On March 27, 2020, the president signed the CARES Act into law, which among other things, provides broad temporary relief for federal student loan borrowers. For more than 40 million student loan borrowers carrying almost $1.4 trillion of debt, the CARES Act offers 6-months to consider IF a bankruptcy can help you regain control of your debts, and through claiming Florida exemptions, retain your assets. Please contact our office if we can assist you in your decision of whether a bankruptcy petition makes sense for you. We are open for business and able to schedule an initial free consultation with you to discuss your financial situation. A bankruptcy filing may help you stop the madness and get your financial life in order.
Federal student loan borrowers are automatically being placed in administrative forbearance, by the U.S Department of Education, office of Federal Student Aid. This 6-month suspension of principal payments lasts from March 2020 until September 30, 2020.
Federal student loans owned by the U.S. Department of Education, from March 13, 202 through September 30, 202, will have a 0% interest rate. Direct Stafford loans, FEEL Program loans, Federal Perkins loans and/or HEAL loans are eligible for this interest break. So, after all the interest that accrued prior to March 13th is paid, any additional voluntary payments will be fully applied only to principal. Sorry folks, Sallie Mae is still going to expect monthly payments.
Currently student loan collections are on pause. The government cannot garnish money out of your paycheck, tax return refund or Social Security retirement check. During this forbearance period the Department of Education will report any suspended payments to credit bureaus as if they were made on time.
The importance of the forgoing is the opportunity the CARES Act offers to regroup financially and hopefully direct your income in a manner that avoids payment defaults on your secured assets (i.e., personal residence and vehicles). An unplanned shortage of income can put student borrowers under significant stress. If some or all your recurring monthly income unexpectedly stops because of the covid-19 pandemic, it may be time to call a bankruptcy attorney.
Do you know that the CARES Act allows the first $5,250 that your employer contributes to your student debt repayment to be tax-free to you in 2020? You should discuss this with your employer.
We are here to answer your bankruptcy questions. Take full advantage of the new CARES Act student loan laws. With careful cash management although your income may be reduced, it may be possible to avoid default on both your student loans and your personal residential mortgage and/or vehicle loan(s).
Call 386-271-4740 during our normal business hours Monday through Friday (9:00 am to 5:00 pm) and set up a free consultation. You can stop the madness.