Jul 15, 2019 | Student Loan Debt
Federal Student Loan Forgiveness Program: Public Service
What is it?
How do I get it?
The Straight Talk!
There is nothing worse that than to hear stories from clients who thought they did everything right, only to find out, ten (10) years later, that their forgiveness application was denied and their participation in the program was wholly unsuccessful. We do not want this to happen to our clients.
What you Need to Know Public Service Education Debt Forgiveness
Public Service Loan Forgiveness is a Federal Student Loan Forgiveness Program that only applies to those who have Federal Student Loans and work, full time, for a Governmental Entity or a Qualified Non-Profit. How it works is pretty straight forward. You work in the public or non-profit sector for 10 years, make payments for 10 years, and if the balance is not paid off in 10 years, the balance is forgiven. Seems straightforward. But it is not.
So let’s break it down to it’s essential terms.
First, you much have a qualified Federal Student Loan. Not all Federal Student Loans qualify for this program. If you have a student loan under the old student loan lending system, FFEL, they those loans do not qualify. The loans must be under the Direct Student Loan System.
The vast majority of borrowers who thought they had the correct type of loans were denied forgiveness because they had the wrong type of loan, were given the wrong information, and paid on their loans for 10 years, only to find out that their loans were not eligible.
Employment Requirements
The student loan borrowed must have worked full time for a qualified employer for the full ten years. The 10 years has to be cumulative, and not necessarily consecutive or with one qualified employer. Teachers can go from one school district to another, as an example.
Qualified Loans
The first step in this process is to have your Federal Student Loans reviewed by a Student Loan Lawyer to ensure that the loans are eligible student loans for Public Service Loan Forgiveness. The last thing you want to have happened is to pay on loans, and not have them be qualified. Our attorneys suggest obtaining your National Student Loan Data System report and have it reviewed by our office. This is the number one reason that countless public servants have had their forgiveness applications denied. DO NOT LET THIS HAPPEN TO YOU.
Ineligible Loans
If a borrower has non-qualified student loans, FFEL, then they can be consolidated into the Direct Student Loan System. We can assist with this process. Once that is accomplished, then they become qualified loans and the ten year payment cycle begins to run. There is no credit given for payments made on non-qualified loans.
Qualified Payments
The student loan borrower has to make the qualified payments, on the qualified loans, while working full time for a qualified employer, in full, and on time. What this means is that a payment plan under the Direct Student Loan Program has to be established and complied with for 10 years, 120 consecutive, qualified payments, in full and on time. If payments are suspended for any reason, then the 120 months worth of payments is suspended. For an example, if the borrower requested a deferment or forbearance.
Repayment Plans
If the Federal student loans can be paid off within 10 years, then there is no reason for a borrower to participate in this program. However, if the balance cannot be paid off in 10 years, then the Public Service Loan Forgiveness Program will be a benefit to the borrower because the balance will be forgiven.
That being said, the borrower must enroll in an Income Drive Repayment Plan under the Direct Student Loan Program. These repayment plans are based on household size and household income, rather than the balance of the loans. These then become your qualified payments.
Income-Driven Repayment Plans
To enroll in an income-driven repayment plan, an application must be filled out and submitted to the student loan servicer. The two most important steps to ensure the forgiveness program works is that payments are made in full and on time, each month, and, the yearly recertification of the Income Driven Repayment Plan is completed. If the borrower fails to recertify, then the whole program is terminated.
Fed Loan Servicing
FedLoan is the proper service for the whole Public Service Loan Forgiveness program. We ensure that each of our clients who wish to apply for PSLF moves all their loans to FedLoan in order to obtain the proper credit for each payment.
Department of Education
FedLoan Servicing, P.O Box 790234, St. Louis, MO 63179-0234 (effective 7/1/19)
Yearly Employment Certification
Our attorneys encourage all our clients to certify their employment with FedLoan, each year. This is accomplished with submission of the application, signed off by the employer, and sent into FedLoan. Keeping a copy of each application as well as each year’s W-2 is an excellent way to ensure completion. When we do this for our clients, we establish a paper trail, and send everything registered mail, return receipt requested, retain a copy for our file and send one to the client.
Links:
NPR Article Teacher lawsuit over loan forgiveness issues
US Department of Education Loan forgiveness mistakes
Student Loan Forgiveness Application Forms
Below are the links where you can download and complete the required PDF forms. Call our office with any questions.
Public Service Loan Forgiveness Form
Income-Driven Repayment Plan Request Form
Direct Consolidation Loan Application -William D. Ford Federal Direct Loan Program
Attorney D.J. Rausa
Jul 11, 2019 | Bankruptcy
Things You Get to Keep in Bankruptcy
When Attorney DJ Rausa interviews clients, one question that is always asked is “What can I keep?” There is this fear in bankruptcy that you will lose everything and that is simply not the case.
Everyone who files bankruptcy can keep their property so long as the value of the property falls within the limits of the Tennessee State Exemptions. This means that certain property is excluded from attachment by the creditors and the Bankruptcy Trustee.
The Tennessee Exemption limitations are very specifically spelled out in the law and as a bankruptcy attorney, I want to make sure that you get to keep all the things you want. For an example, if you want to keep your car, and your car is paid off, then we really have to look at the fair market value of the car. If, however, the vehicle is not paid off, and the value is less than what is owed, you can keep the vehicle so long as you make the payments. If there is actual equity in the vehicle, then a detailed analysis has to be done, to include, establishing a dependable fair market value of the vehicle you wish to retain.
Homestead Exemptions
A Homestead Exemption applies to the equity you have in a parcel of real property that you live in, such as your home or your farm.
Again, there are limitations associated with the net equity you can claim as exempt in a parcel of real property. If the net equity of in the land exceeds the Homestead Exemption Limits, then a Chapter 7 Bankruptcy would not be a good option because the property would be at risk to be sold by the Chapter 7 Trustee. It does not mean Bankruptcy is not an option because a Chapter 13 Bankruptcy would be more appropriate in those circumstances.
There are also limitations to the amount of money that can be kept in a bank account, the amount of jewelry, and all other personal property.
How the Process Works
During the bankruptcy process, Attorney D.J. Rausa will review all assets as well as all liabilities to ensure that the client keeps all wanted property and that all the property falls within the limitation of the Exemptions.
Presently, the Exemption Limits on all personal and real property in the State of Tennessee are set low. Meaning that there is not a lot of protection. For an example, the limitation on a home that is owned by an unmarried person, under the age of 62 is only $5,000.00. In today’s real estate market, that value is typically exceeded. A chapter 13 bankruptcy would be the only viable option.
Changes in the Federal Bankruptcy Law
The Exemption Limits are in the process of being reviewed by both the State House and the State Senate. Two bills were introduced last year, SB 0399 and House Bill 0236. Both have been sent to the Judiciary Committee and are scheduled to be heard the first quarter of 2020.
We will keep you updated on any developments.
Attorney D.J. Rausa
Jul 3, 2019 | Student Loan Debt
July 2, 2019
Our Veterans who have a service-connected disability can apply for a total Federal Student Loan Forgiveness (TPD) based on their Disability Rating from the Veterans Administration. The disability rating from the VA has to be 100% service connected if the VA certification is used. The Application process is straight forward and the VA can issue a document indicating the VA Disability rating upon request.
What some military Veterans do not know is that loan forgiveness of their Federal Student Loans can still be obtained even if their VA disability rating is less than 100%. It is a slightly different process.
Here is how it works. Any Medical Doctor can certify that a Veteran is unable to work based on their medical condition and that the medical condition will prevail for the next 5 years or can be expected to result in death, and it will prevent them from obtaining substantial gainful employment. For an example, any Veteran who suffers from Post Traumatic Stress Disorder which has cause a VA Disability rating of 80%, can still obtain a Total and Permanent Disability Discharge of their Federal Student Loans. (TPD)
The Department of Veteran’s Affairs and the U.S. Department of Education are now working together to enable our Veterans more access to TPD process by cross referencing the data bases, much like they have done with the Social Security Disability system.
Attorney D.J. Rausa is a Veteran who served in the United States Navy. He has assisted dozens of military Veterans obtain their TPD. Sometimes the application is denied with no explanation and the Veteran is in need of the assistance of a Student Loan Lawyer. The Veteran has the right to have someone act on their behalf.
Military Loan Forgiveness Application Forms
Veterans with a service-connected disability may apply for student loan forgiveness at the link below. Forms are available in English and Spanish.
OMB No. 1845-0065 forms are available here.
Student Loan Forgiveness Veteran Disability Discharge Forms
An application has to be filled out and sent to the U.S. Department of Education, TPD Servicing, and Nelnet.
There is also a Third-Party Designation Form to be completed.
You may also apply by phone or ask questions by calling 888-303-7818.
Tax Consequences Under New Tax Law
As a result of a change in tax law, loan balances that are discharged due to TPD are not considered income for federal tax purposes if you receive the discharge during the period from January 1, 2018 through December 31, 2025.
If you are a Veteran or know of a Veteran who needs to exercise their right to take advantage of this benefit, then please share this information with them.
We here at Marshall & Associates are always available to assist our Veteran Community.
Additional details may be found in this Forbes Article on military veteran education loan forgiveness.
Jul 3, 2019 | Driving Laws
Tennessee At-Fault State: Auto Insurance
I was involved in an automobile accident. What are my options?
It is important to know Tennessee auto accident laws when involved in a collision. Tennessee is considered a fault state for car insurance purposes. Most states in the United States fall into this category. A fault state basically means that the driver at-fault is responsible for funding the damage resulting from the accident including medical bills, vehicle, and other property damage that may have occurred. A fault system focuses on determining who caused the collision. In a fault state, like Tennessee, people injured in car accidents usually have several insurance filing options.
Insurance Filing Options After Auto Accident
Following an auto accident, there are several ways to proceed with a claim for damages and/or injuries. Which course of action to take depends on your individual circumstances such as who was at fault, whether you have active insurance, and whether you wish to file a claim at all.
Ways to File a Claim
- File a claim with your own insurance carrier. Your insurance company will then typically turn around and seek reimbursement from the at-fault driver’s insurance company, if applicable.
- File a claim directly with the at-fault driver’s car insurance company, and/or
- File a personal injury lawsuit in civil court, seeking compensation from the at-fault driver.
An injured Tennessee driver, passenger, or pedestrian might decide to try all of these options, or only certain ones, depending on the specifics of the case.
Auto Accident Checklist
When you are involved in an accident, it is difficult to remember all the steps to take to ensure you have a proper record and documentation for insurance and claim purposes. You may want to print this list and place it into your glove compartment. Remember the statute of limitations in Tennessee for taking legal action or having legal action taken against you is 365 days from the date of the accident. Some exceptions apply.
- Seek medical attention if you or anyone involved is hurt. Calling 911 is the best way to reach help at the scene of an accident.
- Write down the name and address of any witnesses at the scene of the accident. Note: Police officers and other first responders do not always record this information.
- Notify the police and complete a report. Make sure the police officer provides you with a report number. It usually requires five business days for the reports to be filed and available for review. Make note of the officer’s uniform color to help you identify the station. Knowing the uniform color can help you determine which law enforcement agency arrived at the scene. Was it the Metro Nashville Police Department, the county sheriff or Tennessee State Troopers?
- Write a letter to the police department to request the report. Make a copy of the letter.
- Observe the scene of the accident and look for physical evidence of the accident such as tire marks, gouges in the pavement and take note any road signs. Take pictures to prove your observations.
- Contact your Primary Care Physician and make an appointment if you have suffered injuries and continue to get medical care per the advice of your doctor.
- Call the Marshall & Associates law office at (615) 885-4335 to ask questions or seek help on an accident case. We can help provide you with options and direction with regard to your case.
Cell Phone Driving Laws Tennessee
