Student Loan Discharge in Bankruptcy? We NEED it.

Student Loan Discharge in Bankruptcy? We NEED it.

Forbes Magazine just published on a topic near and dear to my heart:  Allowing student loans to be discharged in bankruptcy.  (See full article here).

The problem with the article is that it is based on false premises.  The article states that other loans that are dischargeable are not government backed.  That is just completely wrong.  Home loans are all dischargeable, and they are backed by the federal government.  This is what caused the home loan crisis after-all.

The other point the author misses, is that school tuition has been dramatically increasing during the same period that bankruptcy was non-dischargeable.  This will suddenly stop once these student loans can fail through bankruptcy.  I would expect to see a dramatic decrease in student tuition costs if it becomes more difficult to get a loan and easier to discharge the debt.

All in all, the author comes around to the point that student loans should be dischargeable, if the colleges become accountable for repaying the loans that the tax payers have backed.  The problem with this, is that the wrong party is forced to be accountable.  The truly accountable party is the bank that loaned the loan that eventually failed.

What George Reef is missing is any accountability for the lenders.  He seems to clearly want to protect the banks, rather than the schools, or the government as he claims in his article.

All in all, student loans need to be dischargeable to make it more difficult to get student loans and eventually to lower the price of tuition.

Do I Need a Bankruptcy Lawyer?

I’m revisiting this popular thread to explain why you need a bankruptcy lawyer.  Bankruptcy is very complex.  You may have had a friend or known someone that made it through without an attorney.  They were lucky, or they lost assets.  It’s very unlikely that you would not benefit from having an attorney.

Bankruptcy lawyers have the knowledge and skills to prevent you from losing assets.  The cost of a bankruptcy lawyer goes to paying for more than just the filing fee.  Bankruptcy lawyers have lots of knowledge and skills in planning prior to filing.  It’s often true that once you file your case, you are stuck and you cannot dismiss your case.  It is very important to do all of your planning and arranging your finances prior to filing bankruptcy.

Remember, if you ever need assistance with your bankruptcy, to contact us and we can help you determine if bankruptcy is right for you.

Take Care in Your Tax Lien Selection!

I have clients that purchase small tax lien properties.  These properties tend to be cheap, and easy.  These investors are looking to make money on the interest rate rather than the property.  Even if this is the case, you still need to do your due diligence.

Even though my attorneys’ fees are very reasonable (far more reasonable than any competitors….), these fees are still an expense in your tax lien purchase.  Reasonably often, on these smaller properties the owners do not want to pay the tax lien amount because the property is not worth very much and you may end up going through the foreclosure process.

I have had a couple of cases where my fees are more than the cost of the property.  This is not a place you want to be.

It always pays to do your due diligence on the property, even if you are just investing for the interest rate returns.

Tax Lien Time!

It’s that time of year.  If you’ve purchased tax liens that are seasoned more than 3 years, you can now start to begin the foreclosure process.  This process takes a fair amount of time, and I would not expect it to be completed for about nine months.

The process is primarily designed to notice all parties that might have an interest in the property.  This requires hand service and then, if you cannot notice all parties in person, service by publication.

Once notice has been properly completed, we can move onto the defaulting of the loan, or into the litigation phase of the judicial foreclosure.

The litigation aspect is fairly unusual, so there is no need to go into that in detail.


The TRUTH about BOA’s Mortgage to Lease Program

You have probably heard about this new mortgage to lease program that Bank of America is touting as the next solution to the foreclosure crisis that is again looming as many more Adjustable Rate Mortgages are coming due. Many people may find this option appealing, in general — to stay in the same home you were in, pay less per month and have the rest of the debt forgiven. However, it results in a worse solution for people than merely just walking away from the home, but allows the bank to continue to profit off of you.  You will still have the credit hit of the foreclosure, and instead of living in the house without a house payment, you will be making a monthly payment to the bank. Read More

Avoid Early Settlement of Your Claim

I just had a consult with a potential client.  During the conversation, the client informed me that she was being pressured to settle quickly by the opposing insurance company for merely her medical costs.  In my experience, if you’re injured in an accident that was not your fault, you should not have to pay for anything — in fact, you probably have an additional claim to pay you for injuries, pain & suffering. Read More

Student Loan Debt (Part 1) – Cause of Increase

This is a multi-part post on student loan debt.  Part one is about the cause of the increase in student loans.  Part two is about the ramifications of the student loan debt.  Part three offers some possible solutions to the problem.

For the last 14 years, student loan debt has rocketed.  This increase in student loan debt is tied completely to the increase in tuition.  Many commentators claim that this increase in tuition is due to the increase in costs of tuition, the required tuition expense, the costs of staffing and all of the other expenses that a college incurs.  I fully disagree.   Read More

TaxMasters Files for Bankruptcy

You probably know of TaxMasters.  The company was constantly on the television advertising for tax settlement services.  I remember one commercial where the advertisement had many testimonials claiming, “TaxMasters settled my ten million dollar debt for three cents.”  Of course that is an exaggeration, but you know the type of commercials I am talking about. Read More

Federal Government as New Landlord?

According to an Associated Press article, the Federal Government through the Federal Housing Finance Agency is now collecting investor opinions on whether and how to begin converting the approximately 248,000 federally owned homes into rental properties. Read More

The Daily Show and The Forecloser

A few days ago, we did a posting on a homeowner who foreclosed upon a Bank of America Branch.  The Daily Show picked up the story and here is the result: