Giles & Lambert PC has achieved forgiveness or discharge for a total of $743,081 in student loans for their clients in the past year and we expect to discharge or achieve forgiveness for more than $1,000,000 in student loans soon!
From the new streamlined Hardship Discharge for some clients in Chapter 7 or Chapter 13, to the current Income Based Repayment Recount (IBR) program to the new SAVE program, there are more options than ever for helping student loan borrowers.
Here is a summary of some of current options:
For clients in Chapter 7 or 13, the November 2022 position on discharging certain student loans and streamlining the process has benefitted Chapter 7 and 13 debtors by discharging federally held student loans using a more affordable legal remedy.
In the past it was nearly impossible to discharge student loans, but now circumstances have changed and many loans can be discharged through a separate lawsuit or adversary proceeding. The US Department of Education announced this position change in late 2022 and we have already used it to discharge student loans ranging from $10,000 to $200,000 per individual.
The change does only applies to federal loans (not private loans) and the qualified debtors will have loans that are usually a) more than 10 years old, OR b) for a degree which they were unable to complete, OR c) for a school that closed, OR d) have other extenuating factors that demonstrate why the loan should be discharged at this time.
The Department of Education is currently conducting a recount to fix past issues for income based repayment plans. The recount will credit months borrowers spent in repayment or in a pause and will help folks on Public Service Loan Forgiveness Programs. But for some time is short: Consumers with older student loans may need to consolidate to achieve the benefit of the IDR recount and that must be done by April 30, 2024. See: https://studentaid.gov/announcements-events/idr-account-adjustment
If the borrower has an older FFEL loans, he or she must consolidate via a Direct Loan Consolidation by April 30, 2024. Some borrowers with multiple Direct Loans may also benefit from consolidation as the recount will credit the oldest original loan length to the total consolidation for the purpose of the recount. But again, April 30, 2024 is the deadline to consolidate.
This is the newest Income Based Repayment Plan. For many lower income borrowers, this is the lowest possible payment and offers other great new benefits.
The SAVE Plan scales down the time for forgiveness based on the original loan and in July 2024 the minimum monthly payment will be cut in half.
One of the biggest benefits with SAVE is that the loan will not grow due to unpaid interest. Basically the government will cover that portion. THIS IS A HUGE CHANGE FOR MANY FOLKS!
SAVE is not for everyone and you should carefully review all options to see which plan is best for you. Some higher income folks, may be better off with other options. And, the option to move between plans can be limited after July 1, 2024, so research the best option for you now. See: https://studentaid.gov/articles/6-things-to-know-about-save
You can also use the loan simulator to check which option may be best for you: See https://studentaid.gov/loan-simulator
Malissa Giles is one of the first attorneys nationwide to aggressively implement the new bankruptcy discharge option and was even interviewed by the New York Times for her work in this area. Read the article here: https://www.nytimes.com/2023/08/09/your-money/student-loan-bankruptcy-discharge.html. She has spoken regionally, statewide and nationally on panels for other attorneys on how to use the new approach to help clients.
If resuming your student loan payments will make life tough financially, contact Giles & Lambert PC for your free consultation to determine if we can help you discharge the student loans and live a more stress free life.
Giles & Lambert PC has achieved forgiveness or discharge for a total of $743,081 in student loans for their clients in the past year and we expect to discharge or achieve forgiveness for more than $1,000,000 in student loans soon!
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