You may recently have heard that student loan debt now exceeds credit card debt. Currently forty-four million Americans owe some $1.5 trillion in student loans. You may also have heard there’s a proposal in Congress that would make student loan debt dischargeable in bankruptcy just like any other debts. Among the bipartisan bill’s sponsors are …
What are the consequences if I default on my student loan? Read More »
Federal Parent PLUS loans are among the most confusing student loans that New York bankruptcy debtors owe. They aren’t like other government student loans because they’re made to the parent (obviously) of the student rather than the student himself or herself. This can lead to difficulties when parents realize they must pay for debts they …
One of the more controversial alternatives to New York bankruptcy for student-loan debtors is Public Service Loan Forgiveness (PSLF). I say “controversial” because many Washington politicians and policy types think it’s much too generous to debtors and should be pared back. PSLF is similar to other government income-derived repayment (IDR) programs, but, well, it is …
Student-Loan Bankruptcy Alternative Rejects 99 Percent of Debtors Read More »
Student loans may be difficult to discharge in a New York bankruptcy case, but debtors might still need to file if they pay the exorbitant fees charged by student-loan debt-relief companies. It’s been a few years since these outfits were in the news, likely because debtors have become more knowledgeable about income-derived repayment (IDR) options. …
New York State Sues Student-Loan Debt-Relief Companies Read More »
According to a study conducted by Credit.com last year, a surprising 73 percent of Americans die in debt, leaving behind a mean-average balance of $61,500. The most common form of debt was credit-card debt (68 percent), followed by mortgage debt (37%) and then others. Given how frequently Americans die with debt, what are the consequences …
It’s often a challenge to discharge student-loan debt in a New York bankruptcy case, which is why I have consistently recommended debtors with federal-education loans choose income-driven-repayment (IDR) plans if they find their monthly payments difficult to afford. These plans reduce monthly payments to a fraction of ten-year repayment plan and offer loan forgiveness after …
Income-Driven Repayment Plans Don’t Always Help Debtors Afford Homes Read More »
I recently discussed the question of whether it’s better to repay credit-card debt or student-loan debt. Many New York bankruptcy cases feature both types of debt, so similarly situated debtors might want to know which path is best. However, there is a third path open to debtors who are at least on top of their …
Many New York bankruptcy debtors owe both credit-card debt and student-loan debt, so debtors in similar circumstances might want to know if it’s better to pay down one rather than the other to avoid bankruptcy. It’s an especially important question because of the challenge in discharging student-loan debt. Maybe it’s better to focus on that …
Is It Better to Pay Off Credit-Card Debt or Student-Loan Debt First? Read More »
Evidence has been trickling in that strategic default—that is, default due to unwillingness to repay a debt rather than inability to do so—is not really a factor in mortgage defaults. At least, that’s what one study about unemployment and mortgage default found. A similar hypothetical question is whether New York bankruptcy debtors would strategically default …
Would Student-Loan Debtors Strategically Default If They Could? Read More »
In November, the Federal Reserve Bank of New York published a blog post discussing who defaults on student loans. In a companion piece, the branch’s economists investigated the extent to which student-loan defaults coincide with a bad economy. The intuitive answer may seem to be, “Yes,” but the question is important because student-loan repayment depends …
N.Y. Fed: Student-Loan Defaults Match Bad Economy Read More »
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