My ITT Tech school closed. What Can I do about my Student Loan Debt?

how_does_Bankruptcy_workStudents from all of ITT Tech’s 136 locations were left without a school due to its bankruptcy and subsequent closure in September of 2016. If you are one of those students, what will you do about your outstanding student loan debt? Here is vital information about your debt options in the event your college goes out of business. If you have other inquiries about student loan debt, the skilled attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. are equipped to answer your questions and concerns.

Closed School Loan Discharge

One option is to apply for a Closed School Loan Discharge which, if granted, would release you from your student loan debt and reimburse you for what you have already paid toward the loan. This option is applicable to federal direct loans, Federal Family Education Loans (FFEL), or Federal Perkins Loans, but comes with specific eligibility criteria. A key date to note is May 6, 2016 which is 120 days prior to ITT Tech’s closing on September 6. This is the earliest date that you could have withdrawn from ITT Tech in order to be eligible for a Closed School Loan Discharge. If you were enrolled at the time of its closure, or withdrew on or after May 6, 2016, and did not complete the program for which you received federal loans, you may apply for 100% loan forgiveness if you aren’t transferring credits to another school for a similar program. If you were enrolled but on approved leave of absence during this time period, you would be considered eligible for this loan forgiveness option. Apply by filling out the Closed School Loan Discharge Application and submitting it to your loan servicer. You should continue to pay back your loans until you receive determination of whether or not your discharge has been granted or denied. For private loans, you must contact your loan servicer to learn of the options you have with them.

Transfer Schools

If you are interested in pursuing your education at a school that offers a comparable program to that which you were enrolled in at ITT Tech, you should discuss transferring with an advisor at your school of interest. Advisors will assess your coursework for the possibility of transferring credits and keeping you on your projected track of your educational goals. If you pursue a similar program with credits transferred from ITT Tech, you would not be eligible to apply for loan forgiveness through the Closed School Loan Discharge. However, if you transfer to a school to pursue a completely unrelated program than what you were enrolled in at ITT Tech, you may eligible for the Closed School Loan Discharge, provided you meet all of the other conditions.

Unexpectedly halting your education due to a school closure while saddled with student loan debt can be a major setback for your future plans. For a detailed review of your situation, contact a student loan debt relief attorney at McIntyre Thanasides who can review your options and help move you forward. Call us at 1-844-511-4800.

Do not ignore your student loan debt

student debtIt is estimated that U.S. student loan debt exceeds $1.2 trillion, with over 7 million individuals currently in default.  There is approximately $1.3 trillion of outstanding student loan debt in the U.S. that affects 44 million borrowers who had an average outstanding loan balance of $37,172.  It is further estimated that over 77 billion of dollars is currently in default.  Put simply – many who attend college or other professional schools are not producing the income necessary to pay their student loan debt.   In such situations, it is easy to give-up.  However, giving-up can be the worst thing you can do. The consequences of ignoring your student loan debt can be severe, including, derogatory credit reporting, garnishments of your paycheck, garnishments of your IRS tax refund, and even garnishment of your social security benefits.  The good news, there are options.  The difficult part for any consumer is navigating the various options available, fully understanding the ramifications of each, and making sure you are choosing the option that best works for you.

At the McIntyre Thanasides Law Firm we have formed a student loan law practice group devoted to helping consumers who need guidance in addressing their student loan dilemma and taking back their future. Contact us today to learn more.

Student loans weigh down many

Making a good living is the goal of many individuals who live in the state of Florida. To accomplish this it is often necessary to obtain a college or graduate degree. This endeavor is not only time consuming, but in many cases very expensive. Because few individuals can pay for a college education as they go, many turn to student loans. While these may make paying for school relatively easy in the short-term, more and more college graduates in the Tampa area are finding that they are starting the next phase of their lives with unimaginable debt that they are unprepared to deal with.

Some individuals are able make massive loan payments by skimping in other areas of their life. For example, one woman who accrued $100,000 in student loans through the course of undergraduate and graduate school, says after making her monthly loan payment, she has very little left to cover her living expenses. Approximately a quarter of her monthly income goes to pay her debt. As is illustrated by the fact that there is currently a trillion dollars in outstanding college loans, this is an issue that many individuals are likely facing.

It is possible that some who find it impossible to pay bills while still making ends meet may attempt to have their school loans discharged. Though discharging student debt is often difficult to do, there are situations where it might be a possibility. These situations include a borrower becoming permanently and totally disabled, the failure of a school to pay the student a refund he or she is owed, false certification on the part of the school regarding the eligibility of a student or when a school closes while a student is enrolled.

Occasionally, student loans can be discharged under bankruptcy. To accomplish this, it must be demonstrated that carrying that loan would result in an undue burden to the individual. In situations where that is not a possibility, other repayment plans may be available. Because it is difficult for most to determine their options, let alone the best way to proceed, many find it beneficial to consult a lawyer who is familiar with these issues.

Source: WRAL, “Young adults crushed under burden of college loan debt”, Jan. 16, 2014

Student loan debt increasing, leaving borrowers with few options

According to the Federal Reserve Bank of New York, student loan debt in the U.S. has reached $956 billion dollars. In just the third quarter alone, it increased by 4.6 percent.

Yet, the debt amount alone isn’t as troubling as the fact that the number of student loan borrowers who are at least 90+ days delinquent on paying off their loan balances also increased 11 percent. In fact, the number of student loan borrowers who have fallen behind on their payments is now higher than that reported for credit card debt.
Some experts have compared student loans to the subprime mortgage bubble because there are no lending standards (the government does not vet individuals for loans) and the debt has continued to rise beyond individuals’ means to pay it. Unlike mortgage debt, however, student loans are very difficult to discharge in bankruptcy.

Student loans are only dischargeable in bankruptcy if a debtor shows what is called “undue hardship.” Inability to pay for the loans is not undue hardship. While the government will let borrowers defer loan payments, private loan companies do not offer the same options. This means that many student loan borrowers are left without recourse while their student loan interest continues to build.

Yet, there are other ways to seek relief and make student loan debt more bearable. For example, many of the consumers who face large amounts of student loan debt also face overwhelming debt in other areas, such as credit card debt. By discharging the other debt through a Chapter 7 or Chapter 13 bankruptcy, borrowers can focus their efforts on paying down their student loan debt.

Source: CBS Money Watch, “Student loan debt nears $1 trillion: Is it the new subprime?” Jill Schlesinger, Nov. 28, 2012

Florida still ranks No. 1 in delinquent mortgages

Over the past year, on average, debt among Florida residents has greatly decreased. In fact, average debt dropped from $181,241 during the last three months of 2011 to $176,337 during the last three months of 2012. However, while this can be looked at in some ways as a positive, the fact remains that Florida ranks the highest in terms of mortgage delinquencies. Additionally, residents still also continue to struggle with student loan debt and many are also having financial issues when it comes to tackling credit card debt.

When speaking of mortgage delinquencies, on a national level the rate is 5.19 percent. In Florida, the rate is more than double the national average at 12.47 percent. The state ranks No. 1 in terms of homeowners being behind on mortgage payments, which puts them in direct threat of foreclosure.

Student loan debt also continues to be a problem. Just like other states, with the Great Recession, many found themselves out of work. Hoping to give themselves a competitive advantage, many of these people decided to go back to school. However, this was done at the same time that the country saw an increase in for-profit colleges and the cost of tuition rising. This led to many taking out thousands in student loans, only to graduate — and in many cases — still not be able to find a job due to the economy.

In talking about these types of debts, many wonder if they should file for bankruptcy. And while every situation is different, only being able to make minimum monthly payments on credit cards, falling behind on financial obligations and missing a mortgage payment are all definite signs that it is time to talk with bankruptcy attorney.

Source: Sun Sentinel, “Credit card debt, mortgage balances drop sharply in South Florida”, Donna Gehrke-White, Feb. 12, 2013

Our firm can provide information on the different types of debt relief solutions that may be available. To learn more, visit our Tampa bankruptcy page.

Florida residents: Take charge of out of control debts

Avoiding debt is top of mind for many Florida residents. Many budget and make purchases based on their needs and any discretionary income. However, there are those who ended up accidentally falling into debt during and after the Great Recession and many who are now living in constant fear of losing their homes and wage garnishments.

In order to get out of debt, the first thing is to realize exactly what debt is and how it works. In the simplest terms, people take on debt when they borrow money to buy something they would not be able to afford all at once. A perfect example of this is a college education or a house. These two purchases are normally considered OK.
However, there are those too who use credit cards to make purchases they otherwise could not afford. This becomes tricky when high interest rates leads to larger payoffs. Others too also get into the dangerous behavior of borrowing more debt in order to pay for other debts.

When it comes to credit card debt, many like to think that it is younger Americans who are not responsible with their money or simply do not understand how debt works. However, according to the U.S. Census Bureau, it is actually older Americans who have seen the largest uptick in debt. This alone is proof that no one is immune to debt.
Of course the advice is to only purchase what can be afforded, and for those larger purchases like a college education or a home, make sure that the monthly payments will be manageable. But, for those already living with massive amounts of debt, know there are options available.

For example, if medical bills have gotten out of control and credit card debt is continuing to pile up, and if these bills are putting a homeowner in jeopardy of losing their home, now is the time to talk with an attorney with experience handling bankruptcy and other debt relief options. Regardless of the situation, an attorney can evaluate the situation and provide insight into options.

Source: Consumer Affairs, “How to determine how much debt is too much”, Mark Huffman, March 26, 2013

Bankruptcy as a debt relief tool for struggling Florida graduates

It used to be that being a college graduate almost guaranteed a spot in the middle class — if not higher — for most Florida residents. However, now with the high cost of college tuition and the slow job market, many college graduates are finding themselves out of work and behind on student loans, a financial situation that can be quite discouraging for those who are trying to start their adult lives.

The U.S. Department of Education recently released data comparing delinquent student loan payments. According to the department, 11 percent were delinquent on their student loans in the third quarter of 2012. Comparing this to 2003 when only 6 percent were delinquent in the third quarter of the year really highlights just how bad the student loan debt issue has become.

At this point, student loan debt has reached $1 trillion. This makes student loan debt the second highest consumer debt, right behind mortgage debt. This debt also ends up affecting many aspects of a person’s life. For example, while many used to graduate, start working and buy their first home, many are now finding themselves extremely stressed and living back with their parents.

Of course this begs the question of just what can be done. While going to college is expensive — with the cost of tuition only rising — having a college degree still gives a competitive edge when it comes to finding a job.
This means that for many, the risk of not being able to pay back student loans is still worth it and most do not even think about what to do until after graduation.

Part of the issue with student loan debt is that unlike other types of debt — like that from credit cards — student loans are rarely dischargeable in bankruptcy. However, this does not mean that bankruptcy can still not be a valuable tool.

For example, let’s say a graduate has tens of thousands of dollars in debt. And, while some of this debt is due to student loans, other debts are tied to credit cards. If the debt from the credit cards is discharged through bankruptcy, this would free up limited resources that could then go toward student loans.
Of course though, this is only one type of example. What works for one person may not work for another. This is why those with debt are encouraged to reach out and speak to an attorney who has experience handling debt relief cases in Florida in order to learn more.

Source: Bloomberg, “Overdue Student Loans Reach Record as U.S. Graduates Seek Jobs”, John Hechinger, May 22, 2013