Student loans made before 1998 were given new life by Congress when it eliminated the seven year discharge rule in 1998. The United States Court of Appeals for the 9th Circuit recently affirmed the right of Congress to modify discharge rules after the loan was taken out.
Prior to the change in 1998, a student [...]

Popularity: 45% [?]

My recent post on the Mortgage Forgiveness Debt Relief Tax Act of 2007  entitled Home Loan Foreclosure No Longer a Tax Trap appears in Don’t Mess With Taxes.  That website, created by professional journalist and self-proclaimed tax geek, Kay Bell, is a collection of useful links, tips and stories about tax issues.  It is called, in internet speak, a carnival.  This is [...]

Popularity: 24% [?]

Are nondischargeable student loan debts akin to involuntary servitude? When interest and penalties on a large debt eat up so much income that a debtor is unable to support a family or sustain more than a subsistence existence they are.  When the creditor “owns” all the fruits of the labor, for the debtor’s [...]

Popularity: 34% [?]

You have lost your home to foreclosure. Surprise, here is the bill for the income tax you now owe. Maybe not, if you are one of the former homeowners saved from grief by new federal legislation. On December 20, 2007, the Mortgage Forgiveness Debt Relief Act of 2007 became law. This new law will protect [...]

Popularity: 40% [?]

Proposed new bankruptcy legislation designed to help troubled homeowners will benefit consumers without hurting the industry.  It would allow consumers with bad home loans to get help from the bankruptcy court.  Lobbyists for big banks argue that granting bankruptcy courts the ability to modify home mortgage terms will increase interest rates.  Adam Levitin, a Georgetown law professor, [...]

Popularity: 14% [?]

A recent New York Times Article Charity’s share from shopping raises concerns calls it “a marketing gimmick run amok” and warns that the potential for scamming is huge. The practice of embedded giving , of building a donation to charity into the purchase price of a particular item or items from a certain retailer, [...]

Popularity: 22% [?]

If the sub-prime mortgage crisis hasn’t broken the back of the middle class consumer, the student loan collection industry will soon be taking a swing at it. The future is not looking good for the American middle class.
The 2005 legislative changes made Bankruptcy more difficult and more expensive for the consumer debtor.  Creditors are now [...]

Popularity: 34% [?]

A major irritation for debtor attorneys in Chapter 13 cases is the filing of a motion to lift the automatic stay by a home loan creditor when debtor has made all payments required under the plan. I have had Chapter 13 cases where as many as three unwarranted motions were filed by the loan servicer [...]

Popularity: 29% [?]

After her earned income credit was seized to pay her student loans, a mentally and physically disabled mother of two became disheartened and stopped applying for it.  The US Bankruptcy Court in the Northern District of Ohio, Western Division, ruled that her failure to apply for the earned income credit constituted bad faith, and used this as [...]

Popularity: 33% [?]

In a recent BusinessWeek article entitled “Prisoners of Debt”, the author discussed companies buying and selling debt that has already been discharged in bankruptcy. When the debt is revived by unlawful credit reporting or collection action it is often referred to as zombie debt. It seems that such debt can be purchased inexpensively [...]

Popularity: 57% [?]