- Debtor cannot afford to maintain a minimal standard of living if forced to repay student loans. (This is a tough burden, but not impossible to prove.)
- Circumstances exist indicating that this inability is likely to persist for the majority of the repayment period – a certainty of hopelessness. (This is almost impossible to prove.)
- Debtor has made good faith efforts to repay the loan.
- Standard Repayment (fixed payments for 10 years)
- Graduated Repayment (10 years, starts out small, then increases every 2 years)
- Extended Repayment (25 year term, fixed or graduated, must have more than $60k in student loan debt)
- Income Contingent Repayment (25 year term, based on income AND student loan balance, balance at end is forgiven)
- Income Based Repayment (25 year term, based solely on income, $0 payments are possible, unpaid balance is forgiven, pay 15% of calculated discretionary income (income beyond 150% of poverty guidelines), payments adjust each year based on prior year’s taxes)
When trying to provide notice or service of process to creditors, debtors’ ability to do so properly becomes difficult in a world where creditors have a couple dozen similarly-named subsidiaries or shell companies in existence, and they have hundreds (if not thousands) of offices scattered throughout the country. Debtors’ counsel find themselves trapped in an absurdly comical game of hide-and-seek, trying to pin down elusive creditors that seem to deliberately hide behind complex and opaque corporate structures. The point of this presentation is to TRY to un-muddy the waters somewhat.
Debtor shall use the address appearing on any two or more communications (e.g. billing statement, collection letters, etc.) received in the 90 days prior to filing the bankruptcy case. 90 day period does not apply to creditors who would be in violation of non-bankruptcy law by sending communications, in which case, the address appearing on the two most recent communications shall be used. 11 U.S.C. § 342(c)(2).
Although the creditor has a duty to terminate and reverse damages resulting from a stay violation, it could not be sanctioned for willful violation since it was not noticed pursuant to § 342 (appears that notice was sent to addresses appearing on a credit report). In re Tillett, 2010 Bankr. LEXIS 1342 (Bankr. E.D. Va. Apr. 23, 2010).
[…] a filed proof of claim shall stand as a notice of preferred address from the creditor. Fed. R. Bankr. P. 2002(g)(1).
“While no summons is issued and served upon the “defendant” in a contested matter, service of a pleading initiating a contested matter is made in the same manner as service of a summons and complaint in an adversary proceeding.” Dean v. Global Fin. Credit, LLC (In re Dean), 359 B.R. 218, 221 (Bankr. C.D. Ill. 2006).
Summons and Complaint shall be served in a manner authorized by FRCP 4, all subsequent documents and pleadings shall be served in a manner authorized by FRCP 5. In addition to FRCP 4, summons and complaint may be served by first class prepaid postage in the following manner:
Domestic or Foreign Corporation, Partnership, or Unincorporated Association: address to an officer, managing agent, general agent, authorized agent by law, or authorized agent by appointment. If agent is authorized by statute and the statute requires, also address to the defendant. Fed. R. Bankr. P. 7004(b)(3).
Insured Depository Institution (any FDIC-insured bank or savings association): address to an officer of the institution by certified mail, or first class mail to its attorney if the attorney has made an appearance. Confirm FDIC-insured status at http://www3.fdic.gov/idasp/. This requirement can be waived by court order in response to an application, or by the creditor’s voluntary waiver. Fed. R. Bankr. P. 7004(h).
Complex corporate structures – different entities with similar names. The following is a basic corporate structure glossary. There are many names given to different organizational structures, depending on ownership, holdings and purpose. It is important to keep in mind that an organization is either a formally organized entity, or it is not. If it is formally organized, there will be a designated agent for service. Parent. A formally organized entity that holds an ownership interest in another entity (subsidiary). The Parent company may have its own line of business, which may or may not be related to the business of the subsidiary. Subsidiary. A formally organized entity that is owned, at least in part, by another company (parent). In large corporate structures, a subsidiary might also be a parent company for another company down the line. Holding Company. A formally organized entity that exists primarily to own other companies. Similar to a parent company, but usually without its own line of business. Division. Usually (but not always) an informally organized part of another company. The division may have its own books and records, but is usually not formally organized (no filing with the State. If you are dealing with a company that is called a division, there is usually another company name that you will need to find. For example, “ABC, a division of XYZ Corp.”Shell or Dummy Company. A formally organized entity that will usually not have any assets of business of its own. These sorts of companies are used to shield information regarding ownership, holdings, etc. It is important to realize that these entities are actual companies, at least on paper. Corporate existence can be challenged based on inadequate capitalization and other grounds, but that is an expensive fight, and may not be relevant from a debtor’s standpoint.
When serving a mortgage company on a contested matter or adversary proceeding, it’s helpful to know who’s who in the industry to know whose conduct is at question or whose rights are sought to be modified.Mortgage Originator – the lender whose name appears on the mortgage and note (remember, the mortgage establishes the real estate as security for the loan; the note is a promissory note outlining the terms of loan repayment).Mortgage Holder – present owner of the mortgage; has the right to foreclose.Note Holder – present owner of the note; usu. (but not always) the same as the mortgage holder.Mortgage Servicer – party that accepts payment on behalf of the note holder, also responsible for holding / distributing escrow funds.
Not sure who’s who in your particular mortgage? Send a Qualified Written Request under RESPA to the mortgage servicer. 12 U.S.C. § 2605(e).