Texas Bankruptcy Blog : Texas Bankruptcy Lawyer & Attorney : Fears Nachawati law Firm : Chapter 7, Chapter 13, Consumer Bankrutpcy : Dallas, Fort Worth, Austin, Houston, San Antonio

President Obama has announced a plan that seeks to lessen the burden of paying back student loans. The plan calls for lowering the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent for eligible borrowers. This plan goes into effect in 2012 and any remaining debt would be forgiven after 20 years. The White House said about 1.6 million borrowers could be affected. The Obama plan also allows borrowers with direct loans from the government to consolidate them at an interest rate of up to a half percentage point less. This could affect 5.8 million borrowers, according to the White House.

Currently the total outstanding student debt is $11 trillion, more than the nation's total credit card debt. Federally guaranteed student loans have made borrowing for college easy, which has had two serious consequences: first, students are graduating with unprecedented debt. 56 percent of bachelor's degree recipients at public schools graduated with debt averaging about $22,000. Second, colleges and universities are continuing to raise tuition. The average in-state tuition and fees at a four-year public college rose an additional $631 this fall, or about 8 percent. In today's tough economy, many graduates are unable to find jobs, consequently the national student loan default rate for the 2009 budget year rose to 8.8 percent.

In order to guarantee repayment of federal loans, Congress made changes to the normal consumer protections. Student loans are not discharged in bankruptcy except under the most extreme circumstances. Your tax refund, and even your paycheck, can be garnished without a court order. The government can also take some federal benefit payments (including Social Security retirement benefits and Social Security disability benefits, but not Supplemental Security Income) as reimbursement for student loans. The government cannot take any amount that would leave you with benefits less than $9,000 per year or $750 per month. And, it cannot take more than 15% of your total benefit.

If you are struggling to pay student loans, speak with an experienced bankruptcy attorney and investigate options to restructure your finances. After discharging unsecured monthly bills like credit cards and medical bills, many debtors are able to make monthly payments under one of the available student loan repayment programs. Take control and use the law to your advantage!
 

 Individuals struggling with financial difficulty experience many forms of debt-related stress. Harassing phone calls, embarrassing collection letters, lawsuits, garnishments, foreclosure, repossession . . . financial distress can become a personal nightmare! Fortunately, there are federal laws that can help. A bankruptcy debtor receives several powerful legal protections during the course of a bankruptcy case that provide instant relief.

When an individual hires a bankruptcy attorney, the federal Fair Debtor Collection Practices Act (FDCPA) prohibits third party collectors from contacting the individual directly and must direct all communications to the attorney. The FDCPA provides immediate relief from collector harassment while preparing to file a bankruptcy case. This law applies to all third party collectors, such as collection agencies or attorneys, but does not prevent an original creditor from attempting to collect. While the FDCPA does not prevent a lawsuit, repossession, or foreclosure, the involvement of a bankruptcy attorney may delay these processes.

Debtors receive additional relief once the bankruptcy case is filed. The bankruptcy “automatic stay” becomes effective as soon as the case is filed. This stay is a temporary injunction automatically issued by the federal bankruptcy judge and prohibits all collection activity (with a few very narrow exceptions). The automatic stay is effective throughout the duration of the bankruptcy case, but can be modified or terminated by the court after a hearing. This powerful protection stops all creditors and collectors dead in their tracks, and stays court processes such as a lawsuit, garnishment, repossession, or foreclosure.

At the conclusion of nearly all consumer bankruptcy cases the court will issue a permanent injunction prohibiting creditors from collecting on pre-bankruptcy debts. This injunction is known as the “bankruptcy discharge” and relieves the debtor’s legal obligation to pay the creditor. The discharged creditor may not take any collection action against the debtor, which includes contact by phone or mail.

If you are experiencing creditor harassment, speak with an experienced bankruptcy attorney and learn how the federal bankruptcy laws can provide immediate relief. Your attorney can help restructure your finances to shape a better financial future. Call today and get the help you need.

Individuals buried in debt need fast relief.  The required relief may vary from case to case, like relief from creditor harassment, from a lawsuit, or from a pending foreclosure.  Fortunately, the bankruptcy process provides you with immediate legal relief from the time you hire an attorney.  As your case progresses, the legal protections grow broader in scope and more powerful in effect. 

The first legal protection starts when you hire an attorney to represent you during your bankruptcy case.  This protection is derived from the federal Fair Debt Collection Practices Act (FDCPA).  Under the FDCPA a debt collector is prohibited from direct contact with a debtor who is represented by an attorney.  When you hire counsel you are able to forward all communication from a debt collector to your attorney, and the debt collector may no longer contact you directly.  This protection stops harassing phone calls and threatening letters from third party debt collectors while you and your attorney are preparing to file your bankruptcy. 

The second powerful protection commences the moment you file your bankruptcy case.  The bankruptcy automatic stay stops all creditor collection action immediately and automatically.  This legal protection applies to all creditors whether or not the creditor is aware of the bankruptcy filing.  The automatic stay is a legal protection that immediately stops any pending lawsuit, foreclosure, garnishment, or other legal proceeding.  The automatic stay is effective during the duration of your bankruptcy case. 

The final protection is the order of discharge that occurs at or near the end of your case.  The discharge order is a court injunction that prohibits discharged creditors from taking any kind of collection action against you personally.  The discharge injunction forbids a discharged creditor from sending bills, making collection phone calls, or filing a lawsuit to collect on a debt.  This protection is final and permanent.  Violation of this court injunction has serious consequences, and may result in a federal contempt of court charge. 

If you are experiencing a debt problem and need immediate relief, consult with an experienced bankruptcy attorney and find out how the bankruptcy process can help you.  Whether you need to stop harassing phone calls, or end a legal proceeding, bankruptcy’s powerful protections can eliminate your debt and give you peace of mind.