Beware of Student Loan Debt Schemes

If you have student loan debt and are struggling to make your payments, it is critical to know that you could be targeted by a student loan debt relief scam. Receiving a call or another form of contact from an alleged student loan debt relief organization can feel particularly welcome for many Americans, especially if you have recently read or heard that student loans can be difficult to discharge in a consumer bankruptcy case. Yet student loan debt relief companies may not be able to keep the promises they make to consumers, and they can ultimately cost you more money and stress in the long run.

Our experienced Oak Park consumer protection lawyers want to discuss a recent action taken by the Consumer Financial Protection Bureau (CFPB) against operators of an unlawful student loan debt relief company, and to tell you more about your options for managing student loan debt through bankruptcy and otherwise. It is a common misconception that there are no options to discharge student loan debt in a bankruptcy case, and our firm can speak with you about your ability to discharge student loan debt in a Chapter 7 bankruptcy case.

CFPB Sues Student Loan Debt Relief Company

According to a recent press release from the CFPB, the Bureau “sued a student loan debt relief company, its owner, and manager for allegedly charging thousands of consumers more than $3.5 million in illegal upfront fees.” As the press release explains, the company known as Student Loan Pro is accused of violating the Telemarketing Sales Rule (TSR), and was in business from 2015 until 2019. The company “provided federal student loan debt relief services to consumers nationwide,” according to the CFPB, yet Student Loan Pro required those student loan borrowers to pay fees associated with paperwork filings for student loan debt relief programs that are actually free.

In suing Student Loan Pro and its owner and manager, the CFPB is seeking monetary relief for affected consumers. David Uejio, the Acting Director of the CFPB, emphasizes how “Student Loan Pro preyed on thousands of borrowers, charging illegal upfront fees in clear violation of the Telemarketing Sales Rule.” The court filing says that the student loan debt relief company charged consumers as much as $795 for filing paperwork for free debt relief services. Why is this illegal? As the press release clarifies, “the TSR prohibits sellers or telemarketers from requesting or receiving advance fees for any debt-relief service before renegotiating, settling, reducing, or otherwise altering the terms of at least one of a consumer’s debts, and before a consumer has made at least one payment on such altered debt.”

You May be Able to Discharge Student Loan Debt in Bankruptcy

If you have avoided contemplating personal bankruptcy because you have heard that it is difficult or even impossible to discharge student loans, it is important to recognize that these are common misconceptions. While it can be more difficult to discharge student loans in bankruptcy than other types of unsecured debt like credit card debt or medical bills, it is not impossible.

An experienced Oak Park bankruptcy lawyer can assess your case for you today.

Contact Our Oak Park Consumer Protection Lawyers

If you have questions about your consumer rights or handling student loan debt, an Oak Park consumer protection lawyer as our firm can help. Contact the Emerson Law Firm for more information.


See Related Blog Posts:
What is Chapter 11 Bankruptcy for Consumers?
Pause on Veteran Debt Collection

Comments

Post a Comment

Popular posts from this blog

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more