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Can a debtor file for bankruptcy more than once?

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While filing a bankruptcy case is usually not as stressful or difficult as many debtors believe, the process is not something anyone wants to repeat. Lawmakers realize that some debtors may experience more than one financial crisis during their lifetime that requires the assistance of the bankruptcy court to resolve.  It allows debtors to file bankruptcy again if they find themselves in another financial situation where they cannot pay their debts.  The Bankruptcy Code allows debtors to file bankruptcy on more than one occasion.  There are no restrictions on the number of bankruptcy cases a debtor can file.  However, the bankruptcy code does limit the number of bankruptcy discharge orders a debtor may receive.

How long must I wait to file another Chapter 7 bankruptcy petition after having filed a prior Chapter 7 bankruptcy petition and receiving discharge?  A debtor must wait eight years between Chapter 7 bankruptcy cases to be eligible for another bankruptcy discharge under Chapter 7.

How long must I wait to file another Chapter 13 bankruptcy petition after having filed a prior Chapter 13 bankruptcy petition after having received a bankruptcy discharge? The time you must wait between Chapter 13 cases is two years. 

How long must I wait to file a Chapter 13 bankruptcy petition after having filed a prior Chapter 7 bankruptcy petition and having received a bankruptcy discharge?  Four years is the waiting time between filing a prior Chapter 7 and receiving a discharge and filing a new Chapter 13 bankruptcy petition. 

How long must I wait to file a Chapter 7 bankruptcy petition after a prior Chapter 13 bankruptcy petition was filed and received a bankruptcy discharge?  A debtor must wait six years before filing a Chapter 7 case and be eligible for a bankruptcy discharge.

Suppose you previously filed a Chapter 13 bankruptcy petition that was a 100% plan, in other words, 100% of the money owed by the debtor was paid back to the creditors via the Trustee. In that case, there is no waiting period to file a Chapter 7 bankruptcy petition or a Chapter 13 bankruptcy petition. 

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Bankruptcy is intended for the honest but unfortunate debtor. Filing for bankruptcy gives a debtor a fresh start recovering financially from burdensome credit cards, medical bills, lawsuits, wage garnishments, and repossessions.  By filing a Chapter 7 bankruptcy petition or a Chapter 13 bankruptcy petition, a debtor gets out of debt, protects their retirement accounts or other financial savings instruments covered by the Bankruptcy Code, and any monetary settlements from workers’ compensation claims, or on-the-job injuries.  Better yet, a debtor can retain any property that’s exempt pursuant to the Bankruptcy Code or Florida Statues. 

However, filing a bankruptcy case and receiving a bankruptcy discharge are two separate matters. The distinction between a bankruptcy filing and a bankruptcy discharge becomes very important when you are considering filing bankruptcy again.

What is a Bankruptcy Discharge?

The goal of filing a Chapter 7 or Chapter 13 case is to obtain a bankruptcy discharge. The bankruptcy discharge eliminates your legal responsibility to repay a discharged debt. Creditors are prohibited by law from taking any actions to collect a discharged debt. That includes wage garnishments, filing debt collection lawsuits, or sending collection letters. If you file a bankruptcy case but do not receive a bankruptcy discharge, your legal liability to repay debts remains and creditors may sue the debtor to collect the debt when the bankruptcy case is dismissed.  

Why Do People File For Bankruptcy A Second Time in Florida?

Debtors throughout Florida file for bankruptcy for a number of reasons.   may file a Chapter 7 or a Chapter 13 bankruptcy petition gain. Regardless of the underlying reason a debtor having to file another bankruptcy petition,  the common factor in all cases is that the person cannot afford to pay his or her debts because of periods of unemployment,  a reduction in income, the death of a spouse, divorce or separation, loss of a business or downturn in business, a sudden illness or accidental injury, overuse of credit cards, and just plain general poor financial management.  Unfortunately, someone may experience several financial hardships over the course of their lifetime. While some financial hardships may not require filing for bankruptcy, a debtor may feel the need to file bankruptcy again. 

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For that reason, the Bankruptcy Code does not prevent a person from filing bankruptcy again. But it does limit the number of bankruptcy discharges a person can receive during a specific period. It is best to consult an experienced Orange Park bankruptcy attorney if you believe you need to file bankruptcy again. A Florida bankruptcy lawyer can analyze your current financial situation, explain your various bankruptcy and non-bankruptcy options for debt relief, and help you choose the best debt relief option for you.

 

Contact a Bankruptcy Attorney in Orange Park for a Free Case Review

The decision to file a Chapter 13 or a Chapter 7 bankruptcy case should only be made after careful consideration of all debt relief options. If you are struggling to pay debts each month, filing for bankruptcy relief may give you the fresh start you need to recover after a financial crisis.

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Bankruptcy Attorney Tony Turner represents individuals in Orange Park, Jacksonville, Lake City, Deland,  St. Augustine, Daytona, and the surrounding areas.  If you are ready to discuss your bankruptcy options, contact The Law Office of Tony Turner at (904) 679-2020 or use the online form to schedule your free consultation with an Orange Park, Florida bankruptcy lawyer today.  

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When Can Student Loans Be Discharged In Bankruptcy?

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Student loan debt has skyrocketed past credit card debt in the United States. Mortgage debt is the only debt category with a higher amount in debt compared to student loan debt. According to one source, over 44 million individuals owe a combined $1.5 trillion in student loan debt. Graduates in 2017 owed an average of $40,000 in student loans. Most students spend over 19 years paying off loans they received for their college education. Sadly, almost 40 percent of borrowers are looking forward to defaulting on their student loans by 2023. When student loan debt is not dischargeable in a bankruptcy case, it is difficult to comprehend what a borrower should do if s/he can’t afford student loan payments.

Student Loans Be Discharged In Bankruptcy

Discharging Student Loans in a Chapter 7 Bankruptcy Case

Most student loans are not eligible for a bankruptcy discharge. Some debtors may qualify for a discharge of student loans. However, debtors must meet strict eligibility requirements to discharge student loans in bankruptcy. Moreover, the court must determine that debtor will experience undue hardship if the debtor requires to repay the student loans.

In February 2018, The Education Department announced that it would be reviewing the requirements for determining if a debtor qualifies for a bankruptcy discharge of student loan debt. Until the federal government changes the standards, the bankruptcy courts continue to apply the Brunner Test to determine if a debtor qualifies for a student loan discharge in Chapter 7.

The Three-Prong Undue Hardship Test for Discharging Student Loans in Bankruptcy

The court case of Brunner vs. New York State Higher Education Services Corp. established the three requirements for determining whether a debtor will experience undue hardship if required to repay student loans. Before a debtor can discharge student loans in Chapter 7, the court must find that the debtor meets all three requirements as outlined in the Brunner case.

The three-prong undue hardship test for student loan debt examines three factors:

  • Can the debtor maintain a minimal standard of living? The court examines the debtor’s anticipated standard of living if the debtor continues to repay the student loans. Basic living expenses such as food, clothing, and shelter include in the calculation of the minimal standard living requirement. There are some optional expenses, such as gym memberships, cell phone plans, and cable television. Typically they do not consider basic living necessities to evaluate a minimal standard of living.
  • Whether the debtor’s current financial situation is expected to continue.  If the debtor is being jobless for a short time, the debtor may not qualify for an undue hardship discharge. The debtor’s financial situation should be to continue for most of the term of the student loan. For instance, a debtor who may never work again because of a permanent disability may meet this requirement.
  • Has the debtor made a good faith effort to repay the student loan debt? The debtor must demonstrate that he or she paid the student loan payments until financial circumstances made it impossible to continue paying the monthly payments. The court may also consider whether the debtor tried to modify the loan payments, applied for a forbearance agreement, or made other financial sacrifices to meet their obligations under their student loan notes.
The interpretation of the Brunner requirements can vary from one jurisdiction to another jurisdiction.

It is important to work with an experienced Florida bankruptcy attorney who understands the Brunner Test. You will need assistance from a bankruptcy attorney in Florida to prepare and file the necessary documents to request a hearing. You also need an experienced attorney to argue why you should receive an undue hardship discharge of your student loans during the court hearing.

Call an Orange Park Bankruptcy Attorney for More Information

Tony Turner assists clients in Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas as they seek affordable solutions to debt problems. If you want to explore bankruptcy options to get rid of debt, contact The Law Office of Tony Turner for a free consultation.

Call (904) 679-2020 or use the online form to schedule your free consultation with a Florida bankruptcy lawyer.

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Three Debts That You Cannot Discharge in a Florida Bankruptcy!

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Scales of Justice, wooden mallet, discharge debt, student loansWhen a debtor files for bankruptcy relief, the “end game” is to get out of debt.  Most unsecured debts are eligible for a discharge in Chapter 7 and Chapter 13 bankruptcy discharge. But there are several debts that one cannot discharge in bankruptcy including: alimony or spousal support; child support; most debts owed to government entities; income taxes; and student loans. In some cases, a debtor can discharge income taxes if the taxes meet all of the requirements for discharge. Creditors may object to a debtor receiving  a bankruptcy discharge by filing an adversary proceeding with the court.   An adversary proceeding is a lawsuit filed with the bankruptcy court. 

Debts for Luxury Goods Within 90 Days of Filing Bankruptcy. Under §523 of the Bankruptcy Code, the court may declare a debt non-dischargeable if the debt was incurred under “false pretenses, a false representation, or actual fraud.” The code section does not explain or define these terms. 

One of the common types of transactions that fall within this category is the purchase of luxury goods within 90 days before filing your bankruptcy petition. If you incurred consumer debt to purchase $675 in “luxury” goods or services within the 90 days of filing your bankruptcy petition, the court will presume the debt is non-dischargeable unless you can prove that there was no intended misrepresentation or fraud. The creditor does not need to prove that you did not intend to pay the debt to win the case because of the automatic presumption that you knew you would be filing for bankruptcy relief within three months and would not be required to repay the debt.

Damages Related to Intentional Acts That Cause Another Person Injury or Damages.  Section 523(a)(6) prohibits a debtor from discharging incur debts because of the “willful and malicious injury” to another person. We can call these acts “intentional torts,” including personal injury judgments and settlements. A common example of a debt that is typically not eligible for discharge under this section would be a personal judgment related to a drunk driving accident or a drugged driving accident. Another example would be if the debtor intentionally caused another person injury by assaulting the person physically.

Contact an Orange Park Bankruptcy Attorney for More Information About Debts You Can Discharge in Bankruptcy.  Bankruptcy lawyer Tony Turner assists clients in filing bankruptcy and exploring other debt-relief options. If you want to discuss ways to eliminate your debts, Contact The Law Office of Tony Turner for a free consultation. Call (904) 679-2020 now to speak with an experienced bankruptcy lawyer in Orange Park, Florida.

 

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Top Bankruptcy Questions and Misconceptions!

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Honestly, no one wants to file for bankruptcy. Deciding it’s something you must do is incredibly painful, humbling, and embarrassing. Often the hardest part is committing to retaining a bankruptcy attorney and to the recovery or financial healing process.

From what I have seen, the most common causes of financial hardship are the loss of a job, divorce, death of a spouse, or being sued. Rarely has someone retained me and filed because of medical bills. Doctors almost never sue you to collect, credit cards companies sue often.

Once a debtor realizes and decides they must file bankruptcy, they consult with Mr. Turner. Afterward, they express relief and are confident the decision is the right one. They understand bankruptcy is not “the end,” but rather the beginning. The beginning of financial recovery, reduced stress a fresh financial start for the debtor and their family, a much needed and well deserved second chance.

The financial and emotional healing has begun, the embarrassment dissipates, and they realize the misconceptions and stereotypes perpetuated by the media and the credit card companies are foolish. Bankruptcy is not a “necessary evil” but a God-send to those drowning in debt.

Once the debtor understands that often they have paid the credit card companies more money than they have ever borrowed, the decision is a no-brainer. Keep in mind that Bankruptcy is a right The United States Government has given to you. Take full advantage of any rights the government provides its citizens. Do not let people who do not have to live with the consequences of their decisions and opinions persuade you to pay for the debt you cannot afford or use “debt settlement companies” that rarely work. You have earned the right to a fresh start.

Below are some common questions Clients ask me when considering filing for bankruptcy protection

Will I ever get credit again after I file for bankruptcy?

Of course, you will. The lenders want you back in debt. They know you can’t receive another discharge in bankruptcy for several years. You will receive offers of credit cards often before you’re out of bankruptcy. I receive letters often from car dealerships asking my clients to call them for a new car loan. Getting into debt is easy. Getting out is the hard part.

Should you apply for loans? Maybe. My suggestion is to be very careful. Maybe take out a “secured loan” at their bank. Use your money and not someone else’s. Rebuild your credit wisely. If done right, you can have a good credit score within 24 months.

Will bankruptcy affect my credit score?

For some, not at all. Most debtors were already delinquent on their debt, facing foreclosure, garnishment, lawsuits, and repossession. Bankruptcy improves their financial position and their credit score. Typical your credit score is used to get credit. Creditors rather than debt from the loan was the problem. Don’t get caught up in your credit score. Focus on your liquidity. How much money do you have leftover every month now that the debt is gone? Save that money and increase your net worth.

Will I lose my car, house, retirement, or other assets as a result of filing for bankruptcy protection?

Most of the time NO. The Bankruptcy Code allows you certain exemptions which can get tricky and complicated. You need to consult with an experienced bankruptcy lawyer to determine how to proceed. Often debtors ask with me too late, they have sold assets or liquidated retirement accounts needlessly. They wasted away what money they had left that I could have protected, and they could have kept.

Sometimes clients retain me but do not file bankruptcy for a year or so. Planning and timing can save your house, retirement, and thousands and thousands of dollars. It could be the difference between filing a Chapter 7 and getting a discharge in 80 days while paying nothing and keeping all your assets versus being in Chapter 13 for five years and spending thousands of dollars.

Most bankruptcy attorneys will provide an initial consultation for free. Please take advantage of that and utilize their knowledge.

Will my friends, family, or employer find out about my bankruptcy?

Probably not, unless you owed them money. Although Bankruptcy filings are public records, they are difficult to locate. The average person will not be able to find your petition. Even if they do, so what.

Bankruptcy means you have discharged your debt and are in a better financial position than you were.

Can I file bankruptcy if I am employed, unemployed or retired?

Absolutely! Your employment status will not affect your ability to file for bankruptcy protection. Although, your income may change what Chapter you file, 7 or 13. You can ask for bankruptcy protection whether you’re working or not.

I hope you have found this helpful and if you need an experienced bankruptcy lawyer, I hope you consider retaining The Law Office of Tony Turner.

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Should I File a Chapter 13 Bankruptcy Case or a Chapter 7 Bankruptcy Case?

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As a Bankruptcy Lawyer in St. Augustine and Orange Park Florida, I realize deciding whether to file a Chapter 7 or a Chapter 13 case can be confusing to most clients.

Firstly, you will want to schedule a conference with your bankruptcy lawyer to discuss in great detail your financial situation and the assets you own. Because of which your attorney can easily determine which chapter of bankruptcy will be the best for you. The goal is to discharge your debts in the most affordable and effective manner.

The Law Office of Tony Turner has offices in Orange Park, St. Augustine, Deland, Jacksonville, & Lake City, Florida to meet with clients and provide them with the appropriate legal advice and guidance. Most clients want a “bankruptcy lawyer near me”, hopefully, one of these offices is conveniently located.

Your Bankruptcy Lawyer must be concerned, aware and take into consideration which Chapter of the United States Bankruptcy Code protects your property from the United States Trustee the best. The Trustee is assigned by the Bankruptcy System to oversee and review your bankruptcy petition. The Bankruptcy Trustee is charged with the responsibility of determining if there are any assets to recover and sell. The proceeds will then be used to pay your creditors. An experienced Florida Bankruptcy Lawyer will know which Statutory exemptions to apply to protect your assets. This is a must. A mistake in applying the proper exemption could be devastating to a debtor financially.

A Florida Bankruptcy Lawyer should thoroughly review your financial records including tax returns; bank statements; pay stubs; retirement accounts; automobiles and the loans attached; liens and any other assets whether liquid or not to determine which Chapter of Bankruptcy is right for you or whether you should even file for bankruptcy or can file.

The Law Office of Tony Turner offers free consultations so that you can educate yourself about the Bankruptcy Law, the Exemptions available and advise you what to do and what not to do before you file for bankruptcy. Attorney Turner’s clients learn about the debt relief options available and whether they qualify for bankruptcy without worrying about how to pay attorney fees for the consultation. It’s free.

SO WHAT’S THE DIFFERENCE BETWEEN A CHAPTER 13 & CHAPTER 7?

A Chapter 13 bankruptcy case is a reorganization. You can reorganize your debts into an affordable bankruptcy plan.

A Chapter 7 bankruptcy case is a liquidation bankruptcy. Chapter 7 takes less time and costs less than Chapter 13.

But Chapter 7 is not the best choice for every person. In addition, you must meet income requirements to be eligible for a bankruptcy discharge under Chapter 7. 

Let’s look at each bankruptcy chapter closely to weigh the pros and cons of each debt relief option.

What is Involved in Filing Chapter 13 in Florida?

As discussed above, a Chapter 13 case is a reorganization of your debt through a repayment plan. With a Chapter 13 bankruptcy case, you can get rid of unsecured debts for a small fraction of what you owe. Instead of paying the full balance owed to each unsecured creditor, you pay a percentage of the debt. In some cases, debtors may pay pennies on the dollar, depending on their financial situation.

Some benefits of a Chapter 13 bankruptcy case include:

  1. Allows you to get rid of unsecured debt for a fraction of what is to pay to the creditor.
  2. Can stop foreclosures and repossessions so that you can keep your home and vehicles.
  3. In some cases, a debtor may be able to get rid of a second mortgage for a fraction of what you owe the lender.
  4. You may also be able to lower your car payments by modifying the term of the loan and the interest rate through a Chapter 13 plan.
  5. You have up to 60 months to pay back due taxes in a Chapter 13 case.
  6. If you owe alimony or child support, you can stop a contempt action and pay the past-due support through your Chapter 13 plan. However, you must pay all future support payments on time.
  7. If you have equity in an asset that exceeds the allowed bankruptcy exemptions, you can protect that asset by filing a Chapter 13 case.

Some disadvantages of a Chapter 13 bankruptcy case include:

  1. A typical Chapter 13 plan is a 60-month repayment plan. Therefore, you are in Chapter 13 for over five years.
  2. During your Chapter 13 case, you cannot transfer substantial assets, refinance loans, or incur new debt without court approval.
  3. The percentage you must pay toward unsecured debts is based on several factors, including your income, assets, and certain recent financial transactions.
  4. A Chapter 13 case can help you save your home, car, and other assets. It can also help you get out of debt for less than you owe right now.

Your Florida Bankruptcy attorney also checks to see if you are eligible to file under Chapter 7.

What is Involved in Filing Chapter 7 in Florida?

You may have heard stories about people losing everything they own when they file for debt relief under Chapter 7. This bankruptcy myth is not true. Most debtors do not lose any of their property when they file a Chapter 7 case. Let’s look at the pros and cons of a Chapter 7 bankruptcy case to help you understand the filing procedure under this chapter of bankruptcy.

Some benefits of a Chapter 7 bankruptcy case include:

  • Most Chapter 7 cases can complete within four to six months after the filing of the bankruptcy petition.
  • You are not required to repay any portion of unsecured debts that are eligible for a bankruptcy discharge.
  • Bankruptcy exemptions typically protect all your property, so that you do not lose any property if you file a Chapter 7 bankruptcy case.
  • You can surrender collateral in full satisfaction of a lien without worrying about the lender obtaining a deficiency judgment for any remaining balance owed after the collateral is liquidated.

Some disadvantages of a Chapter 7 bankruptcy case include:

  • You could lose an asset if the bankruptcy exemptions do not cover the equity in the asset and you cannot afford to “buy back” the asset from the Chapter 7 trustee. Again, most Chapter 7 cases filed in Florida do not result in the loss of property to the Chapter 7 trustee.
  • You must remain current on your mortgage and car loan payments to keep the assets. A Chapter 7 bankruptcy case stops foreclosures and repossessions for a short time. You must catch up on the payments and remain current to keep the collateral.
  • Likewise, you do not have 60 months to pay back taxes or unpaid support payments when you file a Chapter 7 case.
  • You must meet strict income requirements to be eligible for a bankruptcy discharge under Chapter 7. If you “fail” the Means Test, you are not eligible for a bankruptcy discharge in Chapter 7.

Before you file a Chapter 7 bankruptcy petition, you need to consult with a Florida bankruptcy attorney. Once you file a Chapter 7 case, you are not entitled to dismiss the bankruptcy case voluntarily without court approval.
You can also find more information about filing for bankruptcy relief on the FAQ section of our website.

Seek Advice From an Experienced Florida Bankruptcy Attorney

If you are struggling with debts that you cannot pay each month, you may benefit from filing for bankruptcy relief. However, filing a bankruptcy case is a complex matter. You should only file a Chapter 7 or Chapter 13 case after consulting with a bankruptcy lawyer. A bankruptcy case gets rid of debt; however, you need to consider all debt relief options before choosing bankruptcy as your path to eliminate debt.
Tony Turner represents clients throughout Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas. If you need an affordable solution to your debt problems, call now for a free case review.
Contact The Law Office of Tony Turner for a free consultation. An experienced Florida Bankruptcy Lawyer is a must. Call (904) 679-2020 or use the online form.

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Older debtors filing is the recent trend in bankruptcy?

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A recent trend is that older debtors are beginning to file bankruptcy with more frequency. The rate is more than double what it was in the early 1990s. The rate of debtors over the age of 65 filings for bankruptcy increased over 200% from 1991 to the present. The cause of this increase is the medical bills as well as the lower incomes they receive and the nationwide decline in pension, retirement pay, and interest rate earned on money saved or the death of a spouse. Many resort to living with their children or doing without necessities to pay their bills.

Medicare does pay some health care costs, but it does not cover extensive care, hearing aids, dental procedures, eye exams, foot care, and some other treatment. Sometimes there are co-pays, coinsurance, and deductibles. The skyrocketing medical costs are just too much. Sometimes Churches, friends, or family will help. However, once they get behind on their bills, the constant calls from bill collectors are just too stressful and they contact a bankruptcy attorney for help.

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Most debtor’s over 60 are reluctant to file for bankruptcy. They have a stronger sense of a moral obligation to pay. Some have parents that grew up during the Great Depression or were part of the “Greatest Generation”. The decision to file for bankruptcy takes place over time.

Most debtors struggle for years in what’s known as the “sweatbox”. Most deplete all their assets when it wasn’t necessary. The assets could have been protected and kept under bankruptcy laws. It’s a very difficult and painful decision, but one that ultimately leaves them in a better financial position for their Golden Years. The over 60-year-old clients are some of the most appreciative clients I have. They are respectful, compliant and will bake you a cake from scratch for your birthday. At least one I’ve represented does.

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Bankruptcy Petition Filing Statistics!

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According to the Bankruptcy Petition filing statistics, consumers filing for bankruptcy in 2017 reported total assets of $80 billion and total debt of $105 billion, according to an annual report filed by the Judiciary with Congress. The report, required by Congress under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  Some notable highlights in the report are:

  1. Sixty-two percent of assets were real property, and the remaining assets were personal property.
  3. Debtors in the Northern District of California and in the Southern District of Florida reported the highest average assets per petition, at $583,000 and $338,000, respectively. Filers in the Western District of Tennessee reported the lowest average assets, $44,000.
  5. The median average income reported by debtors was $2,741 a month, and the median average monthly expenses were $2,645. 
  7. A total of 742,323 consumer bankruptcy petitions were filed in 2017, 1 percent fewer than in 2016.
  9. About 61 percent of the bankruptcy petitions were filed under Chapter 7 of the Bankruptcy Code, in which a debtor’s assets are liquidated and proceeds are distributed to creditors, except for exempt assets.
  11. About 38 percent were filed under Chapter 13 of the Bankruptcy Code, in which debtors make installment payments to a Trustee who distributes it to creditors under court-approved plan.
  13. Debtors were able to successfully pay their debts in 48 percent of the Chapter 13 cases closed in 2017 – slightly less than the 52 percent reported in 2016.

Less than 1 percent of petitions by individuals with consumer debts were filed under Chapter 11, which allows businesses and individuals to continue operating while they make plans to reorganize and repay creditors.

The data for the report is provided by the debtors either at the time they file bankruptcy petitions or within two weeks of filing, which is required by federal bankruptcy rules.

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What are some of the federal consumer protection laws?

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What are some of the Federal Consumer protection laws?

At The Law Office of Tony Turner, attorney Tony Turner is often asked, “What are some of the Federal Consumer protection laws?”

  • The Credit Repair Organizations Act– The Credit Repair Organizations Act is an act that mandates credit repair organizations give you a copy of your rights as a consumer before you sign a contract. The credit repair organization must also give you a written contract that details your rights and responsibilities,  and are not obligated to pay them until they have fulfilled their obligations. 
  • The Fair Credit Reporting Act (FCRA)– FCRA promotes the accuracy, fairness, and privacy of information maintained and reported by credit agencies.
  • The Equal Credit Opportunity Act (ECOA)– The ECOA prohibits creditors from discriminating against applicants based on sex, race, color, marital status, religion, national origin, age, receipt of public assistance, or prior exercise of any rights under the Consumer Credit Protection Act.
  • The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA)– Established procedures for resolving mistakes on credit billing and electronic fund transfer account statements such as credit and debit cards.
  • The Fair Debt Collection Practices Act (FDCPA) – FDCPA prohibits debt collectors from using unfair, deceptive, or abusive practices to collect
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Student Loans in Bankruptcy. – Pending Legislation 2021

HELPING HAND IN SUIT, STUDENT LOANS, DEBT RELIEF, CONGRESS

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A bill that’s being proposed to help discharge student loans in bankruptcy.

To amend title 11, United States Code, to improve the treatment of student loans in bankruptcy

SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Fostering Responsible Education Starts with Helping Students Through Accountability, Relief, and Taxpayer Protection Through Bankruptcy Act of 2021’’ or the ‘‘FRESH START Through Bankruptcy Act’’.

 Section 2. EXCEPTIONS TO DISCHARGE. Section 523(a) of title 11, United States code, is amended by striking paragraph (8) and inserting the following: ‘‘(8) for an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship, or stipend received from a governmental unit or nonprofit institution, unless ‘‘(A) excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents; or ‘‘(B) the first payment on such debt became due before the 10-year period (exclusive of any applicable suspension of the repayment period) ending on the date of the filing of the petition; ‘‘(8A) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, Section 523(a) of title 11, United States code, is amended by striking paragraph (8) and inserting the following: ‘‘(8) for an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship, or stipend received from a governmental unit or nonprofit institution, unless ‘‘(A) excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents; or ‘‘(B) the first payment on such debt became due before the 10-year period (exclusive of any applicable suspension of the repayment period) ending on the date of the filing of the petition; ‘‘(8A) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for ‘‘(A) an obligation to repay funds received as an educational benefit, scholarship, or stipend, other than an obligation described in paragraph (8); or ‘‘(B) any educational loan, other than a loan described in paragraph (8), that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;’’.

SEC. 3. EFFECT OF DISCHARGE OF CERTAIN STUDENT

LOANS. Section 524 of title 11, United States Code, is amended by adding at the end the following: ‘‘(n)(1) In this subsection: ‘‘(A) The term ‘cohort repayment rate’, with respect to a covered institution of higher education, means the percentage of student borrowers who are making at least some progress paying down their student loans within 3 years of entering repayment. ‘‘(B) The term ‘covered institution of higher education’ means an institution of higher education (as defined in section 102 of the Higher Education Act Act of 1965 (20 U.SC. 1002)) that ‘‘(i) is a participant in the Federal Direct Loan Program under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.); and ‘‘(ii) has an enrollment of students that is not less than 33 percent students who have received a loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.)). ‘‘(C) The term ‘covered student loan’ means the original principal of a loan—‘‘(i) the first payment on which became due before the 10-year period (exclusive of any applicable suspension of the repayment period) ending on the date of the filing of the petition; and ‘‘(ii) used by the debtor to make a payment to a covered institution of higher education on behalf of the debtor for the purpose of attaining an educational benefit. ‘‘(D) The term ‘Federal Direct PLUS Loan’ means a Federal Direct PLUS Loan under part  of title IV of the Higher Education Act of 1965 (2024 U. U.S.C. 1087a et seq.) ‘‘(2) If a covered student loan is discharged in a bankruptcy case under this title, the covered institution of higher education to which the debtor of the bankruptcy case made a payment with the covered student loan shall pay to the Department of Education an amount determined in accordance with the following: ‘‘(A) An amount equal to 50 percent of the amount of the covered student loan that is discharged, if the covered institution of higher education, on the date on which the first payment on the covered student loan became due— ‘‘(i) had a cohort default rate (as determined under section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 1085(m)) for each of the 3 fiscal years preceding that date that was equal to or more than 25 percent; and ‘‘(ii) had a cohort repayment rate— ‘‘(I) except for borrowers described in subclause (II), that was equal to or less than 20 percent; and ‘‘(II) with respect to borrowers who were graduate or professional students who received a Federal Direct PLUS Loan for enrollment at the institution, that was equal to or less than 35 percent. ‘(B) An amount equal to 30 percent of the amount of the covered student loan that is discharged, if the covered institution of higher education, on the date on which the first payment on the covered student loan became due— ‘(i) had a cohort default rate (as determined under section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 1085(m)) for each of the 3 fiscal years preceding that date that was equal to or more than 20 percent and less than 25 percent; and ‘‘(ii) had a cohort repayment rate— ‘‘(I) except for borrowers described in subclause (II), that was equal to or less than 25 percent and more than 20 percent; and‘‘(II) with respect to borrowers who were graduate or professional students who received a Federal Direct PLUS Loan for enrollment at the institution, that was equal to or less than 40 percent and more than 35 percent. ‘‘(C) An amount equal to 20 percent of the amount of the covered student loan that is discharged, if the covered institution of higher education, on the date on which the first payment on the covered student loan became due— ‘‘(i) had a cohort default rate (as determined under section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 1085(m)) for each of the 3 fiscal years preceding that date that was equal to or more than 15 percent and 8 less than 20 percent; and ‘‘(ii) had a cohort repayment rate (I) except for borrowers described in subclause (II), that was equal to or less than 30 percent and more than 25 percent; 13 and ‘‘(II) with respect to borrowers who were graduate or professional students who received a Federal Direct PLUS Loan for enrollment at the institution, that was equal to or less than 45 percent and more than 40 percent.’’.

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