A federally guaranteed student loan can be very difficult to discharge in bankruptcy, but there are ways to obtain debt forgiveness and to discharge federally-guaranteed student loans outside the context of bankruptcy. (The information in this article, current on 11/30/2014, addresses only non-bankruptcy alternatives for government student loans—not private student loans.)

Q:       I got a federal student loan, but now I have a physical disability. Can my loan be forgiven?

A:        If you are a federally guaranteed student loan borrower with a William D. Ford Federal Direct Loan Program loan, a Federal Family Education Loan (FFEL) Program loan, a Federal Perkins Loan Program loan, or a loan through the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program, you may qualify for a Total and Permanent Disability Discharge (TPD) through the Office of the U.S. Department of Education. To qualify:

·       a physician must certify that you cannot engage in any substantial gainful activity due to a medically determinable physical or mental impairment that can be expected to result in death, or has lasted, continuously, for at least 60 months or can be expected to last, continuously, for at least 60 months; or

·       the Secretary of Veteran Affairs must determine that you are unemployable due to a service-connected disability. 

            If your TPD request is approved, a three-year post-monitoring period will run from the date your loan was assigned to the Department of Education. During this three-year period, you cannot earn more than $15,730 (100 percent of the federal poverty guidelines for a family of two in 2014) and you cannot have obtained any new federal student loans. If you are a veteran and your disability is a 100 percent service-connected, then you are immediately eligible for a federal student loan discharge. 

             (For more information on this alternative for discharging your federal student loan, visit: www.disabilitydischarge.com). 

Q:       Can I do some public service so that a portion of my federally guaranteed student loan is forgiven?

A:        Yes, a portion of your federally guaranteed student loan debt may be forgiven under the Public Service Loan Forgiveness (PSLF) Program, but only if you have a non-defaulted William D. Ford Federal Direct Loan Program (Direct Loan Program). Specifically, you may qualify for forgiveness of the remaining balance due on your Direct Loan Program loan after you make 120 qualifying payments while you are employed full-time by certain public service employers, including most local, state, federal, tribal government organizations, or 501(c)(3) corporations. Also, the amount of the debt that is forgiven is not taxable as income.

            The Direct Loan Program includes:

·       Federal Direct Stafford/Ford Loans;

·       Federal Direct Unsubsidized Stafford/Ford Loans;

·       Federal Direct PLUS Loans – for parents and graduate or professional students; and

·       Federal Direct Consolidation Loans. 

            If you took out loans under other federally guaranteed student loan programs, they may become eligible for forgiveness if you consolidate them into a Direct Consolidation Loan. However, only payments you make on the Direct Consolidation Loan will count toward the required 120 qualifying payments. (For more information on this alternative for discharging your federal student loan, visit: https://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness.pdf). 

Q:       I defaulted on a federally guaranteed student loan. Is there anything I can do?
A:        Yes, you may receive a one-time chance to bring your loan out of default. Monthly payments can be reset to a “reasonable rate,” but you must make nine payments on time over a ten-month period. If you meet this requirement, your student loan can be restored to a pre-default status. That means your eligibility for deferment, forbearance, alternative repayments and Title IV aid would be restored and your credit report would be updated.  These federal loans may be eligible for this sort of “rehabilitation”: Federal Stafford Loans, Federal Perkins Loans, Federal PLUS (Parent Loans for Undergraduate Students), Federal Grad PLUS (PLUS loans for graduate and professional students), Federal Consolidation Loans, Federal SLS, Health Professions Student Loans, and Nursing Student Loans. (For more information on this alternative for restoring your federal student loan to a pre-default status, visit: https://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness.pdf). 

Q:       Are there any other loan forgiveness and cancelation alternatives for a federally guaranteed student loan?

A:        Yes, these alternatives may be helpful if they apply to your situation:

·       a Closed School Discharge (if your school closes while you’re enrolled or soon after you withdraw);

·       a False Certification Discharge (if your school falsely certified your eligibility to receive the loan based on your ability to benefit from its training);

·       a Teacher Loan Forgiveness (if you have been teaching full-time in a low-income elementary or secondary school for five consecutive years, as much as $17,500 of your loans may be forgiven);

·       and a September 11 Survivors Discharge.                         

(For more information about these alternatives and others, visit: https://studentaid.ed.gov/repay-loans/forgiveness-cancellation#false-certification).

This “Law You Can Use” consumer legal information column was provided by the Ohio State Bar Association. It was prepared by attorney Jeffrey S. Rosenstiel, a partner in the Cincinnati firm of Graydon Head & Ritchey LLP. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       When my husband and I divorce, will my Social Security benefits be affected?

A:        No. Under federal law, you qualify for Social Security benefits in one of two ways: by 1) earning credits, based on your annual earnings, which determine your monthly benefits when you retire; or by 2) being married to someone for more than 10 years, which qualifies you for a spousal benefit.

When you retire, you may choose whichever of these Social Security options provides you with the greatest benefit: 1) your earned credits into the system, 2) your current spouse’s spousal benefit or 3) the highest spousal benefit from a former spouse of a marriage that lasted more than 10 years.

            Some people have had more than one former marriage, each lasting more than 10 years. Let’s say you are a high wage-earner and have two former spouses from marriages lasting more than ten years each. Even if both of your former spouses claim and receive spousal benefits from your Social Security, it will not affect the amount of benefits you will receive. 

Q:       I’ve been receiving health insurance coverage through my wife’s work policy. Will my family health benefits lapse when we divorce?
A:        As a matter of strict law, family plan medical coverage terminates on the date of a “qualifying event,” which, in your case, would be the date of your divorce or dissolution of marriage. Federal law requires that, within 30 days of the termination of your benefits, your wife’s employer must notify you about the termination and inform you about COBRA coverage, if that coverage applies. (COBRA coverage allows workers and their families who lose their health benefits the right to continue to receive benefits provided by their group plan for a limited amount of time. If you qualify for a COBRA policy, you may be entitled to a maximum of 36 months of additional coverage. However, COBRA plans are expensive.)

            As a practical matter, most insurance companies will maintain your coverage through the end of the month of the final divorce hearing. Also, to avoid any lapses in coverage, any health insurance policy you may buy after your divorce will be retroactive, which means that it will cover you from the date that your family coverage was terminated.

Q:       How do I receive pension benefits from my soon-to-be-ex spouse?
A:        You and your spouse can divide pension benefits as a term of your divorce or dissolution of marriage. If your spouse’s pension plans are not “qualified” and are not protected by the federal Employee Retirement Income Security Act (ERISA), then they may be divided through a trustee-to-trustee transfer. This is just an administrative division that the appropriate financial professional can handle.

            However, most pensions, such as 401(k), 403(b) and some other defined benefit pension plans, are protected by ERISA. If your spouse’s pension benefits are protected, then the benefit must be divided through a “qualified domestic relations order” (QDRO).  The QDRO is a court order that allocates the retirement asset between the person who earned the benefit (the “plan participant” – your former spouse) and the “alternate participant” (you).  When your pension benefits are allocated, it is a non-taxable event. As long as you keep your share of the retirement in a qualified (retirement) account such as an IRA account, it will continue to grow as a tax free retirement account.

 

Q:       If I die in the middle of the divorce, who inherits my estate?
A:        The answer depends on whether you and your spouse signed a separation agreement before your death, and whether there is language in the separation agreement stating that the agreement will be binding if there is no final divorce decree. If you and your spouse have waived the surviving spouse rights in the separation agreement, which is almost always done, AND the agreement is binding in the absence of a final divorce decree, then whatever you and your spouse agreed to in the separation agreement can be enforced. If you and your spouse did not sign a separation agreement, then all spousal rights apply. 

This “Law You Can Use” article was provided by the Ohio State Bar Association. It was prepared by Cleveland attorney Manav (Manu) H. Raj, Esq. of Rieth Antonelli & Raj. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       How have social media and electronic communication brought about new legal challenges?

A:        Online communication has become a hotbed for litigation, in part because people believe they can hide their identities behind a computer or smartphone screen. Many users are discovering, however, that their online fouls can cross over the line into actionable, illegal conduct. Social media has become a primary communication tool in our culture, and has resulted in new types of lawsuits. For example, employees have been terminated from employment for communications or disclosures made via social media, and individuals have been sued for defamatory statements they have made via social media.

Q:       What kind of online statements can expose someone to liability?

A:        Social media is a fairly new communication tool, but the law regarding communication has not changed. The term Twibel, a combination of “Twitter” and “libel” has been adopted to describe this mix of social media communications and old law. Libel is defaming someone (publishing a false statement of fact that harms another’s reputation or business) through written or printed words, pictures, or any form other than the spoken word. Twibel is simply libel that is committed through a social media communication tool.

In one Twibel suit, a real estate company brought a $50,000 suit against a tenant for tweeting this: “Who said sleeping in a moldy apartment was bad for you? [The real estate company] thinks it’s okay.” The court dismissed the case, finding the tweet was “too vague to meet the legal standard for libel.” Others cases have been similarly unsuccessful.

Twibel cases are reviewed just like old-fashioned print defamation cases, and courts still want to see proof of damage to reputation. If the plaintiff (the person bringing suit) cannot prove that his or her reputation was damaged, then the court usually will dismiss the case, unless the defamatory statement is a per se statement. A per se statement is a communication that is very obviously damaging. For example, if someone wrote that the plaintiff has a sexually transmitted disease, the court might decide that damages are inferred even if not proven.

The outcome of a defamation case is also affected by whether or not the person claiming defamation is a public figure. Courts rarely decide that a public figure has been defamed because a public figure is considered a “fair target” for defamatory statements. To be awarded damages in a defamation case, a public figure must prove that a defamatory statement was not only damaging, but that it was made with malicious intent. This private vs. public distinction figured in the very first Twibel trial in 2014. The attorney for deceased musician Kurt Cobain’s estate brought a defamation suit against Courtney Love, Cobain’s spouse. In that case, the judge determined that Cobain’s estate attorney was a public figure. The judge’s determination meant that the attorney had to prove Love’s defamatory statement was made “with actual malice, meaning that she intentionally made a false statement, knowing it was false, or that she acted without regard to its truth or falsity. The jury determined that Love had not made the statement “with actual malice,” but if she had made the same statement about a private figure, the jury may well have decided against Love. 

Q:       Can I be held liable for statements I make on anonymous review sites like Yelp and Angie’s List?

A:        Yes. Online communication suits also concern online reviews attached to products and services reviewed on the Internet through sites like Yelp, Citisearch, and Angie’s List. However, you would have to make a false statement of fact, not opinion. Defamation lawsuits must be about false statements of fact. In one of the first cases of this type (Dietz v. Perez), a Virginia contractor filed a $750,000 defamation lawsuit against a blogger. Through Angie’s List, the blogger had not only accused the contractor of poor work, but also of trespassing and stealing. The blogger filed a countersuit, also alleging defamation. At trial, the jury decided that both sides had defamed each other, but neither was awarded damages. Eventually, the blogger took down the scathing review. In the court’s ruling, the judge wrote that it was not his job to rule on free speech, but that the blogger’s actions had endangered people’s ability to write freely in online reviews: “If you want to chill free speech, keep it up, because eventually one of these companies is going to win big…. That will chill free speech, when somebody is hit with a huge monetary verdict.”

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by attorney Sara H. Jodka of Porter, senior counsel with McDonald Hopkins LLC. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       How does a lawyer handle my confidential information?

A:        A lawyer must “act competently to safeguard information relating to the representation of a client,” according to Model Rule 1.6, which governs attorneys’ ethical practices. Today, a lawyer must understand how cloud computing works in order to competently comply with this obligation. With any cloud or virtual online storage hosting of client data, your lawyer should enter into a Service Level Agreement (SLA) that dictates how client data and files are kept secure. The law office should use firewalls and data encryption to further ensure that a client’s data is kept confidential.

Q:       Does my lawyer have to follow any standards to safeguard my confidential information?

A:        Anyone who has Federal Taxpayer Information (FTI) must follow standards set by the Internal Revenue Service (Regulation 1075). This regulation provides guidelines and procedures not only for computer use but also for storing and destroying physical files containing FTI. While this regulation is probably “over kill” for the average law office, it is an excellent guide for law firms to follow. For example, law offices should have written policies regarding remote access to their computer systems and for the use of thumb drives. Internet use by employees on computers housing client’s information should be regulated and monitored.

Q:       Should my attorney’s law office employees be allowed to work remotely with my client data?

A:        If there is a proper system in place, this may be acceptable, as long as the employee always adheres to your attorney’s profession obligations. You may want to question your attorney about the firm’s plan for protecting your client information at all times. For example, you might ask your attorney: Will any of your staff members work on the firm’s laptop or their home computers? Is the firm’s computer or external storage device password protected? Do staff members work on files remotely and email them to the office? There are many ways a law firm can address these concerns by using various encryption options. These options are now standard on most word processing programs and .pdf files, but the encryption only works if a password is sent by separate email to the person receiving the information.

Q:       How can my attorney avoid a data breach like those I’ve heard about in the news?

A:        If Target, Home Depot, celebrity iCloud accounts, and many others can experience a data breach, then so can your attorney. Forty-three percent of companies have experienced a data breach in the last year according to USA Today, and that is likely a conservative estimate, since many data breaches are not reported. Your attorney may not be able to avoid a data breach, but a law office that expects to be hacked is more likely to provide office policies addressing confidential information, including safeguards for hardware and software. Your attorney and staff should be trained on cyber and physical security of confidential client information. Whether using the Cloud, a smartphone or the office paper shredder, your attorney has a duty to competently safeguard your information.

Q:       I’ve seen the paper shredder at my attorney’s office. That’s a good sign I’m protected, right?

A:        Maybe, but if your attorney opens up the shredder and you can still read anything on the scraps, then your documents may as well have been crumbled into balls and thrown away. At a minimum, a paper shredder must cross-cut, diamond-cut or pulverize documents. If your attorney uses a third-party vendor to dispose of your confidential documents, then your attorney must be familiar with that company’s policies and procedures for disposal. Your attorney’s duty to you not only extends to his or her employees, but also to any third-party vendors the firm may use.

Q:       Should I send information to my attorney through Instant Message, Facebook, or Instagram?

A:        You cannot expect your attorney to safeguard your information when you submit it through an unsecure platform. Your attorney’s law office likely spends time and money to understand every aspect of the proper storage, transmission and destruction of your client information. Law offices must also train support staff and third-party vendors on the firm’s best practices. If you open the door for a data breach, however, none of your attorney’s safeguards will protect your information.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Dayton attorney Gregory M. Gantt. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.