CALL FOR A FREE CONSULTATION
Exceptional Legal Representation Throughout
Long Island and New York, Since 1993.
CALL FOR A FREE CONSULTATION
Exceptional Legal Representation Throughout
Long Island and New York, Since 1993.
Student Loan Lawyers Negotiating and Resolving Student Loan Debt
Benjamin Franklin once famously stated, “In this world, nothing can be said to be certain, except death and taxes.” In recent times, public opinion has expanded this phrase to include student loans. With most jobs now requiring a bachelor’s degree, the total student loan debt in the U.S. has soared to over $1.64 trillion in federal loans and $124.65 billion in private loans. The average American student loan debt stands at $35,397. If you are carrying student loans, know that you are not alone—and by reading this summary, you are already taking steps to explore ways to reduce your repayment burden.
Student loans fall into two main categories: federal student loans and private student loans.
Due to federal regulations, federal student loans generally offer more flexible and affordable repayment plans. In contrast, private loans tend to have stricter terms and fewer options for long-term repayment relief.
To discover more about the various strategies available to help manage your student loan debt, continue reading our Student Loans Summary.
As of now, federal loans have been deferred, with no payments due until after 09/30/20. If you are currently enrolled in a repayment plan, you may not be required to make payments. However, it is important to confirm this with your lender before deciding to forgo your student loan payments.
We have and will continue to assist students in default by modifying, rehabilitating, or consolidating federal student loans.
Our office can collaborate with your lender to establish a manageable monthly payment based on either your income alone or both your income and expenses. If this is your first time applying for a better repayment plan and you haven’t missed payments on a prior plan, you may qualify for an Income-Based Repayment Plan (IBR).
Under an IBR plan, your monthly payments adjust based on your gross annual income from the previous year.
This repayment plan is a great option for federal student loans, as the remaining balance is forgiven after 240 payments (20 years). If you have no income, your required monthly payment could be as low as $0.
Our office enrolls students in IBR plans and ensures their continuation for a periodic legal fee. Since defaulting on an IBR plan permanently forfeits its benefits, maintaining the plan is a critical financial decision.
Our team can negotiate with your lenders to establish a manageable monthly payment that suits your financial situation.
COVID-19 Update:
Private loan payments are still due and have not been postponed as of now. However, you may be able to request a deferment on a case-by-case basis. Approval depends on your individual circumstances and whether COVID-19 has impacted your ability to make timely payments.
Our office can assist in getting your private student loans out of default through loan modifications and consolidation. Our goal is to bring your loans current with a payment that fits your budget.
We will work to lower your monthly payment by modifying your loan in various ways. However, private lenders may have limitations on changes they can make. To secure a more manageable payment, our office will outline your financial constraints, exceptional circumstances, and all available modification strategies.
Additionally, we can explore refinancing options on your behalf, subject to credit requirements. For more details, refer to the Refinancing Section.
Our office can assist you in modifying the terms of your federal and private student loans to better suit your needs. Whether you seek lower interest rates, extended terms with reduced monthly payments, or a shorter term to minimize overall interest, we can work on your behalf to refinance your loan under more favorable conditions.
Contrary to common belief, both federal and private student loans can be negotiated and partially discharged through bankruptcy. To qualify for an undue hardship discharge, you must demonstrate the following:
Our office can present these mitigating circumstances in a Chapter 7 bankruptcy to argue that you are unable to repay your student loans and that all or part of them should be discharged.
In a Chapter 13 bankruptcy, our office will develop a plan to manage your debts and lower your payments for the first five years. Once the plan is complete, payments may increase, but you can reapply for Chapter 13 as many times as needed to continue managing your student loan debt.
As of January 27, 2020, borrowers in the Southern District of New York must engage in Student Loan Mediation with their lenders before pursuing student loan litigation through bankruptcy. This requires lenders and borrowers to discuss and seek mutually agreeable repayment solutions before filing a lawsuit. While this procedure is not currently in effect in the Eastern District of New York, it may influence student loan handling across New York, including in the New York Court of Appeals.
Case: N.Y. State Higher Education Services Corp., et al. v. Kevin Jared Rosenberg, 610 B.R. 454
In this case, the plaintiff, a self-represented attorney, filed an adversary proceeding seeking a discharge of his $221,385.49 consolidated student loan debt due to undue hardship. The court applied the Brunner Test and ruled in his favor, eliminating all of his student loan debt.
Application of the Brunner Test:
Minimal Standard of Living:
Persistent Financial Hardship:
Good Faith Effort to Repay:
Court’s Ruling:
The court granted the plaintiff’s motion for summary judgment, concluding that the Brunner Test was fully met and that the student loan debt imposed undue hardship.
Significance of the Case:
This ruling represents a hopeful precedent for student loan discharge in bankruptcy. However, it is expected that the defendant will appeal the decision, and the appellate court may reconsider whether the lower court was correct in granting summary judgment. The key legal question going forward will be whether there were disputed material facts that should have prevented a summary judgment ruling.
Overall, this case provides a glimmer of hope in the current challenging landscape of student loan debt, which has left many borrowers struggling with financial hardship.
MONDAY – FRIDAY -8.30 AM – 8.30 PM