The U.S. Bankruptcy Court For The Southern District Of Florida established a Student Loan Program that begins May 3, 2021. It can be utilized for both federal and private student loans.
Relative to federal student loans, the goal is to enroll Chapter 13 debtors in Income Driven Repayment (IDR) Plans under the auspices of the bankruptcy court. IDR loan payments are based upon the debtor’s loan amount, income, and family size. The IDR monthly loan payment is typically much lower than the regular loan payment.
Significantly, the Chapter 13 debtor can separately classify the student loan (apart from general unsecured claims, like credit cards). She can pay the full monthly payment direct to the loan servicer (unlike general unsecured claims, which usually receive only a very low percentage of their claim). As the debtor pays the full monthly payment, she remains eligible for various federal loan forgiveness programs, that usually require 120 continuous full monthly payments.
The Law Offices Of Todd S. Frankenthal represents bankruptcy debtors in all divisions of the U.S. Bankruptcy Court For the Southern District Of Florida. It has offices in Fort Lauderdale, Boca Raton, and West Palm Beach.