Lynch Law Offices, P.C.
Free Initial Consultations
Toll Free: 800-491-7493
Menu Contact

A Family Approach To The Law

Illinois AG sues scammers preying on student loan debtors p2

The Illinois Attorney General announced recently that the state is suing two companies that have been running student loan repayment scams. The companies have taken advantage of distressed borrowers in this state and across the county by using high-pressure sales techniques to sell services that they cannot deliver.

We discussed how the first company operates in our last post. The second company takes a slightly different approach, and we'll get to that in a minute. First, we wanted to explain why we are writing about student loan debt in a bankruptcy blog.

According to the Project on Student Loan Debt, 70 percent of last year's college seniors had outstanding student loans; those borrowers entered the workforce owing, on average, nearly $30,000 each. For advanced degrees, the total is considerably higher.

Right now, student loans cannot be discharged in a Chapter 7 or Chapter 13 bankruptcy (except under certain extraordinary circumstances), though there is a movement to change that. Bankruptcy would be an option, though, for people who have been paying their student loans but racking up credit card debt to make ends meet. Experience has proved that one debt leads to another; some are dischargeable, and some are not. The only way to be sure is to consult with a bankruptcy and debt management professional.

The second company named in the attorney general's lawsuit promises to eliminate student loan debt for an upfront fee and $50 a month for 10 years. Like the first company, this company has no power to negotiate lower payments or to reduce interest rates. The company instead puts the fees into an investment advisory firm, supposedly signing the borrowers up for services they neither asked for nor knew they were subscribing to.

The lawsuit seeks damages and reimbursement to the victims of all money paid to the defendants. What no lawsuit can do, of course, is to turn back the clock; the victims of these scams may now find themselves in even worse financial shape than they were when they answered the call from one of these companies.

Source: The Daily Caller, "Illinois Suing Student Loan Settlement Companies," Blake Neff, July 15, 2014

No Comments

Leave a comment
Comment Information

Contact Any Of Our Five Convenient Illinois Locations

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Us For A Response
Toll Free: 800-491-7493
Fax: 888-691-8337

Lynch Law Offices, P.C.
1011 Warrenville Road
Suite 150
Lisle, IL 60532

Toll Free: 800-491-7493
Fax: 888-691-8337
Map & Directions

Available to meet throughout Will and DuPont Counties