You Deserve a Fresh Start in 2014

ImageThe New Year is a good time to evaluate your financial house and consider whether getting a fresh start by filing bankruptcy is the best option for you.

If you have too much debt or feel like you are way over you head in bills, bankruptcy may be right solution for you to get a fresh financial start in 2014.

Bankruptcy wipes out all credit card bills, medical bills, and personal loans. It even erases deficiencies on short sales and repossessed vehicles.

Filing bankruptcy initiates a Court ordered “automatic stay.” The automatic stay immediately stops your creditors from trying to collect from you. Creditors are immediately stopped from garnishing your wages, repossessing your car, or selling your house or other assets at a sheriff sale.

The first step is to make an appointment to meet with an experienced bankruptcy attorney to discuss your financial options. The consultation is free. I don’t judge my clients and always treat everyone with the respect they expect and deserve.

Stephen M. Dunne, Esquire has been consistently voted and named one of Pennsylvania’s Bankruptcy Super Lawyers by Law and Politics published by Philadelphia Magazine and Pennsylvania Super Lawyer for the years 2011-2013.

If you know someone who needs a fresh financial start in 2014, please tell them that I can help them make 2014 the year for a fresh financial start.

Call Today: 215-551-7109.

Is Bankruptcy the Right Choice for You?

1. Bankruptcy may be the easiest and fastest way to deal with all types of debt problems.Bankruptcy is a process under federal law designed to help people and businesses get protection from their creditors.

2. Most bankruptcy cases are complicated. You should consider getting professional help.Bankruptcy is a legal proceeding with complicated rules and paperwork. You may want to get professional legal help, especially if you hope to use bankruptcy to prevent foreclosure or repossession. Dunne Law Offices, P.C. provides a free consultation to help you decide whether bankruptcy is the right choice.

3. Bankruptcy temporarily stops almost all creditors from taking any steps against you. This assistance is provided by the “automatic stay” that arises as soon as you file the necessary paperwork at the beginning of a bankruptcy case. Foreclosures, repossessions, utility shut-offs, lawsuits, and other creditor actions will be immediately stopped.

4. Bankruptcy can permanently wipe out your legal obligation to pay back many of your debts. This benefit arises because of the bankruptcy “discharge” that you get for successfully completing a bankruptcy case.

5. When a bankruptcy does not wipe out a debt, a chapter 13 bankruptcy (a “reorganization”) gives you the opportunity to catch up on that debt. For example, if you are behind on a home mortgage or car loan, bankruptcy will not usually allow you to cancel the mortgage or lien and still keep the property without repayment. If you want to deal with debts of that type in the bankruptcy process, you will need to propose a chapter 13 repayment plan. That requires affordable payments from your income over a period of three to five years.

6. The initial fee for bankruptcy is presently $306 under chapter 7 and $281 under chapter 13. The fee can be paid in installments over a period of 120 days.

7. If you file bankruptcy in Philadelphia, you usually do not need to go to court.You will have to attend one meeting with the bankruptcy trustee (not with a judge). Creditors are invited but rarely attend. You will not usually have to go to court for your bankruptcy case unless something out of the ordinary occurs.

Bank Deposits Guaranteed Up to $250,000 – Maybe

Money!Congress created the Federal Deposit Insurance Corporation (FDIC) in 1933 to ensure taxpayers were not on the hook for losses to depositors.

Today, FDIC stickers in every bank in America proclaim “Each depositor is insured to at least $250,000.”

 Is it possible for bank depositors to take losses on their deposits? Yes.

 Banks insure their own deposits through contributions to an insurance fund. Banks and the general public both falsely believe that the government will “pony-up” the cash if the insurance fund is depleted and protect taxpayers from a loss on their deposits.

However, Congress has never enacted a provision in law stating that insured deposits are guaranteed by the full faith and credit of the United States.

Congress has never legally guaranteed deposits.

Congress wants people to have “confidence” in the banking system and adopted a joint resolution in 1982 stating that it was the “sense of Congress” that insured deposits were backed by the credit of the United States. However, this resolution never became legal binding.

Henry Steagall, chairman of the House Banking Committee described the situation succinctly “I do not mean to be understood as favoring a government guaranty of bank deposits,” he said. “I do not. I have never favored such a plan.”

Let’s hope the banking and government-debt crisis in Cyrus doesn’t happen in the United States.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness  (PSLF) Program discharges any remaining debt after 10 years of full-time employment in public service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly payments.

 What is forgiven? The remaining interest and principal of the borrowers loans are forgiven.

 How many payments are required? The loan forgiveness occurs after 120 monthly payments made on or after October 1, 2007 on an eligible Federal Direct Loan. Periods of deferment and forbearance are not counted toward the 120 payments. Payments made before October 1, 2007 do not count.

Define public service employment? The borrower must be employed full-time in a public service job for each of the 120 monthly payments. Public service jobs include, among other positions, emergency management, government , military service, public safety and law enforcement (police and fire), public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations), public education, early childhood education (including licensed or regulated childcare, Head Start, and State-funded prekindergarten), social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization), public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations. Full-time faculty at universities, as well as faculty teaching in high-need subject areas and shortage areas (including nurse faculty, foreign language faculty, and part-time faculty at community colleges), also qualify.

Which loans qualify for the PSLF Program?  Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, and Federal Direct Consolidation Loans. Borrowers in the Direct Loan program do not need to consolidate in order to qualify for loan forgiveness. Borrowers in the FFEL program will need to consolidate into Direct Loans.

What should I do now? Submit the Employer Certification Form  to the US Department of Education annually  to ensure that the qualifying public service employment is properly recorded.

How do I erase my loans under the PSLF Program?  File a PSLF application with the US Department of Education after making 120 qualifying payments while working full-time in a qualifying public service job.

Disability Discharge of Federal Student Loans

The borrower’s permanent and total disability is grounds for a student loan discharge. Borrowers with FFELs, Direct Loans, and Perkins loans are eligible for this discharge.[1] This includes consolidation loans.

The definition of disability changed as of July 1, 2010. The new definition is less restrictive and is more favorable for borrowers because it allows discharges to be granted to borrowers who are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, can be expected to last for a continuous period of 60 months, or has lasted for a continuous period of 60 months.[2]

The borrower applies directly to the loan holder for a disability discharge. If the borrower has different loan holders, the borrower should submit a separate application to each loan holder.

In order to help ensure a more efficient application process, borrowers should follow these guidelines from the Department:

  1. Be sure to sign the application. A photocopy must contain an original signature.
  2. Separate applications must be submitted to each loan holder. Copies may be submitted. However, each copy must have an original borrower signature. Original physician signatures are not required on each copy.
  3. The application must be signed by a doctor of medicine or osteopathy who is licenses to practice in the United States.
  4. The doctor must complete the application.
  5. Doctors should not use medical abbreviations or insurance codes on the application.
  6. The doctor must provide more than a diagnosis. The doctor must also identify the medical condition and clearly and fully explain how the condition prevents the borrower from working and earning money.

The lender may continue collection activity until it receives the certification of disability.  The borrower may request an administrative forbearance to stop collection activity during the review period.

It is important for borrowers to realize that the Department of Education has a very high rate of denials due to “medical review failures.” However, the denial is not tied to an actual medical review. Instead, this is a generic denial category that can mean anything from a missing license number to the physician forgetting to check a box on the application form. The Department of Education often sends a follow-up letter to physicians that require a relatively prompt response and failure of the physician to timely respond may lead to a medical review failure. Borrower should not assume that a denial based on a medical review failure is tied to an actual medical review.

The Department of Education has set up a Disability Discharge Loan Servicing Center. The center can be contacted by phone at 1-888-869-4169, by email at disability_discharge@acs-inc.com, or by regular mail at U.S. Department of Education Disability Discharge Loan Servicing Center, P.O. Box 5200, Greenville, TX 75403-5200. Hearing impaired individuals with access to TDD can call 1-888-636-6401.

If borrower obtains a discharge, the balance of the loan is discharged.[3]

Dunne Law Offices, P.C.
1500 John F. Kennedy Boulevard, Suite 200
Philadelphia, PA 19102
(215) 854-6342 (Office)
http://www.thephiladelphiabankruptcyattorney.com


[1] 20 U.S.C. § 1087(a); 34 C.F.R.  §§ 674.61 (Perkins Loan), 682.402(c) (FFEL), 685.213 (Direct Loan).

[2] 34 C.F.R. § 682.200

[3] 34 C.F.R. § 682.402(c)(3)(ii).

Teacher Loan Forgiveness Program

Teachers who are full time and work five (5) consecutive years in certain schools that serve low income families are eligible to erase $5,000.00 of their federal student loans.

Math or Science teachers in eligible secondary schools and special education teachers in eligible elementary or secondary schools are allowed to erase up to $17,500.00 of their student loans in return for five (5) consecutive years of employment in certain schools that serve low income families.

The Teacher Loan Forgiveness Program under the FFEL Program and the Direct Loan Program apply only to borrowers with no outstanding loan balances as of October 1, 1998, or later.

FFEL and Direct Loan borrowers are not eligible for the Teacher Loan Forgiveness Program if their loans are in default status. If a borrower is in default status, it is imperative that they get out of default status by taking advantage of the Income Based Repayment (IBR) Program in order to establish their eligibility to participate in the loan forgiveness program.

It is important to note that teachers can take advantage of multiple loan forgiveness programs simultaneously. For example, teachers can apply for the Teacher Loan Forgiveness Program and the Public Service Forgiveness Program at the same time.

Check the following website for more information:

http://ibrinfo.org/

http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv4.pdf

http://studentaid.ed.gov/students/attachments/siteresources/PSLF_QAs_final_02%2012%2010.pdf

Dunne Law Offices, P.C.
1500 John F. Kennedy Boulevard, Suite 200
Philadelphia, PA 19102
(215) 854-6342 (Office)
http://www.thephiladelphiabankruptcyattorney.com