Student Debt and Income Share Agreements­

Many Americans across the country are struggling to repay student loan debt, and many are dealing with unfair debt collection practices tied to student loans. Consumers with student loan debt vary widely in terms of age, with some debtors in their early 20s who recently graduated from college to older Americans who are working to pay off loan balances of tens of thousands of dollars—and sometimes much more—in student loan debt. While consumer bankruptcy rules could change to make it easier for people with student loan debt to receive a discharge in personal bankruptcy, until that point, people with student loan debt continue to struggle.

According to a recent article in The New York Times, for some people, student loan debt might not even be the worst of it. Some people have what are known as “income share agreements,” or “ISAs.” For some student borrowers, this alternative to taking out additional student loans can be enticing. However, for some students, choosing an ISA over a tradit…

Should I Repay Time-Barred Debt?

If you owe debts from many years ago, should you be planning to pay them off even if they have become time-barred? Just because a debt is time-barred does not mean that a debt collector cannot continue to call you in an effort to get you to make payments on the debt. Consumer bankruptcy may be an option.

A recent article in U.S. News & World Report discusses old debt and the reasons that it can hurt you, even when it has become time-barred. To say more, we want to explain what it means when a debt becomes time-barred. Then we want to explain some of the reasons that you should deal with time-barred debt even if you cannot be sued.

What is Time-Barred Debt in Illinois?
Time-barred debt refers to debt for which the statute of limitations has run out and, accordingly, the creditor is no longer permitted by law to file a lawsuit against the debtor in order to be repaid. The statute of limitations varies greatly depending upon the type of civil lawsuit, and even debt collection lawsuits h…

CFPB Plans New Restrictions on Debt Collectors

The Fair Debt Collection Practices Act (FDCPA) currently limits when debt collectors can make calls to debtors and, in some cases, where those debt collectors can attempt to make contact with debtors. For example, if you ask a debt collector to avoid calling you at work, the FDCPA says that the debt collector must abide by your request. In addition, debt collectors are not allowed to call at any time of day. Debt collectors are prohibited from calling you at unusual or inconvenient times, which include anytime before 8:00 a.m. and anytime after 9:00 p.m. However, the Consumer Financial Protection Bureau (CFPB) believes that more restrictions need to be in place to protect debtors from harassment and abuse by debt collectors, according to a recent article in The New York Times.

Proposed Rules Would Restrict Number of Phone Calls from Debt Collectors
One of the most significant of the proposed rules concerns the number of times that a debt collector can call a debt. According to the artic…

Bankruptcy for Student Loans Could Change

Currently, it is difficult but not impossible to have student loans discharged in bankruptcy. Given the high number of consumers with substantial student loan debt, however, many consumer advocates have urged lawmakers to reconsider the U.S. Bankruptcy Code and the ways in which it impacts debtors who are trying to have student loans discharged in Chapter 7 bankruptcy. According to a recent article in MarketWatch, new recommendations from the American Bankruptcy Institute (ABI) Commission on Consumer Bankruptcy could result in changes to how student loan debt is handled in consumer bankruptcy.

Bankruptcy Numbers May be Low Because People are Unable to File
The report focuses in part on the high number of people with student loan debt and the potential relationship to the decline in bankruptcy proceedings. Those who argue that current bankruptcy rules work well and should not be changed to make it easier to discharge student loan debt in bankruptcy point to the fact that the total number…

Five Factors to Consider if You are Thinking About Bankruptcy

Making the decision to file for consumer bankruptcy is never a decision that someone makes lightly. However, when a consumer is struggling with debt, filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy can help that consumer to deal with debt and, in some cases, to get a fresh start financially. If you are considering whether personal bankruptcy might be right for you, it is important to think carefully about the process before you file. An experienced Oak Park consumer bankruptcy lawyer can speak with you about your options, but in the meantime, the following are five important facts to consider if you are thinking about bankruptcy.

1. You may not be eligible to file for Chapter 7 bankruptcy.
Not everyone is eligible for Chapter 7 bankruptcy. Under the U.S. Bankruptcy Code, in order to be eligible to file for Chapter 7 bankruptcy—which is a liquidation bankruptcy—a consumer needs to be able to pass the “means test.” The means test is designed to show that the consumer’s income is …

U.S. Supreme Court Hears Arguments About Debt Collection After Consumer Bankruptcy Discharge

Should debt collectors be punished if they continue to try to collect on debts that have been discharged in bankruptcy? Consumer protection advocates argue that they should, but courts across the country have not agreed about the answer to this question. Given that bankruptcy judges have reached different conclusions concerning “how easy it should be to punish debt collectors who pursue debt even after a person is no longer obligated to pay,” according to a recent article in The Wall Street Journal, the U.S. Supreme Court will now decide the issue.

We previously discussed this case, Taggart v. Lorenzen, after the U.S. Supreme Court agreed to hear the case. Now that the Supreme Court has heard arguments in the case, we have a better sense of the types of questions the Court focused on during oral arguments. We want to say more about how the Court approached the issues in the case, and to discuss possible outcomes.

Key Facts from Taggart v. Lorenzen

As a brief reminder about what is at sta…

Consumer Bankruptcy Law Needs Fixing, Advocates Say

Should current consumer bankruptcy law be revised to better serve debtors across the country? According to a recent article in The Wall Street Journal, a new report from the American Bankruptcy Institute (ABI) Commission on Consumer Bankruptcy contends that “bankruptcy court . . . has lost its power to help people fix some financial problems stemming from the massive social and economic shifts that have taken place since modern bankruptcy law was passed in 1978.” In other words, consumer bankruptcy law is outdated, and it needs to be revised to take into account the 21st century needs of debtors. The law is now over 40 years old.

Bankruptcy Reform in 2005 Does Not Help Consumers in 2019
The 2005 bankruptcy reform is among the first issues that the report takes up. When new bankruptcy rules were put into place in 2005, fewer consumers were filing for bankruptcy. The reform also led to the “means test,” which makes it significantly more difficult for many individual debtors to file for C…