The U.S. Bankruptcy Court Middle District of Florida has introduced a new student loan modification program allowing those with student loan debt to reorganize and potentially discharge this debt with a Chapter 13 bankruptcy filing. Although nearly 2.5 million state residents have more than $85 billion in combined student loan debt, bankruptcy does not typically provide relief for these loans.
If you struggle with student loan payments and live in one of the 35 counties covered by this court, read on to learn more about how you may benefit.
What is the SLM program?
Starting Sept. 1, the court will launch an online portal with assistance for Florida residents who have student loan debt. Borrowers can access income-based repayment plans through the so-called student loan modification program.
How can I qualify?
If you have filed for Chapter 13 bankruptcy in the Middle District of Florida, you can subsequently file a Notice of Participation in SLM if you have student loan debt. Within seven days, you must submit the Initial SLM Package providing details and documentation of your education loans.
Within 30 days of this submission, your lender must either request more documentation or alert you of available modification and repayment programs for which you qualify. If you reach an agreed-upon payment amount through one of these programs, the lender will file a Notice of IDR. Otherwise, the lender will file a Notice of No Resolution and the court trustee will review it along with your other monthly payments to determine an affordable amount.
After your Chapter 13 filing is complete, you will pay a lump sum monthly payment to the trustee assigned to your case. He or she will distribute this payment to your creditors, including the student loan repayment amount stated in your IDR. Your automatic stay, which prevents creditors from contacting you after you file for bankruptcy, will also apply to the creditors that administer your student loans.