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Surviving Debt: Entries R-Z

Reaffirmation. An agreement in the bankruptcy process to pay back a debt that would otherwise be discharged in bankruptcy. Most reaffirmation agreements are a bad idea.

Surviving Debt: Preventing Identity Theft

If you are concerned about your financial difficulties appearing on your credit report, the last thing you want is other negative information showing up that is caused by an identity thief using your Social Security number and credit history to open new credit, cell phone, or other accounts, and then defaulting on those accounts. Below are three ways to protect yourself from identity theft.

Surviving Debt: Dealing with Identity Theft

Identity theft happens when someone opens accounts in your name or makes charges to your existing accounts without your permission. The identity thief can be a complete stranger or someone you know. If the identity theft is the result of domestic violence or financial abuse, see Chapter 21 on addressing coerced debt. You should clean up identity theft items to protect your credit score and to prevent creditors or debt collectors from going after you for the debt:

Surviving Debt: Introduction

This chapter discusses debts incurred by an abusive partner through coercion and fraud. An abusive partner can use credit and debt to control, harm, or limit their partner financially. This type of behavior is a form of financial abuse and can have a severe impact on victims of domestic violence.

Surviving Debt: Steps to Prevent an Abuser’s Use of Existing Accounts

If an abusive partner has access to existing accounts, such as bank accounts, credit cards, utility accounts, cell phone accounts, or other lines of credit, you may want to take steps to prevent the abuser from using them to make more charges, take on more debt, or withdraw money.

You should first determine whether taking some of the steps below will put you or your family members at risk of future harm and develop a safety plan. If you need further assistance with a safety plan, reach out to the National Domestic Violence hotline at 1-800-799-7233 or 1-800-787-3224.

Surviving Debt: Stop an Abuser from Opening New Accounts in Your Name

Even after you have left an abusive relationship, an abusive partner may continue to commit fraud by opening new credit lines in your name and running up large debts or taking out loans in your name with no intention of paying them back. Credit reports are used by potential lenders and creditors to make decisions about whether to open a new account (that is, extend credit to you). They will check your credit report to determine if you are eligible for a credit card or other type of loan.

Surviving Debt: Protecting Your Bank Accounts

Abusive partners often exert control over household finances to bully and intimidate their victims. This controlling behavior could include restricting access to your bank accounts, forcing you to write bad checks, forcing you to overdraft accounts, and demanding that you deposit wages, refunds, and other income into bank accounts that you cannot access. Review your bank account statements to check for any fraud or misuse.

Surviving Debt: Responding to Debt Collectors

If the debt your abusive partner obtained in your name without your permission or through intimidation and manipulation remains outstanding, debt collectors may start to call or send you letters to collect the debt. Sometimes you may feel that you just want to pay so you no longer have to think about the debt. Determine what is best for you when thinking about whether you should pay the debt or not.

Surviving Debt: Defending a Debt Collection Lawsuit

If the debt is not resolved and remains unpaid, the creditor or debt collector might file a lawsuit against you. Chapter 4 provides an explanation of debt collection lawsuits, how you can respond to the lawsuit, and defenses and claims you can raise against collectors.

Surviving Debt: Dealing with Mortgage Debt

If your abusive partner has cut off financial support, has created and burdened you with additional debt, or your separation has caused increased expenses, you may find it difficult to afford your monthly mortgage payments.

Surviving Debt: Help Offered by Your Mortgage Servicer

The remainder of this chapter provides information on getting help from your mortgage servicer for what is called “loss mitigation.” Your mortgage servicer is the company you send your mortgage payment to each month. Foreclosures are costly for mortgage lenders, and they usually prefer to find an alternative by giving their servicers loss mitigation guidelines. A servicer must consider these guidelines before it can conduct a foreclosure sale.

Surviving Debt: Additional Resources

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NCLC’s Mortgage Servicing and Loan Modifications is a comprehensive legal treatise covering all major programs offering homeowners loan modifications and related relief from unaffordable mortgage payments. The treatise is kept current through updates to the digital version that can be purchased separately or is included with the print version. The treatise is available at www.nclc.org/bookstore.

Surviving Debt: Additional Resources

rupal://091f3c71-1730-4353-be6b-98b07c490138

NCLC’s Mortgage Servicing and Loan Modifications is a comprehensive legal treatise covering all major programs offering homeowners loan modifications and related relief from unaffordable mortgage payments. The treatise is kept current through updates to the digital version that can be purchased separately or is included with the print version. The treatise is available at www.nclc.org/bookstore.

Surviving Debt: Student Loans: A Trillion-Dollar Crisis

Almost 45 million Americans have student loan debt. Americans collectively owe over $1.75 trillion in student loan debt in 2023. Student loan debt impacts people of all ages, including an alarming number of older Americans. Because student debt burdens have increased and there is no statute of limitations on collection of federal student loans, this debt can follow people for decades.

Surviving Debt: You Have Options That Can Help

The COVID-19 student loan payment pause ended on September 1, 2023. This means that in October 2023, millions of borrowers had to begin making payments again on their federal student loans for the first time in nearly three years. There are different options for managing your federal student loan debt and getting more help if you can’t make your payments. You may even be eligible to have some, or all of your student loans canceled.

Surviving Debt: Step Three: Who Holds Your Federal Loans?

A loan holder is the owner of your student loans. Most federal student loans are owned and held by the federal government through the Department of Education. These loans are sometimes called “ED-held, “Department-held,” or “federally held” loans.

Surviving Debt: Step Four: Who Is Your Loan Servicer?

A loan servicer is a company that the loan holder or owner hires to handle the billing and other services on your student loans. The U.S. Department of Education contracts with several different companies to service federal student loans. Your loan servicer will work with you on repayment options and will help you with other issues related to your loans. If you need help with your student loans, you should contact your loan servicer first to see if they can assist you.

Surviving Debt: Are You Eligible to Have Your Loans Canceled, Forgiven, or Discharged?

Although the Supreme Court struck down President Biden’s plan to cancel up to $20,000 in student loan debt for millions of student loan borrowers, you may have other options to get debt relief. There are several programs to cancel some or all of your federal loans or have them forgiven, depending on your situation.

You may be able to cancel your federal student loans if:

Surviving Debt: The Payment Count Adjustment

The Department of Education recently announced a one-time account adjustment to help borrowers get more credit toward Income-Driven Repayment and Public Service Loan Forgiveness (PSLF) loan cancellation. While most borrowers will get this credit automatically, some borrowers may have had to take steps before December 31, 2023, to receive this credit.