Balki Bartokomous said, “I’m in debt, I’m a true American”. Saying this out loud sounds triumphant but there are times when your debt can reach a critical stage. How critical is ‘getting my lawyer involved’ critical?
Now you can ask yourself whether someone would go to those lengths of getting the law involved to help out with your student loans. The answer to that is it depends on your situation, we will have an in-depth understanding of the cases when you will require help from an attorney, when you don’t, where you can get a lawyer and how much it costs to get a student loan lawyer.
It is important to note that you might not always need a lawyer to help you with student loan debt but it is important to be aware of the various situations that can come up where you will require legal assistance.
Table of contents
- Student loan lawyer profile
- Student loan lawyer vs debt relief agency
- Cost to hire a student loan lawyer
- Find a student loan lawyer
Who is a student loan lawyer?
A student loan lawyer is a lawyer (who would have guessed that) with an in-depth and advanced understanding of student loans and how they function throughout their term.
They will annotate any tricky situations and help guide you through the federal system. In the cases of default, they will help you get out of it and help use the law with or without a lawsuit to help the system work in the best interests of the borrower.
Now you can ask yourself that you need help to reduce your monthly payments and not help with lawsuits which may or may not sprout up. Paying another fee for a lawyer isn’t going to help with your debt burdens.
Here are the situations when you don’t require assistance from an attorney
1) Income-driven repayment plans
These plans help you lower your monthly payments as the amount to be paid is based on your income. The various plans available are -
Revised Pay As You Earn ( REPAYE)
Pay As You Earn (PAYE)
Income-Based Repayment Plan (IBR)
Income Contingent Repayment plan (ICR)
Visit the Federal-aid website to get an understanding of the various programs available to you and estimate the amount you will have to pay. You do not require any additional assistance from a lawyer to enroll for this.
If you have missed a payment and can’t really figure out how you can make these payments because of the amount you don’t need to seek help from an attorney. Federal student loans have a lot of flexibility when it comes to repayments and private lenders do provide a number of options.
3) Job-driven forgiveness programs
You don’t need an attorney for selecting a program but you need to pay close attention to the requirements of the program. These kinds of programs not only help the student in repaying a loan but also help the community by fulfilling certain positions of need. Some of the common job-driven forgiveness programs are:
Teacher loan forgiveness program - this program is aimed at the forgiveness of loans for those who teach at a low-income area or certain qualified educational agencies.
Public Sector Loan Forgiveness program - this program is aimed at those who work at government organizations or non-profit organizations. Full time volunteers for the peace corps and marine corps can also eligible.
Certain states and universities also provide Loan Repayment Assistance programs for various professions.
4) Deferment and Forbearance
If you postpone a payment because of financial difficulties it is known as forbearance while deferment is when the postponement is because of certain circumstances. You don’t need a lawyer to apply for student loan deferment/ forbearance but you will have to do your homework and determine how long you would like to postpone the payments for.
5) Refinancing and consolidation
If you want to reduce the amount to be paid each month you can refinance your loan which can also help you get a lower interest rate. You can consolidate your loans if you find it difficult to manage a number of payments each month.
You don’t need a lawyer to help you with this, you will have to do your own homework and then contact the lending institutions to discuss a plan which best suits your situation.
6) Disability discharge
If you are disabled and can prove it to the department of education then you can apply for a disability discharge. You don’t need a lawyer for this, your loan servicer can help you apply.
Here are the situations where you will require the assistance of a student loan attorney
1) Defaulted student loans
If you haven’t made a payment in 270 days this is a signal to your lender that you have no intent to pay back your loans. At this point, a collection agency will be assigned to your case to take action against you. If you act quickly you have a chance to work things out with your loan servicer.
If your default proceeds to a lawsuit it is best to consult with a student loan attorney to help, there have been a lot of cases where borrowers deal with difficult and complex issues like a dispute with the loan servicer or being harassed by the debt collection agency.
Although it is not mandatory it is highly recommended for you to consult a lawyer while filing for a chapter 7 or chapter 13 bankruptcy. Especially if you would like to get your student loan discharged.
Under Chapter 7 Bankruptcy unlike your credit card debts, your student loan debts are not automatically discharged and you have to prove to the court that you are facing difficulty to make payments. You will have to file a lawsuit against your loan holder as part of the bankruptcy process. This process includes presenting a witness and evidence. There is a 40% success rate for those who try and prove their hardship.
Under Chapter 13 Bankruptcy you do not get discharged but you will have to reorganize your debt repayment under a plan, you can get a student loan lawyer with bankruptcy experience who can analyze what is best for your situation.
Learn more on Student Loan Bankruptcy
If your case has been transferred to a collection agency or worst case scenario you are being sued then you will want to consult with a student lawyer. It isn’t advisable to go ahead on your own or even if you do decide to it is better to at least consult with a student loan lawyer because the government can collect your federal loan debt payments from your income tax refund and garnish your wages.
Learn more on Student Loans in Collections
To clear yourself from default you can pursue rehabilitation, but you must apply for it before your lender sues you and obtains a judgment. You need to contact your loan servicer to rehabilitate and if the case has escalated and you are being sued it is best advised to consult a student loan lawyer.
If you are facing difficulty in contacting your loan servicer then you can consult your student loan attorney to rehabilitate your loans.
Learn more on Student Loan Rehabilitation
Student loan lawyer vs student debt relief agency
The function of a debt relief agency is to help you refinance your loans, sign you up for a better repayment plan to reduce your monthly payments or consolidate your loans all with a fee of course.
Student debt relief agencies are expensive and the services that they offer are something one can do on their own. So the bottom line is would you be ready to pay for a service you can get for free?
A student loan lawyer is not going to refinance or consolidate your loan. They will charge you a fee of course but the service they provide will provide essential assistance such as acting as your advocate, negotiating with your loan servicer or even file a lawsuit ( if warranted ). It is not advisable to represent and advocate yourself during a lawsuit or any other negotiations of that sort so in such cases it is highly recommended to shell out and pay for a student loan lawyer.
How much does it cost to hire a student loan lawyer?
Paying for something to help you get out of debt doesn’t sound like a good plan to get out of debt. If you decide that getting a student loan lawyer is the best step to take for your current situation then it is best to understand the cost structure you will have to face.
Before you think about the expenses to make if you decide to hire a student loan lawyer this is what Joshua Cohen a student loan lawyer had to say:
“Most times, a lawyer is cheaper than the alternative, such as wage garnishment, many attorneys, including me, can find ways to finance a borrower”
Doing a cost-benefit analysis is vital, how much are you paying in interest, fees and other costs? And how much will you have to pay your lawyer to help you get out of this situation?
“I also find most attorneys are cheaper than the consolidation companies while offering far better service and options,” said Cohen
Adam Minsky who is a practicing attorney and a nationwide expert in student loans has broken down 4 basic fee structures one will have to go through while hiring an attorney, they are:
1) Consultation fee - If you require advice or consultation for a specific topic or assistance for a specific issue then you can sign up for a session with an attorney where you will have to pay a fee based on the duration of the session. Pricing is determined by the attorney.
2) Hourly fee/ retainer - This is the traditional type of attorney-client arrangement where the client pays the attorney for his services at an hourly rate. An initial retainer is usually paid by the client which serves as an initial fee deposit or an advanced fee deposit to cover up a certain amount of billable time.
If the retainer is not used up completely then the balance is returned to the client. If the retainer gets depleted the client may have to replenish the retainer, the size of the retainer depends upon the attorney and the type of case requiring assistance. For example, the fee for defending a collection lawsuit is higher than the fee for a case requiring assistance with a loan consolidation application.
3) Flat fee - This is a set fee for a specific service, but it should be noted that there is no time constraint on the attorney for completing the service so however long it takes the attorney to complete the service the fee remains fixed without any additional fee being paid. This can actually protect the client from any additional charges to be made for the completion of a specific task.
4) Contingency fee - This kind of fee is only available for specific types of cases such as consumer rights lawsuits against third-party debt collectors or other cases where there is a violation of a specific law. The lawyer can only take a fee if he or she prevails in a case through judgment or settlement.
These specific laws whose violation the case revolves around allow for something called ‘ fee-shifting’ where the losing side is legally required to pay for the winner's side attorney fee. Because of this allowance attorneys only take up cases on a contingency fee basis if there is a solid claim that the attorney feels that there is a likelihood of succeeding in court.
If your current income is low and you can’t afford to get legal services you can check out different sources to get a pro bono, one source would be American Bar Association’s pro bono resources or the Legal Services Corporations legal aid finder.
Worried about college tuition? Learn more about student loans
Where can I find the right student loan lawyer?
Now you know when to hire a student loan lawyer, how the lawyer can help and the type of fee structure. But now where do you get the right lawyer for you? This is quite challenging and the fact that there are very few lawyers with experience and a thorough understanding of student loans and their functioning.
According to Adam S Minsky while looking for a lawyer to help out with your student loan debts, keep the following points in check:
Check the directory for the National Association of Consumer Associates ( NACA). Search for local attorneys who have listed “student loans” as an area of practice on NACA.
Contact your state bar association for a referral
Search for attorneys on a platform like Avvo, which has attorney profiles
Cross-verify the attorney with your state bar association to see if that attorney has any record of public discipline
Perform a google search on the attorney selected to see if his/her name comes up in a good way( through press or publications) or a bad way( sued by any agency or regulatory body for misconduct).
If you are struggling with your student loan debts there is nothing wrong in seeking out professional help especially in situations where legal matters are of concern. If you are exploring ways to make your student loan payments more affordable speak to a loan servicer, and if you are confused about how to start and are in doubt with the options laid out in front of you then consult with a student loan lawyer. But most of all be aware of the other options you can take advantage of to help you with your loans like repayment options and forgiveness programs