Wednesday, March 25, 2015

New Business

One man's trouble is another man's opportunity!

In my SPAM folder today:

*     Expand Your Law Practice To Include Student Loan Law by Attending The Student Loan Law Workshop!  You Can View the Stellar Testimonials from Other Attorneys Who Have Attended Joe Blow's Workshop by Clicking on the “To Get More Information” Link Below! 

*    Price Decreased by 33 Percent!   

*    Course is Already Approved for 12 CLE Credits by the State Bar of Georgia!

*    You can choose 1 of 3 Dates and Locations: May 1st and May 2nd in Detroit, Michigan, May 15th And May 16th in St. Louis, Missouri, or June 12th and June 13th in Manati, Puerto Rico
*    Limited Seating to only 15 Attendees! First Come First Served!
*    Course Is Taught By Student Loan Attorney, Joe Blow, Esq.
*     With Over $1 Trillion Dollars In Student Loan Debt, An Astronomical Amount of Student Loan Borrowers Are In Dire Need Of Legal Assistance.  The Subject Matter Is Unfortunately Grossly Underserved!
*     Course Covers Everything From A To Z In The Student Loan Law Realm.  The Unique and Evolving Subject Matter Of Student Loan Law Can Help Any Attorney Expand Their Law Practice.  It Doesn’t Matter Whether You Practice Bankruptcy Law, Personal Injury Law, Criminal Law, Family Law, Consumer Law, Commercial Law, Or ANY Other Type of Law.  Student Loan Law Can Be Practiced By Any Type of Attorney!
*     You Will Receive All Information And Documents Necessary To Expand Your Law Practice Immediately.  It Is A Hands On Workshop With Practical Applications!
*     You Can Begin Taking Clients The Very Next Day!
*     Pay For The Course All At Once Or Pay Over 6 Months Interest Free Via PayPal Credit.  It’s Your Choice!  
*     CLICK HERE To Get More Information And To Register One Of The Workshops
*     If Above Link Is Not Functioning, You Can Get More Information And Register At WWW.Joe Blow.COM
*     Register Soon And Get On The Track Of Becoming A Student Loan Attorney!

 * * *

You have to love lawyers, eh?   People are suffering with Student Loan debt, so why not make a buck off of them?  Misery loves company.

What is disturbing about this pitch is the "no experience necessary!" and "start practicing the next day!" pitch, which might be attractive for a young unemployed lawyer who is paying off his own massive student loan debts.

The problem is, can you really help these people, or just take their money?   As I noted in an earlier posting, a friend of mine in the immigration law business got out after a change in immigration laws made it much harder to allow folks who were here illegally to stay permanently.  Under the REAGAN (yes, that Reagan) Immigration Amnesty law, he could represent people, help them through the process, and help them get permanent resident status.

Once the law changed, well, you got caught, you get deported.  If you want a green card, you have to re-apply from your home country.   That did not stop a lot of immigration attorneys from promising clients that they could get them amnesty.  They would take large retainers ($5000 or more) represent them in the court hearing and then wave bye-bye to their clients as they got onto the deportation bus.

Just because you have representation, doesn't mean things will go your way.  And many unscrupulous attorneys will take a case that clearly cannot be won, simply because the client will pay.

There are few ways to get out from under Student Loan Debt - and bankruptcy is usually required.  Thus, I am skeptical that an attorney with no bankruptcy law experience will do well in this area.   Once you declare bankruptcy, you may be able to discharge some or all debt if you can show undue hardship.  As one case on the Debt Guy site illustrated, this is not easy to do.   The lady in question had co-signed  a student loan for her son.  She makes $20,000 a year and has Lupus.  The loan payments were more than her income (!!).   Her debt was partially discharged.

In order to meet the hardship standard, you have to show that you will never, ever be able to pay back these loans, no matter how hard you worked.   Choosing to work at a lower-paying job is not an excuse, either.   It is a tough hurdle to breach.

Another tactic is to see whether the school was accredited.   Apparently, some "for profit" schools were not properly accredited with the student loan authorities, and thus the loans are not immune from bankruptcy.

Both of these are fairly narrow exceptions.

There is a partial loan "forgiveness" program recently expanded by Executive Order by President Obama.  It allows people to pay 10% of their discretionary income for a limited time (20 years in most cases, 10 years for public service).  It appears that this only covers Federal Direct Student Loans, and not clear whether it covers private student loans:

"The president will sign an order directing the secretary of education to ensure that more students who borrowed federal direct loans be allowed to cap their loan payments at 10 percent of their monthly incomes, the official said.

Federal law currently allows most students to do this already. The president's order will extend this ability to students who borrowed before October 2007 or those who have not borrowed since October 2011, the official said."
Of course, the "partial" student loan amnesty program might not help a lot of people.  You still may have to make payments, of 10% of your "discretionary" income, for decades.   Discretionary income is the amount you earn above the poverty line for your family size.  In other words, there may not be a free lunch here, so don't sign the lease papers on that new Acura just yet:
The chart below shows the maximum repayment period for a Direct Consolidation Loan or FFEL Consolidation Loan under the Standard Repayment Plan depending on total education loan indebtedness.
If your Total Education Loan Indebtedness is…
…your Repayment Period will be…
At Least
Less Than

10 years
$ 7,500
12 years
15 years
20 years
25 years

30 years

So I suppose there is an area of "practice" to be carved out here.   You set up shop, hang your your shingle, and help confused kids fill out forms to get partial loan forgiveness or go through bankruptcy to try to get the whole enchilada.

And along the way, well, you can charge them a modest or not-so-modest fee to do this.  And if it turns out they make too much money to qualify for partial loan forgiveness, well, you can charge them anyway.

And of course, you can make a lot of money by helping people do something that can achieve themselves through a website.


As the Forbes article notes, this program ends up having unintended consequences - it allows people to take very low-paying jobs, including those in public service, while attending very expensive schools.  It removes the connection between demand for jobs and the cost of training.   It encourages people to go into fields which are already crowded and low-paying.

And it further subsidizes college, which really isn't fair to those who don't go to college.