New bill urges discharge of private student loan debt

Generally, the bankruptcy code outlines which debts can be discharged, however, courts do have some authority in the event of severe hardship. In Chapter 7 and Chapter 13 bankruptcy, most unsecured debts, including credit card and medical debt can be discharged or reorganized, while secured debts, including student loans, taxes, and judgments must be paid in full. A new bill is calling on legislators to pass new regulations that would also allow the discharge of private student loans in bankruptcy. Many students in New York and nationwide are burdened by high rates of unemployment and a challenging job market as well as extremely high student loan debt with accumulating interest. In the current economy, many young people are indebted to private lenders and unable to recover, even after filing bankruptcy. While many federal loans have fixed interest rates and the ability to defer payments, many students who take on private student loan debt have no relief in the event of hardship. A recent survey found that many students who took out private loans didn’t know the difference between private and government loan debt. In the proposed new bill, colleges and universities would be required to inform students about federal aid options, including… Continue reading

Big jump in foreclosure filings for the New York area

Among the country’s 20 largest metropolitan areas, the New York area saw the biggest increase in foreclosure filings during the third quarter of this year. According to data provider RealtyTrac Inc., the region saw a 69 percent increase in default, repossession and auction filings, counter to the national trend. While more than three-fifths of U.S. metropolitan areas saw filings decrease from the same period last year, New York filings increased as lenders began working through a backlog of pending foreclosures. New York has the nation’s longest foreclosure process. Filing for Chapter 13 bankruptcy may be an option for New York area homeowners who are facing foreclosure. Chapter 13 bankruptcy, also called a wage-earner’s plan, allows individuals who have a regular source of income to develop a debt repayment plan to pay creditors in installments over three to five years. The length of the plan depends in part on the debtor’s current monthly income. Individuals who file for Chapter 13 bankruptcy may also be able to stop foreclosure actions and cure delinquent payments over time as long as they make timely mortgage payments during the Chapter 13 repayment plan period. If you are facing foreclosure of your home, it would be… Continue reading

Housing recovery likely delayed due to Sandy

The housing market may take even longer than expected to recover in the wake of Hurricane Sandy. While foreclosure filings across the United States were down 19 percent in October from the same period last year, October saw an increase from September in both foreclosure starts and overall foreclosure filings, according to data from RealtyTrac, a market research company. New York, New Jersey and Connecticut saw the biggest increases in foreclosure filings for the month of October. The New York area already has one of longest foreclosure processes in the nation, with foreclosures taking longer on average to complete than other areas of the nation. This likely will get worse as a result of moratoriums on foreclosures that have been put into place following Hurricane Sandy. One option for New York-area homeowners who face long foreclosure processes may be filing for Chapter 13 bankruptcy. Chapter 13 bankruptcy allows homeowners avoid foreclosure on their homes and obtain a fresh financial start. Under Chapter 13, the homeowner establishes a court-supervised repayment plan that provides for monthly payments to creditors over a period of three to five years, depending on the homeowner’s monthly income. The Chapter 13 repayment plan allows the homeowner to… Continue reading

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