What To Do When Creditors Sue

2012 Student Loan Forgiveness Act

Marcy — Sun, 01 Apr 2012 14:19:13 +0000

OFFICIAL SUMMARY

The following summary was written by the Congressional Research Service, a nonpartisan arm of the Library of Congress, which serves Congress.

3/8/2012–Introduced.

Student Loan Forgiveness Act of 2012 – Amends title IV (Student Assistance) of the Higher Education Act of 1965 to establish a 10/10 Loan Repayment Plan that allows borrowers of Federal Family Education Loans (FFELs) and Direct Loans (DLs) to limit their monthly payment on such loans to one-twelfth of 10% of the amount by which their adjusted gross income and that of their spouse (if applicable) exceeds 150% of the federal poverty level. Requires the Secretary of Education to determine a borrower’s repayment obligation under that plan on a case-by-case basis if the repayment formula would result in the borrower paying nothing and the borrower is not in deferment due to an economic hardship. Establishes a 10/10 Loan Forgiveness Program that provides FFEL and DL forgiveness to borrowers who, after the date that is 10 years before the date of this Act’s enactment, have made 120 monthly payments under the 10/10 Loan Repayment Plan or under another repayment plan that required them to make payments at least as large as those they would have made under the 10/10 Loan Repayment Plan. Credits the months during which an individual is in deferment due to an economic hardship as months for which payment was made for purposes of the 10/10 Loan Forgiveness Program. Caps the amount of loan forgiveness that the program will provide to individuals who become new borrowers after this Act’s enactment. Caps the interest rate on new DLs at 3.4% Amends the public service employee loan forgiveness program to forgive the DLs of participants who have made 60 (currently, 120) monthly payments on such loans pursuant to specified repayment plans. Includes primary care physicians in medically underserved areas in the public service employee loan forgiveness program. Allows certain borrowers to consolidate their private education loans as Direct Consolidation Loans, provided the private loans were made on or before the date of this Act’s enactment. Limits such borrowers to those who: (1) were students eligible for unsubsidized Stafford loans or PLUS loans under the FFEL or DL programs for their enrollment at an institution of higher education, or would have been had they been enrolled on at least a half-time basis; (2) borrowed at least one private education loan for such enrollment; and (3) have an average adjusted gross income that does not exceed their total education debt. Caps the interest rate on those Direct Consolidation Loans at 3.4% Requires borrowers to apply for such loans within one year of this Act’s enactment. Funds this Act’s programs from funds available for Overseas Contingency Operations.

NYLIFEORDEBT.COM GEARS UP FOR 14TH ANNUAL NATIONAL CONSUMER PROTECTION WEEK

Marcy — Mon, 05 Mar 2012 20:01:09 +0000

(New York, New York)– (March 5, 2012) – Marcy Einhorn Enterprises, LLC is joining with federal, state, and local government agencies and national organizations to celebrate the 14th annual National Consumer Protection Week (NCPW) March 4-10, 2012. During NCPW, groups nationwide share tips and information that help consumers protect their privacy, manage money and debt, avoid identity theft, and avoid frauds and scams.

This year, NYLifeordebt.com and Marcy Einhorn Enterprises, LLC will focus on Money, Debt, and the Law. Here in New York City, Marcy Einhorn Enterprises, LLC will be offering a discount to any community organization that books a 1 hour speaking event. Book this week, for an event at your community group or organization any time during 2012. “Consumers have many rights as well as responsibilities when it comes to dealing with debt collectors. People need to know about the legal consequences of unpaid consumer debts, such as credit cards, medical debt, and student loans,” stated Marcy Einhorn, the owner of Marcy Einhorn Enterprises, LLC, and a New York attorney.

Go to www.ncpw.gov to read, view, download and order multiple copies of educational materials provided by over NCPW partners, check out a calendar of events nationwide, and find out how you can host an event. The website’s blog features posts from consumer experts nationwide, and allows consumers to connect directly with them about a variety of consumer protection resources.

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NEDAP Blasts Capital One/ING Merger Approval

Marcy — Fri, 17 Feb 2012 21:10:46 +0000

Here, unedited, is NEDAP’s press release, criticizing approval of this merger:

STATEMENT

FOR IMMEDIATE RELEASE

February 17, 2012

CONTACT:

Sarah Ludwig or Alexis Iwanisziw, 212-680-5100

NY GROUPS BLAST FEDERAL RESERVE FOR APPROVING BEHEMOTH CAPITAL ONE-ING MERGER

Fed Ruling Puts Country at Risk and Rewards Bank

Engaged in Predatory Practices

New York groups today blasted the Federal Reserve Board for approving Capital One’s application to acquire ING Direct and create the fifth largest bank in the country.

“The Fed’s approval of this acquisition makes clear that the agency has learned nothing from the financial meltdown and global economic collapse, and has chosen instead to serve the bidding of banks over the public,” said Sarah Ludwig, co-director of NEDAP, one of six New York groups that spoke out today against the Federal Reserve’s decision. “The Fed has blatantly disregarded serious systemic risk issues, as well as powerful evidence of Capital One’s predatory practices in New York’s low and moderate income neighborhoods and communities of color.”

“The Federal Reserve has permitted the creation of yet another behemoth bank, despite overriding public interest in preventing banks from becoming too big to fail,” said Ruhi Maker, senior attorney with the Empire Justice Center in Rochester.

In a detailed comment letter presented to the Federal Reserve last fall, the New York groups called on the agency to deny Capital One’s application. In addition to systemic risk concerns, the letter cited Capital One’s inadequate community and small business lending in New York City, as well as numerous case examples of the bank’s abusive debt collection practices. In 2010 alone, Capital One filed more than 37,000 debt collection lawsuits in New York City’s civil courts – almost one in five of all such lawsuits filed that year.

“Approval of the acquisition unjustly rewards Capital One by allowing it to expand,” said Lauren Breen, an attorney with the Western New York Law Center. “Given the bank’s notoriously unethical and illegal debt collection practices, the Fed’s decision is a travesty.”

The New York groups joined with the National Community Reinvestment Coalition in expressing disappointment in the Federal Reserve’s approval of the acquisition.

# # #

The New York groups include DC 37 Municipal Employees Legal Services, Empire Justice Center, Legal Services NYC-Bronx, MFY Legal Services, NEDAP, and Western New York Law Center.

176 Grand Street, Suite 300 | New York, NY 10013 US

Crusading Prosecutor Needed

Marcy — Mon, 16 Jan 2012 13:55:36 +0000

Plea negotiations are underway for a big culprit in the mortgage meltdown in Queens County, however, the problem goes far beyond any individual actor. As described in today’s NYT’s, what is needed is a full-throttle investigation into the highest levels of decision making for the reckless lending and heedless securitization by the banks. The call has gone out for Obama to take a leadership position on this inquiry, and create an interagency task force to pursue civil and criminal wrongdoing at the institutions that had the greatest impact on creating the mortgage bubble. Multiple Federal agencies would need to cooperate with the investigation, including the SEC, the IRS, bank regulators. Someone like NY’s AG Schneiderman might need to be at the head of the task force. Schneiderman is conducting a comprehensive investigation of the mortgage chain, useful information in pursuing those who created the bubble.

Cordray Describes Focus of CFPB

Marcy — Thu, 12 Jan 2012 13:51:10 +0000

As reported by the Center for Responsible Lending: Nonbank financial firms will become a primary focus for the agency, including money transfer agencies, credit bureaus, and private mortgage lenders given that nearly 20 million Americans use their services and pay about $7.4 billion in fees annually. Cordray noted, “Many subprime loans during the housing bubble were made by nonbank mortgage brokers. Since most of these businesses are not used to any federal oversight, our new supervision program may be a challenge for them. But we must establish clear standards of conduct so that all financial providers play by the rules.”

CFPB Welcomes Whistleblower Tips

Marcy — Wed, 11 Jan 2012 15:00:13 +0000

The CFPB welcomes, and expressly protects, whistleblowers who have information about possible violations of Federal consumer financial protection laws. Section 1057 of the Dodd-Frank Act protects employees and their representatives from retaliation for reporting on vendors, contractors, and competitors who may have violated these laws. A recent press release advises:

Knowledgeable sources with information about potential violations of Federal consumer financial laws may email their information to whistleblower@cfpb.gov. Informants alsohave the option of calling toll free to (855) 695-7974 and following the instructions tospeak to a CFPB employee. You may elect to provide information anonymously. However, providing your name and contact information may facilitate any subsequent investigation and successful remediation of illegal conduct. If you choose to disclose your identity and contact information to the Bureau, you may still request confidentiality. To the extent consistent with law enforcement needs, the Bureau will not disclose your identifying information and will maintain your confidentiality as permitted by federal laws such as the Privacy Act, the Freedom of Information Act and any applicable Bureau regulations.

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chev — Wed, 04 Jan 2012 00:54:03 +0000

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Pew Study of Bank Fees Reported on in Hispanic Business News

Marcy — Fri, 28 Oct 2011 22:02:52 +0000

This article is reprinted from the Hispanic Business News:

High Fees, Charges Cause Bank Depositers To Close Accounts

Oct. 27, 2011

Angela Carter, New Haven Register, Conn.

In Connecticut, 73,000 Households — or 5.3 percent — are unbanked, meaning they lack a checking or savings account, and the numbers are significant nationwide.

According to a 2009 survey by the Federal Deposit Insurance Corp., 31 percent of U.S. households that closed a bank account cited either service charges, minimum balance requirements or overdraft fees as causes for leaving the mainstream banking system.

Frustration with the banking system is one of many economic and social factors fueling the Occupy Wall Street, Occupy New Haven and other ancillary Occupy protests.

Even more recently, The Pew Charitable Trusts examined state-by-state data on costs associated with maintaining a checking account. In October 2010, Pew collected data from the nation’s 10 largest banks by deposit volume but no individual state had data for all of them.

As of June 30,2010, seven of these 10 banks held 43 percent of all deposits in Connecticut, according to the FDIC.

Pew’s study of these data sources, collected from various points in time, shows the median monthly fee in Connecticut and the U.S. for checking accounts is $8.95; the median minimum combined balance to waive the monthly fee is $1,500 in Connecticut, compared to $2,500 nationally; the median overdraft penalty fee is $35 in the state and the U.S.; and the median overdraft transfer fee (after the penalty is imposed) is $10 statewide and nationwide.

Pew Wednesday released a state-by-state breakdown of banking fees. See it at www.nhregister.com.

Income Based Loan Repayments

Marcy — Thu, 15 Sep 2011 19:15:48 +0000

Today’s NYTimes reports on new federal statistics about student debt and a little-known program to help students repay their loans when they fall on hard times after graduation. This program is known as Income-Based Repayment, and you can find information about how it works here: http://www.ibrinfo.org/how.vp.html

There’s been a spike in student loan defaults that’s attributable not only to the bad economy, but to the for-profit college industry, which is growing at a fast clip. Those schools account for only 10% of college students but fully 50% of student loan defaults.

Here are some more statistics:

overall student loan defaults for the fiscal year that ended on 9/30/09 rose to 8.8% from 7% the year before;

in the for-profit sector, 15% of borrowers who began repaying loans defaulted during the first two years of repayment, up from 11.6% the year before;

the for-profit loan default rate is more than 2X’s the default rate for public colleges, and more than 3X’s the rate for nonprofit private schools.

The “gainful employment” rule would make these for-profit schools more accountable for these default rates. But there’s been a lot of push back against the rule from, you guessed it, the for-profit college industry lobby.

If you know someone in default, or facing default on their student loans, be sure to check out the possibility of Income-Based Repayment plans.

Student Loan Bankruptcy Bills Pending

Marcy — Tue, 02 Aug 2011 13:12:06 +0000

A coalition of Democrats have proposed bills in both the House and Senate which would offer bankruptcy protection to students who have taken out private student loans.

Back in the 70′s when the Bankruptcy Code was being revised, private student lenders managed to carve out an exception for themselves and students were denied the protection of listing their private student loans in a bankruptcy petition, a carve out that has never been given to any other private lender. The thinking at the time was to encourage private investment in higher education, but the carve out is back firing now when student loan defaults are over $1trillion, higher than even the amount of credit card defaults.

Although Federal student loans have many protections for students who are struggling to repay, such as loan consolidation, Income Based Repayment Plans, and other extended repayment options, even cancellation under certain circumstances, there are no such protections for student loans with private lenders.

In the Senate, S. 1102, The Fairness for Struggling Students Act of 2011 has been introduced by Senator Al Franken and is designed to amend the Bankruptcy Code in a similar fashion for the protection of student borrowers with private student loan debt.

The bills now pending would alleviate some of the disastrous consequences of these unpaid loans for students who, in some cases, are starting out with many thousands of dollars of private student debt.

H.R. 2028, introduced in the House on May 26, 2011 by Congressman Steve Cohen, of Tennessee, is intended to amend “the federal bankruptcy code to remove qualified educational loans as an exception to discharge from bankruptcy.” The bill has been referred to the House Judiciary Committee’s subcommittee on Courts, Commercial and Administrative Law.

If you’re a student with private loans, would this bill help you? Please be sure to post a comment and let us know.

This is the full text of H.R. 2028:

112th CONGRESS 1st Session H. R. 2028

To amend title 11 of the United States Code to modify the dischargeability of debts for certain educational payments and loans.

IN THE HOUSE OF REPRESENTATIVES

May 26, 2011

Mr. COHEN (for himself, Mr. DAVIS of Illinois, Mr. CONYERS, Mr. GEORGE MILLER of California, Mr. GRIJALVA, Mr. ACKERMAN, Mr. BERMAN, Mr. TOWNS, Ms. MOORE, Mr. BISHOP of New York, Mr. DOYLE, Mr. STARK, Mr. JOHNSON of Georgia, Mr. RYAN of Ohio, Mr. WATT, Ms. CHU, and Mr. POLIS) introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 11 of the United States Code to modify the dischargeability of debts for certain educational payments and loans.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Private Student Loan Bankruptcy Fairness Act of 2011′.

SEC. 2. EXCEPTIONS TO DISCHARGE.

Section 523(a)(8) of title 11, United States Code, is amended–

SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) Effective Date- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.

(b) Application of Amendments- The amendments made by this Act shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.