can take years.
  • Resources: Numerous online groups and resources can provide documents to strengthen your claim.
    • Challenges in Student Loan Forgiveness
    • Lawyer Assistance: Not all lawyers claiming to assist with student loans are truly specialized in that area. Many are primarily bankruptcy lawyers.
    • Limitations: There is no universal solution for all student loan problems, but various programs can provide relief, such as income-driven repayment plans, public service loan forgiveness, and borrower defense to repayment.
      • Co-signing Student Loans
      • Impact on Credit: Co-signing a loan means the debt will appear on your credit report. If the primary borrower defaults, you are responsible for the payments.
      • Advice: Have a serious conversation with the borrower if they are not making payments.
        • FAFSA and Federal Student Aid
        • Importance: Submitting the FAFSA (Free Application for Federal Student Aid) is crucial for determining eligibility for federal aid.
          • Bankruptcy Considerations
          • Chapter 7 and Chapter 13: Different rules apply depending on the type of bankruptcy. For instance, Chapter 13 may require court permission to take on new debt.
          • Asset Exemptions: Each state has different exemption levels for assets you can keep during bankruptcy.
          • Professional Advice: Consulting a bankruptcy lawyer can help ensure a smooth process and prevent potential issues.
            • Income-Driven Repayment (IDR) Plans
            • Choosing the Right Plan: IDR plans can lower monthly payments and lead to forgiveness after 20-29 years.
            • Flexibility: If you choose the wrong plan, you can change it later.
              • Dealing with Debt Collectors
              • Payment Allocation: If a debt collector refuses to show where your payments went, you may need to sue for an accounting.
              • Defensive Approach: Stand your ground if you believe you do not owe the debt, and let a judge decide if sued.
                • Special Cases and Questions
                • Medical Debts: Discuss specific situations with a bankruptcy attorney to explore possible solutions.
                • PSLF (Public Service Loan Forgiveness): Concerns about program elimination are common, but current guidelines should be followed.
                  • Listener Questions
                  • Borrower Defense: Can file claims if defrauded by the school.
                  • Bankruptcy and Car Loans: Can keep the car if payments continue.
                  • Credit Report Issues: Obtain free credit reports from annualcreditreport.com to check for creditors and judgments.

                    • Join me on TIkTok every Monday and Wednesday for more advice on handling your debt problems.

                    The post There Isn’t a Solution to Every Student Loan Problem appeared first on MoneyWise Law.

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                    Money Wise LawBy Jay S. Fleischman
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