… a job it may not pay enough to cover their everyday living expenses plus the cost of the student loan. Just in the past three years, student loan default rates climbed from 5.8 percent to 7.1 percent to 9.3 percent.  That’s nearly 10% of all Texas student loans falling into default.  But most of these former students don’t need to default because they have options.  Although student loans generally cannot be discharged in bankruptcy, other debt such as credit card debt can be …

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A Loan Modification is a permanent change in one or more of the terms of a homeowner’s loan. It allows the loan to be reinstated, and results in a payment the homeowner can afford.

The homeowner must reach an agreement with the lender to modify the loan. Generally the lender will be a little reluctant to agree for a loan modification as modification typically results in less interest.

The …

Tags: loan modification

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… bankruptcy and keep their home?  The short answer is no.  A debtor can discharge the home equity loan in Chapter 7 bankruptcy but they cannot discharge it AND keep their home.  However, if a debtor would like to keep their home, they may be able to file Chapter 13 bankruptcy and repay both their HELOC and their mortgage over a 3 to 5 year period. If, after completing your Chapter 13 bankruptcy repayment plan, there is a balance on your HELOC loan that may be discharged, effectively …

Tags: Bankruptcy Chapter 7 Bankruptcy HELOC Home Equity Loan

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… of the worse pieces of advice given to debtors considering bankruptcy is to get a home equity loan.  That could be a big mistake.  Here a few reasons why getting a home equity loan to avoid bankruptcy might not be the right move for you:

Typically, you can’t use debt to get out of debt. Anyone who has filed bankruptcy can attest to that truth.  For most debtors considering bankruptcy, their financial troubles are caused by two problems, 1) lack of income and 2) too …

Tags: Bankruptcy Debt Home Equity Loan loans

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… House of Representatives approved legislation last week that would cut major banks and student loan giant Sallie Mae out of a large slice of the $92 billion university student loan business if passed by the Senate.  Under the bill H.R. 3221 –the Student Aid and Fiscal Responsibility Act of 2009, all new student loans would originate with the Direct Student Loan Program as of July 1, 2010. Many big banks and their supporters are lobbying hard to crush the legislation in the Senate so …

Tags: Business Education Loan Sallie Mae Student loan United States House of Representatives

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… According to the Center for Responsible Lending, the proposed legislation allowing mortgage loan modification in bankruptcy could help 600,000 families avoid foreclosure.

Under the proposed plan allowing mortgage loans modification in bankruptcy, only homeowners with an existing mortgage would be eligible for mortgage loan modification in bankruptcy. Also, the homeowner would have to prove to the bankruptcy court that he/she attempted to modify the mortgage loan with the mortgage …

Comment by jede ferrani: … your home loan. Thanks for sharing. Many people …

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Because so many banks are facing massive losses from loan defaults many are desperate to quickly dump delinquent debtors into the foreclosure process. According to an article published in the San Francisco Chronicler some banks are less willing to re-negotiate the terms of loans that are in default or delinquent.

The San Francisco Chronicler says: "As Wachovia Corp. struggles under a souring portfolio of loans inherited from an Oakland …

Tags: Foreclosures loan defaults Wachovia

… feet.”  While in theory it seems to be possible to avoid bankruptcy by taking out a personal loan and using that to survive until you can get another job or more income, it rarely works out that way.  Here are three things you need to consider before you take out the personal loan in the hopes of avoiding bankruptcy:

Are you being rushed into taking out a personal loan by someone else?  Is your spouse, relatives or even your creditors suggesting that you should take out a …

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… Ways To Discharge My Student Loans Besides Bankruptcy? ”, a debtor who cannot discharge their loan in bankruptcy can receive a discharge if they are permanently disabled, dead (and in the case of PLUS loans, the parents will receive the discharge) or a veteran who has been permanently disabled in the line of duty.  Let’s take a look at some other ways to discharge your student loan.

You may receive a discharge of you student loans if your student loan was falsely certified. Student …

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As we have previously mentioned, discharging a student loan in bankruptcy can be difficult to say the least.  In order to receive a bankruptcy discharge for your student loans, you must be able to prove that repaying the loan would cause an undue hardship.  Unfortunately, “undue hardship” has not been specifically defined. This lack of a clear definition has created a situation where two debtors with similar circumstances will experience a …

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Over 21 percent of student loan borrowers who attended a for-profit college default on their student loans within 3 years, according to a report released by the U.S. Department of Education.  For-profit colleges claim that the high numbers of low-income students attending their institutions are inflating their default rates.  So does being a low-income student increase your chances of defaulting on your student loans? …

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Last year we highlighted a Chapter 13 bankruptcy case where student loan debt was partially discharged. The bankruptcy discharge was challenged by the creditor and has made its way to the Supreme Court.  Here is an overview of the decision made by lower courts last year:

In the case of ( Espinosa v. United Student Aid Funds Inc., No. 06-16421, 9th Cir. 10/02/08) the court stated:

“Our long-standing circuit law holds that student loan debts can be …

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