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  • Title: CFPB widens its debt settlement crackdown > NACBA
    Descriptive info: News Home.. Current Articles.. Archives.. 07.. Posted on October 07, 2013 13:31.. $1.. 4 million penalty on middleman sends a warning to others.. By Fred Williams.. Consumer financial regulators have opened a new front on the war against debt settlement companies that charge illegal upfront fees, going after a "chokepoint" payment processor that worked for several debt settlers.. The Consumer Financial Protection Bureau on Oct.. 3 announced a $1.. 4 million.. penalty.. against a payment processing company called Meracord LLC in Washington state and its owner, Linda Remsberg.. "Remsberg should have known that Meracord provided substantial assistance to its (debt settlement) partners by processing payments on their behalf, and that its.. partners were charging and collecting unlawful advance fees," the agency said in.. court documents.. Meracord isn't a debt settlement company itself, but it took payments from consumers and held them on behalf of a number of settlement companies, the CFPB said in its court complaint.. Meracord turned fees over to the settlement companies before people's debts were settled.. If a business is enabling bad actions that hurt consumers, then we will use our authority to stop them.. -- Steven Antonakes.. U.. S.. Consumer Financial Protection Bureau.. Going after middlemen like Meracord could help deprive scammers of the business support network they need to survive, experts said.. "When one company gets stung, they close up shop and move on," said Edward Boltz, president of the National Association of Consumer Bankruptcy Attorneys.. "This will make the lenders think twice.. and the support network.. ".. Under the Telemarketing Sales Rule, debt settlers are generally.. prohibited from taking fees.. before they succeed in settling consumers' debts, but upfront fees continue to drain the pockets of debt-burdened consumers.. CFPB Deputy Director Steven Antonakes said targeting Meracord puts other service providers on notice when they're dealing with potential violators.. "If a business is enabling bad actions that hurt consumers, then we will use our authority to stop them," Antonakes said in a press call.. "We are making the point here and it applies to  ...   the lenders think twice.. -- Edward Boltz.. National Association of Consumer Bankruptcy Attorneys.. "We are pleased to have this matter concluded so we can focus our resources on providing compliant payment services in the emerging payments and financial technology space," Remsberg said in the.. Meracord statement.. The settlement does not include an admission of wrongdoing.. Debt settlement companies promise to eliminate your debts at a fraction of their face amount without resorting to bankruptcy.. They counsel their clients to stop paying creditors and pay into a settlement fund instead, a risky strategy that can lead to collection lawsuits and trashed credit.. In a 2012 study, the bankruptcy attorneys association said that more than 500,000 Americans with a combined $15 billion in debt are enrolled in debt settlement programs, but the promises of debt freedom rarely pan out.. Only one in 10 programs results in repayment as planned, according to NACBA.. Although debt settlement itself isn't illegal, critics charge that it is so rarely successful that it amounts to a "last-dollar" type of scam, taking advantage of the desperation of consumers who are already struggling to meet their basic expenses.. The CFPB is trying to close loopholes and give violators little room to maneuver, but fee-collecting debt settlers have shown resilience, popping up with new tactics designed to get around restrictions.. The agency filed a.. lawsuit.. against Nevada-based Morgan-Drexen in August for running a debt-settlement operation under the guise of providing support for bankruptcy attorneys.. It previously obtained judgments against two companies that used Meracord as their payment processor; Payday Loan Debt Solution Inc.. and American Debt Settlement Solutions Inc.. The CFPB's move to cut off a support network for such operators "shows a lot of promise and sophistication that we haven't seen in consumer enforcement actions up till now," Boltz said.. See related:.. FTC bans upfront fees for debt settlement firms.. Read more:.. http://www.. creditcards.. com/credit-card-news/CFPB-fines-payment_processor-mercador-1282.. php#ixzz2h3vr5h41.. Compare credit cards here -.. CreditCards.. com.. Posted in:.. Actions:.. E-mail.. Permalink.. Online Resources.. Attorney Finder.. Consumer Tips.. Amicus Assistance.. Links and Articles..

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  • Title: Student loan debt should be treated like Detroit’s > NACBA
    Descriptive info: 24.. Posted on July 24, 2013 13:02.. Why can huge municipalities resort to Chapter 9 protection, but not 37 million Americans drowning in student loans?.. BY TIM DONOVAN.. Last Thursday, Detroit gained the dubious distinction of becoming the largest municipality in American history to declare bankruptcy.. In the days since, various partisan sources have weighed in on the story of a bankrupt major American city.. Over at Slate, Matt Yglesias argues that municipal bankruptcy should be easier and more common, to provide cities and townships with the tools required to shed the odious burden of crippling debt often caused by long-departed, ineffectual politicians:.. [.. ]a city is more like a company in the sense that the managers who created the problems are usually gone by the time the reckoning comes.. And even the best managers can t turn a city around unless they can direct a much larger share of the city s revenue to current services rather than paying off old debts.. While this may be true, it highlights the absurdity of our current student debt crisis: practically all forms of debt (including gambling debt and credit card debt) can be forgiven through bankruptcy but not student loans.. While deeply dysfunctional multinational corporations can declare bankruptcy at the drop of a hat, and even municipalities as large as Detroit can resort to Chapter 9 protection as a last resort to avoid their creditors, regular Americans with student debt are afforded no such luxury.. Before the frantic Reagan revolution, filled to the brim as it was with (mostly bipartisan) deregulation, bankruptcy was still possible for discharging student loans.. As the supply-side fever of Reagan s presidency swept through America into the 90s and the Clinton presidency, the deeply corrupted free market principles of deregulation and numerous blatantly pro-banking laws had washed ashore the massive (and fast-expanding) student loan system, with predictably disastrous consequences.. First, in 1976, Congress instituted a fairly reasonable reform to bankruptcy laws: To prevent unscrupulous students from amassing a number of expensive post-graduate degrees (only to immediately declare bankruptcy and simply wait out the seven years without credit), a five-year delay on bankruptcy protection was implemented for student loan debt.. In 1990, that waiting period was extended to seven years.. Hypothetically, by forcing students to delay dischargement, they would be given the necessary time to build equity, earn a good credit score, and acquire some wealth, which would in turn provide a key disincentive to the moral hazard that immediate bankruptcy might present to younger, less stable graduates.. And yet, for the banks, this wasn t enough: In 1998, the law was changed again, this time ensuring that federally backed student loans would be made completely and permanently nondischargeable through bankruptcy.. But for the banks, even this wasn t enough: In this system, private loans could still be discharged albeit after a seven-year waiting period and the self-inflicted destruction of one s credit and assets.. Still, the banks continued the push to deregulate: In 2005, the law was changed a final time, shielding private student debt from bankruptcy just like their federally backed kin.. Now, eight years after the law has passed, student loan collectors are some of the most predatory in the industry, and will take your car and your house, garnish your wages, and even go after your parents or other co-signers if you try to avoid repayment.. If you re fortunate enough to grow old in a world that offers the elderly Social Security while subsequently unfortunate enough to carry student loan debt all the way into retirement, predatory collection agencies can even garnish your Social Security check.. Bankruptcy law underwent a number of quick transformations, each systematically undermining the rights of students a little more than the last.. These developments would also conspire intentionally or not to contribute to the rising costs of college, our ballooning debt levels, and the staggering default rate.. That they re enormously popular among the banks and public-private corporations profiting off these loans nondischargeability should surprise exactly no one.. In the shadow of these onerous, misguided policy decisions, we find ourselves facing a student loan burden so enormous that its present value has actually eclipsed our national credit card debt.. Incredibly, the fundamental problem is quite simple: Our current system offers no incentives for loan originators to deny risky borrowers; consequently, student loans are much too easy to obtain.. Huge amounts of cash are offered to students without regard to the school they might attend or the major they might choose.. Colleges and universities happily raise prices (at  ...   from offering enormous debt packages to students unlikely to find work that will allow them the ability to repay:.. Lending institutions largely ignore the difference in default risk between majors since the federal government guarantees the loans.. Students and parents can likewise ignore the returns on different degrees and college more broadly, because culturally many see college as a moral good.. Offering desperate, impoverished students bankruptcy might seem like a cynical solution, a form of victim-blaming that largely punishes the naive children who took out bad loans.. But the consequences would be enormously helpful to society as a whole and shouldn t be blithely overlooked.. Banks love student loans because they aren t dischargeable and are consequently extremely stable; in the post-Recession world, safe investment vehicles are relatively uncommon; with interest rates at historic lows and credit for all but the most desirable borrowers still hard to obtain, securitized student loans have become an extremely attractive financial product.. The risk of bankruptcy would change this whole calculus: investors would suddenly need to be wary of lending out enormous loans to students highly unlikely to repay.. With students unable to take on enormous debt for degrees of questionable value from overpriced schools, they ll be forced to look to other options.. A number of excessively expensive schools would probably be forced to shutter (one estimate suggests half of all universities could close by 2030), but this might be more of a feature than a bug, as fewer students are exploited by college administrators armed with dubious statistics purporting to defend the long-term value of college.. If bankruptcy laws were reformed, there would surely be unintended casualties, as some students would find themselves without easy access to adequate loans or local universities.. But the social benefits would far outweigh the challenges faced by a small minority of disenfranchised students, particularly when costs start to drop across the board and tuition growth finally slows to the pace of inflation.. Some students may be forced to reconsider their majors, find cheaper schools, or survive solely on private scholarships, Pell grants and paychecks, but the consequences of these sacrifices should end up best serving those same desperate young adults, otherwise coerced into taking deep debt from institutions that routinely obfuscate the value of the degrees they offer, and provide little help to students hoping to find relevant work after they ve matriculated.. Reforming bankruptcy will not solve the student debt crisis, but it will provide a crucial first step by decoupling our politicians and our educators from the deeply seductive cash flow these predatory loans provide.. Student debt (and particularly student debt default) provides an enormous revenue stream to colleges, banks and the federal government by robbing naive young Americans hoping to improve their economic position.. Congress needs to party (legislatively) like it s 1997, and allow all student loans to be discharged through the same (onerous and punitive) bankruptcy process that other debtors enjoy.. In a recent article here on Salon, David Dayen lets Senator Elizabeth Warren explain the problem with our current priorities succinctly:.. Why should students who are trying to finance an education be treated more harshly than someone who racked up tens of thousands of dollars gambling?.. So, will the law be changed? Unfortunately, recent efforts have proven both unsuccessful and underwhelming.. In January, Senator Dick Durbin introduced the Fairness for Struggling Students Act, which would make private student loans dischargeable just like any other form of private debt.. While clearly insufficient (private loans only account for about 15% of total student debt), this would have at least helped: in the eight years since private loans were shielded from bankruptcy, delinquency rates have doubled.. Unsurprisingly, Senator Durbin s bill has floundered in the Senate, a major red flag even if this piece of legislation enjoyed broad support.. (It doesn t.. ) When considering the enormously powerful Wall Street banks which combined to spend over $100 million lobbying Congress in just the first eight months of 2011 this paints a portrait of a bill destined to die a quiet legislative death.. You want to fix our loan crisis? Provide struggling former students with the same protections afforded to Detroit: the promise that when all else fails, we ll be thrown the vital life-preserver of bankruptcy, a last-ditch salvation from the turbulent waters of crushing, overwhelming debt.. Until these wildly misplaced priorities are corrected, our mounting student debt crisis will only worsen.. Tim Donovan is a freelance author who blogs about Millennial issues at The Suffolk Resolves.. Follow him @tadonovan.. [Read More.. ]..

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  • Title: Student loan relief > NACBA
    Descriptive info: 10.. Posted on June 10, 2013 13:20.. Student loan debt remains at the forefront for many parents, an issue raised with Nick Pistor s story on Freeman Bosley Sr.. seeking donations for his daughter's college education.. Our nation s staggering student loan debt has a crippling effect on generations of borrowers ability to purchase a home or car, open a business, start a family, or save for their future.. Congress is considering various proposals to address this ticking student loan debt bomb, including preventing interest rates on federally subsidized student loans from doubling on July 1, converting private student loans to federal loans, or expanding loan forgiveness, income-based repayment, and  ...   but now is not eligible.. Private student loans are market-generated unsecured debts that do not deserve the protection from discharge given to low-cost federal loans, which come with many relief programs and other safeguards when borrowers are in financial distress.. Sen.. Richard Durbin of Illinois and U.. Rep.. Steve Cohen of Tennessee have introduced legislation (S.. 114/H.. R.. 532) to make private student loans dischargeable in bankruptcy, as they were until 2005.. Americans drowning in private student loan debt need Illinois and Missouri s legislators to co-sponsor this legislation and push for its passage.. Doing so would allow desperate borrowers of all ages a true fresh start.. Andy Miofsky Granite City..

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  • Title: Oh, the places you’ll go, graduate, but know what you owe! > NACBA
    Descriptive info: 30.. Posted on May 30, 2013 07:30.. With apologies to Dr.. Seuss, I d like to add some lines to his wonderful book Oh, the Places You ll Go!, which is a popular graduation gift for college students.. Seuss begins:.. You have feet in your shoes.. You can steer yourself any direction you choose.. You re on your own.. And you know what you know.. But you d better know what you owe because your debt is high.. Oh, the places you ll go once your student loans go bye-bye.. The last two lines are mine.. There are more than 38 million student-loan borrowers with more than $1.. 1 trillion in outstanding debt, according to the Consumer Financial Protection Bureau and the Department of Education.. A recent study by Fidelity Investments found that 70 percent of the class of 2013 is graduating with debt averaging $35,200, which includes federal, state and private loans, as well as debt owed to family and accumulated through credit cards.. Many graduates can t go any direction they choose.. They have to take any job they can get.. They have to move back home.. They can t buy a house or a car.. They don t want to get married and merge with someone equally indebted with student loans.. Consider the following:.. Between 2007 and 2010, the average student-loan balance for households increased almost 15 percent, even as Americans reduced other types of consumer debts, according to the CFPB.. FinAid.. org created a student-loan debt clock to show outstanding federal and private student loans.. It reached the $1 trillion mark on May 8, 2012.. If you include capitalized interest, total federal and private student-loan debt probably hit the $1 trillion milestone in late 2011, according to FinAid.. org.. Total student-loan debt outstanding surpassed credit card debt for the first time in June 2010.. A recent TransUnion study found that more than half of student-loan accounts are in deferred status, where the repayment of the principal and interest  ...   to school along with the rising cost of tuition, student lending has demonstrated consistent, year-over-year growth, said Amy Crews Cutts, Equifax s chief economist.. A year ago, the National Association of Consumer Bankruptcy Attorneys warned that the student-loan debt bomb would be America s next mortgage-style economic crisis.. There are congressional efforts to address the mounting student-loan debt.. However, much of the bickering centers on the coming interest rate hike for federal loans.. The rate is set to increase on July 1 from 3.. 4 percent to 6.. 8 percent.. The Republican-led House passed a bill that would tie the rates for subsidized and unsubsidized Stafford loans to the 10-year Treasury note plus 2.. 5 percentage points.. The bill faces opposition in the Democratic-controlled Senate and a veto threat from the Obama administration.. Whatever the rate, we need a long-term solution to the amount of debt families are taking on.. In the Fidelity survey, half of 2013 graduates with student loans said their level of debt surprised them.. They hadn t realized how much they had borrowed.. Thirty-nine percent said that if they had been aware of how much they would owe, they would have made different choices in their college planning.. So I say to the high school graduates heading off to college and planning to go down the street of student loans, listen also to these words from Dr.. Seuss: You ll look up and down streets.. Look em over with care.. About some you will say, I don t choose to go there.. With your head full of brains and your shoes full of feet, you re too smart to go down any not-so-good street.. Readers may write to Michelle Singletary at The Washington Post, 1150 15th St.. NW, Washington, D.. 20071 or singletarym@washpost.. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer s name, unless otherwise requested.. To read previous Color of Money columns, go to postbusiness..

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  • Title: Student Loans -- Do Criminals Have More Rights? > NACBA
    Descriptive info: 29.. Posted on May 29, 2013 13:20.. Student lenders have collection powers denied most creditors.. Credit card companies can't garnish your wages without a court order.. A federal student loan collector can garnish your wages just by sending a notice in the mail to your employer.. Credit card companies can't sue you after the statute of limitation has expired.. Even IRS debt has a ten year time limit on collection and can often be discharged in bankruptcy.. Student loans used to have a five year statute of limitation, then seven years, before Congress eliminated it altogether.. Common criminals like burglars and arsonists are protected from prosecution by a statute of limitations.. Murderers, kidnappers, federal student loan borrowers and the like -- you know, society's worst offenders -- have no statute of limitation.. They can be taken to court until the day they die.. With all of the special protections afforded federal loans under the law, it's not surprising a study by the National Consumer Law Center ("NCLC") found the Department of Education ("ED") to be abysmal at resolving consumer complaints.. NCLC found the culprit to be ED's penchant for abdicating its responsibility for student loans to private debt collectors.. The Department of Education awarded almost $1 billion in commissions in 2011.. Collectors insisted on stiff payments, ignoring rules that made borrowers eligible for leniency.. One collector working for Educational Credit Management Corporation received $454,000 in commissions in one year.. This is more than double the yearly salary of the commissioner of the Department of Education.. The CEO of Sallie Mae, a private student loan collector, has found the student loan business so profitable he owns his own golf course.. Unencumbered by the fiduciary duties expected of a government agency towards its citizens, private debt collectors are free to ignore complaints as costly distractions.. Indeed, a Department of Education audit found exactly that.. ED found collectors ignored verbal complaints, never passing them on to the Department of Education for appropriate action.. This level of disorganization has left borrowers dazed and confused.. AshleyJane Kneeland knows this better than most.. The onslaught of illnesses she's endured in the past few years is mind-boggling.. As an independent, high achiever, she graduated from high school early to attend George Washington University only to be diagnosed with rheumatoid arthritis in her senior year at the tender age of 21.. Her pain medication caused internal bleeding which resulted in anemia, leading to several hospitalizations.. When she did not improve, doctors upped their diagnosis to an undifferentiated connective tissue disease.. Undaunted, AshleyJane did not give up.. After receiving a Masters from the University of New Hampshire, she found full-time employment as an Activities Director of an elder care facility.. Working became a challenge.. Her doctors realized she had lupus.. This is an incurable disease that can cause kidney failure, a possibility her doctors have already warned her about.. Fatigue was a constant companion, and stress caused her symptoms to worsen.. The more stress she endured, the faster her condition deteriorated, a vexing problem for someone used to pushing herself to perform well under pressure.. To add insult to injury, she contracted shingles, a painful disease, suffered through 16 open skin ulcers, and continues to endure muscle spasms.. Working full-time became impossible.. Even a part-time job at the Concord Boys Girls Club proved to be too much.. With the help of family she managed to make her student loan payments.. She had to move back home to live with her parents to do it but honoring her debts was important to her.. This wasn't the life an independent young woman envisioned for herself when she went off to college to pursue her dreams.. She would give anything to have that life back.. As lupus forced on her an increasing dependency, she applied for Social Security Disability Income ("SSDI").. The Social Security Administration did not hesitate in finding her permanently and totally disabled.. She receives $832 per month.. She managed to survive only through the help of family..  ...   Stooges bureau where one drawer closes, only to have another one open.. Or to use another analogy, the light at the end of the chapter 13 tunnel has become an approaching freight train.. The 'fresh start' guaranteed by the U.. Bankruptcy Codes can become an empty promise for student loan borrowers.. With the more than one trillion in student loan debt now exceeding the amount of credit card debt, this isn't a problem that's just going to go away.. Student loan debt is being bundled together and sold to investors, much like mortgage backed securities, the same investment model which contributed to the economic collapse in 2008.. The student loan debt crisis has become a drag on the economy.. There has been some discussion in Congress about changing the Bankruptcy Code to give more relief to borrowers in financial distress.. Congress of course is not known for taking preemptive action against the interests of big business.. There are no heroes or headlines in averting a disaster.. The student lending industry has little incentive to be proactive, knowing a bailout saved them from ill-advised business decisions the last time around.. With the special protections bestowed on them by Congress, student loan collection can be a merciless process.. There's no bailout for the 'little guy.. '.. TIPS FOR STUDENT LOAN BORROWERS.. (1) Exhaust federal loan options before considering any private student loan.. You have far more rights.. If you can't afford your payment, federal loans are eligible for payment plans like Income Based Repayment ("IBR") that may lower your payment.. Educate yourself on the options available to you before you get too far behind.. Once you go into default, you no longer qualify for IBR and other programs.. It is common for 15% to 25% to be added to your loans as a collection cost.. You may want to consider working with a student loan lawyer to help get out of default before a wage garnishment, tax intercept, or lawsuit occurs.. (2) The first thing a student loan lawyer will ask you is what type of student loan debt you have -- federal, private, or state.. Just knowing your loans are with Sallie Mae won't answer this question.. Sallie Mae services both federal and private loans.. Start by checking the National Student Loan Data System.. This will list the type of loan, loan balance, and servicer for each loan.. If you don't see your loans there, you most likely have private or state loans.. Checking your credit report may help nail down this answer.. Asking your student loan servicer is another possibility since it's illegal for them to provide you with false information.. (3) There are no mandated payment programs available for private student loans.. Like a credit card, once you default, a private student lender can accelerate the entire loan balance, and sue you in court.. Your inability to repay this amount won't stop the collection process.. One of the few advantages of private student loans is that they are subject to a statute of limitation.. Once the statute has run, further collection becomes illegal.. Answering this question can be complicated.. Judgments are good in most states for 20 years.. Having a copy of the promissory note and your payment history will help a lawyer to assess your situation.. Collecting on student loan debt beyond the statute of limitation may be a violation of the Federal Fair Debt Collection Practices Act or your state's fair debt collection law.. The above is not intended as legal advice for your particular situation.. Questions should be addressed to student loan attorneys admitted to practice within your state.. Richard Gaudreau is a lawyer admitted to practice in New Hampshire (NH) and Massachusetts (Ma) with a specialty in bankruptcy and student loans.. He has litigated student loan issues in the U.. Bankruptcy Court, First Circuit Bankruptcy Appellate Panel, and Federal First Circuit Court of Appeals.. He may be reached through his website at attorneygaudreau.. com, by email at Richard@attorneygaudreau.. com, or by calling 603-893-4300..

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  • Title: Allow Private Education Loan Debts to Be Erased in Bankruptcy > NACBA
    Descriptive info: 28.. Posted on December 28, 2012 08:40.. Struggling borrowers should be able to discharge their private student loan debts.. By STEVE COHEN.. Steve Cohen is a Democratic representative from Tennessee.. Millions of Americans pursue college educations and training for new careers, which is good for them and for our nation.. Yet these efforts are costly.. This year, total student loan debt exceeded $1 trillion, more than any other kind of consumer debt.. Debt from student loans issued by private for-profit lenders is troublesome.. Unfortunately, current law prevents struggling borrowers from discharging their private student loan debts in bankruptcy like they can with other kinds of debt.. This situation must change.. Private for-profit student loans often lack consumer protections.. They typically have variable interest rates with no caps, exorbitant fees, and hidden charges.. Also, many lenders use aggressive, high-pressure tactics to target vulnerable individuals, including young people without much financial experience.. Private lenders are not required to and often do not provide the deferments, income-based repayment plans, cancellation rights, or loan forgiveness that are available to federal loan borrowers.. [Read John Hupalo: Discharging Private Student Loans Is Counterproductive].. Currently, educational debts survive bankruptcy unless the borrower can prove that repayment would impose an "undue hardship.. " To demonstrate this hardship, however, the borrower must pursue expensive legal action, entailing a full-blown trial.. This presents a Catch-22 because it forces a borrower, already  ...   principled policy reasons that don't apply to private student loans.. Also, private lenders do not deserve protection under the Bankruptcy Code because the "undue hardship" provision, first enacted in 1976, was intended to protect the taxpayer dollars that fund federal student loan programs.. Yet Congress, in 2005, extended this protection to for-profit educational lenders, even though no taxpayer money was at stake.. [Check out U.. News Weekly, an insider's guide to politics.. To address this problem, I introduced the Private Student Loan Bankruptcy Fairness Act, which would allow private education loan debts to once again be erased in bankruptcy just like other types of debts.. This will help ensure that people can improve their lives through education without fear of financial ruin.. Opponents of my legislation claim that making private student loans dischargeable will result in higher interest rates.. No evidence supports this claim, and it is telling that private loan interest rates have not decreased since 2005.. If anything, private lenders have an incentive to make risky loans, knowing that they will not be discharged.. By restoring bankruptcy dischargeability, my legislation will ensure that lenders only make prudent loans and will encourage private lenders to work with financially distressed borrowers to modify loan terms.. Current law unjustly punishes those who sought to improve their lives by getting an education but became victims of predatory lenders.. My legislation corrects this injustice..

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  • Title: Why The Student Loan Bubble Is Much Worse Than It Looks > NACBA
    Descriptive info: 06.. Why The Student Loan Bubble Is Much Worse Than It Looks.. Posted on September 06, 2012 08:43.. America is increasingly aware that the student loan bubble is a major problem for millions of students, families, and our nation as a whole.. While far too many politicians from both sides of the aisle talk in platitudes about the need for education, few if any of these politicians are willing to pull back the cover and expose the ugly reality embedded in current data on the student loan bubble.. Yes, America knows that total student debt now exceeds all other forms of consumer debt.. We also know that total student debt is now approaching $1 trillion dollars.. I personally believe that the cost of education at public and private colleges and universities has to adjust downward but that reality does not appear imminent.. What don t we know about student debt and how will it hurt us? Let s navigate.. A recently released report by Demos highlights that  ...   debt, student loans have worsened.. Their report finds that, while overall household indebtedness declined $53 billion from the first quarter of 2012, student loan debt rose $10 billion to reach its $914 billion peak.. The picture is even bleaker than it appears.. Although the delinquency rates for student loans rose to 8.. 9%, that number is understated.. It doesn t account for people who are currently in a deferral period from their loans or for students currently enrolled in college, who ve taken on more student loan debt than any preceding generation.. Should you exclude students currently in college, and who are therefore exempt from becoming delinquent, the delinquency rate rises from 8.. 9 to 21%.. That s a startling high number, double the amount of credit card delinquencies (10.. 9%).. A delinquency rate of 21% spells a near certain crash and doomsday scenario for both borrowers and lenders alike but will also serve as a serious drag on our economy as a whole.. Navigate accordingly.. Larry Doyle..

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  • Title: Student Loans: Debt for Life > NACBA
    Descriptive info: Student Loans: Debt for Life.. Posted on September 06, 2012 08:42.. This much we know: College pays.. You can lose your house to foreclosure, but never your education.. Four-year college graduates pay advantage over high school grads has doubled over the past 30 years.. If money for tuition is tight, the advice goes, borrow what you need.. Students have been listening.. In 2010 student debt exceeded credit-card debt for the first time.. In 2011 it surpassed auto loans.. In March, the Consumer Financial Protection Bureau announced that student debt had passed $1 trillion.. It grew by $300 billion from the third quarter of 2008 even as other forms of debt shrank by $1.. 6 trillion, according to a separate tabulation by the Federal Reserve Bank of New York.. In a press briefing at the White House in April, Education Secretary Arne Duncan said, Obviously if you have no debt that s maybe the best situation, but this is not bad debt to have.. In fact, it s very good debt to have.. If student loans are good debt, how do you account for the reaction of Christina Mills, 30, of Minneapolis, when she found out her payment on college and law school loans would be $1,400 a month? I just went into the car and started sobbing, says Mills, who works for a nonprofit.. It was more than my paycheck at the time.. Medical student Thomas Smith, 25, of Hamilton, N.. J.. , is $310,000 in debt and is struggling to make ends meet even before beginning to repay his loans.. I don t even know what I eat, he says.. I just go to the supermarket and buy the cheapest thing I can and buy as much of it as I can.. Then there s Michael DiPietro, 25, of Brooklyn, who accumulated about $100,000 in debt while getting a bachelor s degree in  ...   education (ethnomusicology, theater arts) that just isn t worth it from a strictly financial viewpoint.. (Money isn t everything, but try telling that to the collection agency.. ) Education benefits society by creating a workforce that creates wealth, pays taxes, and stays off welfare.. But state governments whose schools educate 7 in 10 students have raised tuition abruptly because of their own financial problems.. So far the federal government has offset the state cutbacks by boosting financial aid, but Education Under Secretary Martha Kanter testified to Congress earlier this year that this path is not fiscally sustainable.. There s a lot of speculation that college debt is the next bubble after housing, the latest sector in which prices leap above real value.. American colleges may not be turning out the kind of graduates that employers want.. In Academically Adrift: Limited Learning on College Campuses, NYU s Arum and sociologist Josipa Roksa of the University of Virginia write that employers are being forced to turn to foreigners or graduate and professional schools to fill jobs that they once filled with homegrown college graduates.. That s the value side.. The cost side is ugly, too.. The economic slump that began in 2007 has forced people to pay more for college even as it has driven more of them into it as a refuge from an unfriendly job market.. The National Center for Education Statistics projects that college attendance this fall will be up 19 percent from the fall of 2007.. Meanwhile, state and local support for higher education last year was the lowest in 25 years of measurement, in inflation-adjusted dollars per student, according to the State Higher Education Executive Officers Association.. Two-thirds of college seniors graduated with loans in 2010, and those who did had an average of about $25,000, according to the Institute for College Access Success.. Click the link to continue the news story..

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  • Title: Student loan debt is worse than it seems > NACBA
    Descriptive info: 05.. Student loan debt is worse than it seems.. Posted on September 05, 2012 10:06.. Student loan debt is worse than it seems.. By Lynn O'Shaughnessy.. (MoneyWatch) The student loan crisis continues to worsen, according to the latest quarterly figures from the Federal Reserve Bank of New York.. The NY Fed's Quarterly Report on Household Debt and Credit revealed that the delinquency rate for student loans, which is currently at 8.. 9 percent, increased during the second quarter.. During the same period, student loan debt rose $10 billion to $914 billion.. While student debt continued to grow, overall household debt declined by $53 billion to $11.. 38 trillion as Americans continue to pay down their debt and take advantage of extremely low interest rates.. Credit card balances ($672 billion) are at their lowest level since the second quarter of 2002.. Credit card debt is down 22.. 4 percent since the peak during  ...   the bank's explanation:.. These delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle.. This implies that among loans in the repayment cycle delinquency rates are roughly twice as high.. It's not surprising that student loan debt remains a problem child.. College prices continue to defy inflation rates and the biggest percentage price hikes are coming from public universities, which is where most middle and low-income students have traditionally depended upon for bachelor degrees.. It's more important than ever that families evaluate their options and use net price calculators to determine what the actual price -- rather than sticker price -- will be for them at any college or university.. And parents and teenagers must have honest conversations about what a safe level of college debt is..

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  • Title: Mortgage Registry Muddles Foreclosures > NACBA
    Descriptive info: 01.. Mortgage Registry Muddles Foreclosures.. Posted on September 01, 2012 10:08.. By GRETCHEN MORGENSON.. MORE good news from the housing front last week.. Pending home sales rose 2.. 4 percent in July, to their highest level since April 2010.. Mortgage delinquency rates are down: the Federal Reserve Bank of New York reported a decline of 6.. 3 percent at the end of June from the March quarter.. Granted, new foreclosures continued to be filed 256,000 people had a foreclosure added to their credit reports in the June quarter but that figure was the lowest since mid-2007, the Fed said.. In stark contrast to this improving backdrop are the legal battles still being waged over wrongful foreclosure practices.. The glacial progress in these cases is not surprising, given the crowded courts and combatants usual stalling tactics.. What is surprising is the fresh evidence these cases are turning up of cockeyed mortgage practices, during both the boom and the bust.. As these matters are adjudicated, perhaps we will finally learn whether these practices were intended or accidental.. Take the problem of questionable legal fees levied on troubled borrowers.. Although these costs may seem small in the scheme of things, they certainly add to the burdens of many hard-pressed Americans.. A foreclosure from Ohio highlights this problem.. The facts from this matter are central to a prospective class action filed by a borrower, who contends he was charged improper court costs and legal-related fees in his foreclosure.. The case involved legal moves taken against a bank in 2007 that  ...   Wells Fargo, noting that as trustee of a securitization it held the note backing the $160,000 first mortgage, sued Mr.. Kline and his wife, Patricia, in state court.. Because Mr.. Kline had also taken out a second mortgage, Wells Fargo sued the institution that it said owned the additional obligation.. Here is where Mortgage Electronic Registration Systems comes in, the company that runs the database set up by banks in the mid-1990s to speed the transfer of mortgages nationwide and track their ownership.. To save the costs of recording a mortgage s transfer from one institution to another, MERS acts as mortgagee in county land records.. But it does not own the note underlying a property.. Amid the foreclosure crisis, however, critics have contended that the registry actually served to hide the true owner of a mortgage, making it difficult for borrowers to get help in working out their loans.. The facts in Mr.. Kline s case seem to indicate another flaw with the MERS registry that it may not even track mortgages effectively.. MERS was the nominee for WMC Mortgage, an entity that held the second lien on the Kline property, according to Wells Fargo s court filings.. Oddly, lawyers for WMC confirmed that it had an interest in the loan, whose value was around $30,000.. In 2008, Mr.. Kline advised the lawyers for the banks that he would sell the house and pay off the loans, which totaled approximately $200,000.. He did so, paying the legal costs associated with the suit involving the second lien..

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  • Title: Registration Open: Preserving the Attorney-Client and Work Product Privileges > NACBA
    Descriptive info: 09.. Registration Open: Preserving the Attorney-Client and Work Product Privileges.. Posted on July 09, 2013 09:30.. Registration is now open for NACBA's next webinar,.. click here to get registered.. !.. Preserving the Attorney-Client and Work Product Privileges in Consumer Bankruptcy Cases.. Thursday, July 25, 2013 3:00 p.. m.. Eastern.. The privileges for attorney-client communications and attorney work product are often key to a successful, effective attorney-client relationship.. This webinar will review the basics of these privileges and cover important practice considerations, including the scope of these privileges (such as when the attorney has a client fill out a questionnaire or when the attorney or client makes notes on a schedule), the evidentiary requirements to establish each privilege, unintentional and intentional waiver of these privileges, and the effect of the bankruptcy context, with its duty of disclosure.. The webinar will emphasize practical steps to protect these privileges in consumer bankruptcy cases.. Featured Presenters:.. Johnie Patterson, Esq.. Walker Patterson, P.. Houston, TX.. Nancy Rapoport.. Gordon Silver Professor of Law.. William S.. Boyd School of Law, UNLV.. About our Sponsor:.. MyCase.. is a web-based law practice management software solution for solo and small  ...   entitled to a $25 discount (equal to the Member price for the webinar) that they may apply towards the purchase of.. one webinar in 2013.. (Log in to receive Member pricing.. Reminder, your username is:.. zachmanifold@gmail.. ).. When you are ready to redeem your 2013 webinar discount.. (whether for this webinar or another offered in 2013).. , enter the Discount Code WEBINAR-2013.. in the Discount Code box in the Shopping Cart during checkout.. If you have already used this Discount Code in 2013, you will not be eligible to apply it to this upcoming webinar.. Live Webinar Deadline:.. Customers who purchase this Webinar prior to midnight (Eastern) on Wednesday, July 24, 2013, will be automatically registered for the live webinar.. Purchasers after this time will have access to the recording of the live webinar.. GET REGISTERED NOW!.. Once you have purchased this Webinar, you will receive further instructions (by email) on how to access the proceedings and materials.. All customers who purchase this Webinar will have access to the recording of the live webinar once it has been posted on.. NACBA.. Sincerely,.. Jean Braucher.. Chair, NACBA Webinar Committee.. Member News..

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