There are so few travelers left at Kennedy International Airport, one of the world’s busiest airfields, that taxis wait six hours or more for a single passenger.
Taxi companies can no longer find enough drivers for their fleets because there is so little business.
And some cabdrivers are so fearful of being exposed to the coronavirus they are staying home with no way to pay mounting bills.
All this at a time when many of New York City’s taxi owners are already in financial ruin after taking out reckless loans to buy medallions — city-issued permits required to own a yellow cab — at artificially inflated prices, with the reassurance of the city’s taxi commission of their high value.
Their industry has increasingly lost riders to the boom in Uber, Lyft and ride-app services, and been shaken by a spate of suicides by desperate taxi owners and for-hire drivers.
Now taxi owners and drivers who were barely holding on said their livelihood had evaporated as the city all but shut down to try to slow the spread of the coronavirus.
“When you have to wait six or seven hours to get one passenger, it’s really bad,” said Mario Darius, 66, a taxi owner who was camped out at Kennedy Airport after picking up just three fares in three days.
Though citywide taxi ridership numbers for March are not yet available, some taxi companies, cab owners and drivers said their rides had plunged by two-thirds or more.
The city’s largest taxi group, the Metropolitan Taxicab Board of Trade, which represents the owners of 5,500 yellow cabs, said rides had dropped nearly 91 percent to a total of 20,596 trips over this past Friday, Saturday and Sunday. That is compared with 217,540 total trips for the same three days three weeks ago.
Sunday, March 29, 2020
Wednesday, March 25, 2020
Coronavirus Decimates N.Y.C. Taxi Industry: ‘The Worst It’s Ever Been’ from New York Times March 25, 2020
Coronavirus Decimates N.Y.C. Taxi Industry: ‘The Worst It’s Ever Been’
There are so few travelers left at Kennedy International Airport, one of the world’s busiest airfields, that taxis wait six hours or more for a single passenger.
Taxi companies can no longer find enough drivers for their fleets because there is so little business.
And some cabdrivers are so fearful of being exposed to the coronavirus they are staying home with no way to pay mounting bills.
All this at a time when many of New York City’s taxi owners are already in financial ruin after taking out reckless loans to buy medallions — city-issued permits required to own a yellow cab — at artificially inflated prices, with the reassurance of the city’s taxi commission of their high value.
Their industry has increasingly lost riders to the boom in Uber, Lyft and ride-app services, and been shaken by a spate of suicides by desperate taxi owners and for-hire drivers.
Now taxi owners and drivers who were barely holding on said their livelihood had evaporated as the city all but shut down to try to slow the spread of the coronavirus.
THE LATESTRead our live coverage of the coronavirus outbreak in the New York area.
“When you have to wait six or seven hours to get one passenger, it’s really bad,” said Mario Darius, 66, a taxi owner who was camped out at Kennedy Airport after picking up just three fares in three days.
Though citywide taxi ridership numbers for March are not yet available, some taxi companies, cab owners and drivers said their rides had plunged by two-thirds or more.
The city’s largest taxi group, the Metropolitan Taxicab Board of Trade, which represents the owners of 5,500 yellow cabs, said rides had dropped nearly 91 percent to a total of 20,596 trips over this past Friday, Saturday and Sunday. That is compared with 217,540 total trips for the same three days three weeks ago.
Latest Updates: Coronavirus Outbreak in New York
White House emphasizes how hard New York is being hit.
New York police report a drop in crime and a rise in infection among officers.
Governor Cuomo becomes the politician of the moment.
See more updates
Updated 15m ago
More live coverage: Global Markets U.S.
The New York Taxi Workers Alliance, which represents about 21,000 taxi and ride-app drivers, said a detailed survey of seven members who are taxi drivers found they earned an average of $368 — not including expenses, gas or taxes — from March 15 to March 21, a 71 percent drop from $1,260 two weeks earlier.
Bhairavi Desai, the alliance’s executive director, said it had received calls from dozens of taxi drivers who can no longer afford to pay for necessities like groceries and medicine.
ImageSome drivers have seen the number of rides drop by more than 90 percent.
Some drivers have seen the number of rides drop by more than 90 percent. Credit...Chang W. Lee/The New York Times
“They are facing immediate loss of income when they have no savings to fall back on and an uncertain future as to when the economy will begin to recover," she said. “It’s devastating. I thought we had hit a low point already.”
Across the country, taxi and ride-app drivers have seen their business all but disappear in cities like San Francisco, where people have been ordered to shelter in place, as well as other communities, including Chicago, Philadelphia, and Washington.
Taxi owners need immediate help to survive, Ms. Desai said, including making interest-free city loans available and requiring lenders to partially forgive loans for medallions and temporarily suspend collection of loan payments.
And she urged that state unemployment benefits be extended to taxi drivers, who are considered independent contractors and do not qualify.
A spokesman for New York City’s Taxi and Limousine Commission, which regulates the for-hire driving industry, said officials were working with the taxi industry and government agencies “on a number of supportive measures” but declined to give any details, saying discussions were ongoing.
20-Somethings Now Realizing That They Can Get Coronavirus, TooMarch 23, 2020
Density Is New York City’s Big ‘Enemy’ in the Coronavirus FightMarch 23, 2020
Gov. Andrew M. Cuomo was seeking federal disaster assistance that would provide unemployment benefits to contract workers, including taxi drivers.
The City Council speaker, Corey Johnson, a Democrat who is running for mayor, has proposed a $12 billion relief plan for businesses and workers impacted by the coronavirus — which would cover for-hire drivers. The plan includes expanded unemployment benefits and an immediate payout of $550 to every adult and $275 to every child.
“This crisis is unlike anything we’ve ever seen before,” said Mr. Johnson, who has led recent efforts to help the ailing taxi industry. “Every New Yorker is struggling, and for-hire vehicle drivers are among the hardest hit.”
A sample pool of 5,533 for-hire drivers in New York City — most of whom work for Uber and other ride apps — found that they drove significantly fewer hours and miles, according to Nexar, a software company that analyzes data from its network of smart dashboard cameras.
On March 18, they drove an average of 3 hours and 35 minutes, down 39 percent from 5 hours and 50 minutes on a typical Wednesday. They also covered an average of 48 miles, a 32 percent drop from 71 miles.
“This is so massive and so sudden, it’s a shock to the system,” said Eran Shir, Nexar’s co-founder and chief executive officer, who has seen similar drops in other cities. “We’ve never seen anything like that.”
Uber and Lyft declined to release their ride numbers in New York.
But Uber’s chief executive officer, Dara Khosrowshahi, said in a March 19 call with investors that bookings for rides in Seattle and other hard-hit areas had fallen by as much as 60 to 70 percent.
New York City has about 200,000 for-hire drivers licensed by the Taxi and Limousine Commission. The drivers are issued a universal license that allows them to drive yellow taxis, which are capped at nearly 13,600 by the city, and for ride-app services.
The commission, which tracks taxi ridership numbers, has only collected data through January, well before coronavirus reached New York.
Michael Woloz, a longtime taxi industry consultant, said taxi garages had stayed open through some of the city’s worst crises — including the Sept. 11 terror attacks and Hurricane Sandy — but were reeling from the coronavirus fallout.
Many garages, he said, were taking extraordinary steps to get their taxis out on the streets, including reducing leasing fees for drivers by as much as two-thirds.
Other garages were waiving leasing fees altogether, and instead waiting until the end of drivers’ shifts to see if there was any profit to split.
“Right now, it’s the worst it’s ever been,” Mr. Woloz said.
At Kennedy Airport, taxi drivers are stuck in a central holding area for hours before finally being dispatched to pick up passengers at the terminals.
The other day, dozens of taxis were lined up, with some drivers talking on their cellphones to pass the time while others leaned back for a nap.
Edrice Ulysses, 57, of Brooklyn, pounded on his steering wheel in frustration. “Every day one fare,” he said. ”Eight hours, nine hours, ten hours, one fare.”
Marc Petit-Homme, 54, a yellow taxi driver for nearly three decades, said the airport was so slow one day that he finally gave up and drove to Manhattan looking for passengers.
But over five hours, he made just $49 — normally, it would be five or 10 times that much.
So the next day, he was back at the airport. Waiting. “The last two weeks, we suffer,” said Mr. Petit-Homme, as he paced nervously beside his taxi.
Many taxi drivers said their financial worries were compounded by fears of catching the virus and passing it on to their families.
Nino Hervias, a taxi owner who is 61 and had pneumonia last year, has not driven his taxi since March 17.
Mr. Hervias, who has a loan of more than half-a-million dollars on his medallion, said he cannot make the monthly payments on that or on the mortgage on his family’s home in New Jersey, or even cover their everyday living expenses.
“We have food for another two days,’’ he said.
Other taxi owners and drivers are taking their chances, armed with hand sanitizer and disinfectant wipes.
Wilfred Fequiere, 64, who lives in Queens and has driven a cab for 35 years, said he used to average a dozen passengers a day. Now, it is two passengers, if he is lucky, but sometimes none at all.
“Before it wasn’t good,” he said. “Now it’s worse.”
Thursday, March 19, 2020
Bankruptcy Filings and the Discharge of Taxes
Affluent Taxpayers and the Discharge of Taxes in Bankruptcy
In these difficult times, many clients have contacted Shenwick
& amp; Associates asking whether they should file for
bankruptcy and whether the taxes they owe are dischargeable
in bankruptcy. Both bankruptcy law and tax law are code
oriented and the intersection of those two areas of the law
can create complexity and confusion.
As we have discussed in prior blog posts, “old income” taxes
are dischargeable in a Chapter 7 personal bankruptcy filing.
The term “old” generally means that the taxes must be more
than 3 years old or more than 3 years must have passed
from the date of the filing of the debtor’s tax return and the
date of the debtor’s bankruptcy filing (“3 Year Rule”). This
is a “back of the envelope” analysis for purposes of this blog
post and an actual analysis would include a review of the
Debtor’s account transcript from the IRS and an analysis of
the facts of the case.
In addition to the 3 Year Rule calculation, the bankruptcy
attorney must also determine if the debtor attempted to
evade or defeat the payment of taxes pursuant to section
523(a)(1)(c) of the Bankruptcy Code. If the debtor took
action to evade the payment of taxes, then the taxes are not
dischargeable in bankruptcy notwithstanding the fact that the
taxes are old and have met the 3 year rule discussed above.
The recent case of United States v. Harold, No. 16-05041
(Bankr. E.D. Mich. 2020) proves an example of actions by
a taxpayer/debtor that rise to the level of an attempt to evade
taxes, which result in the taxes not being dischargeable despite
the taxpayer/debtor having met the 3 Year Rule.
Dr. Harold (debtor) was a successful medical doctor with an
OB/GYN practice. The issue in the case was the discharge of
the federal tax liabilities for 2004 through 2012 and 2014 that
met the 3 Year Rule. Unless the exception for attempting to
evade the payment of taxes applied, the taxes would be
discharged in Dr. Harold’s bankruptcy filing.
Dr. Harold grossed approximately $500,000 from her practice
during the years at issue.
Despite owing taxes, Dr Harold had an affluent lifestyle: 1. She
purchased a new home in 2005 along the Detroit River
waterfront, 2. She sent her children to private grade schools
and high schools, 3. Her children attended private colleges.
4. The family took multiple family vacations to Mexico,
Alaska, Puerto Rico, Orlando, Washington, D.C., Paris,
Las Vegas, Hawaii, and Dubai and 5 the family drove
expensive cars: a Jaguar, a Mercury Mountaineer, two
Cadillacs, two Lincolns, a Lexus and a Harley
Davidson motorcycle.
In this author's experience, the IRS will subpoena the
Debtor’s bank and credit card statements for the relevant
years to determine what the Debtor spent their money on.
The Court found that the facts of the case indicated that
her expenditures were voluntary and demonstrated that
the Debtor engaged in conduct to evade or defeat the
payment of her tax liabilities for the years 2004-2012
and 2014 pursuant to 523(a)(1)(c) of the Bankruptcy
Code and the taxes were not dischargeable.
The case provides a lesson for high income earners who
file for bankruptcy and had used their money to purchase
luxury goods or services instead of paying their taxes,
the IRS will object to the discharge of their taxes in their
bankruptcy filing and the IRS will likely prevail.
James H. Shenwick, Esq. has an LLM in Taxation from
NYU Law School and counsels many clients with tax
and debtor/creditor issues.
James Shenwick
Shenwick & Associates
122 East 42nd St
Suite 620
New York, NY 10168
Bankruptcy & Creditor's Rights
“We always appreciate referrals”
W 212-541-6224
E: jshenwick@gmail.com
Fax 646-218-4600
Cell Phone: 917-363-3391
Website: https://shenwick-associates.business.site/
Website: https://sites.google.com/site/jshenwick/home
Blog: http://shenwick.blogspot.com
LinkedIn: http://www.linkedin.com/in/jamesshenwick
In these difficult times, many clients have contacted Shenwick
& amp; Associates asking whether they should file for
bankruptcy and whether the taxes they owe are dischargeable
in bankruptcy. Both bankruptcy law and tax law are code
oriented and the intersection of those two areas of the law
can create complexity and confusion.
As we have discussed in prior blog posts, “old income” taxes
are dischargeable in a Chapter 7 personal bankruptcy filing.
The term “old” generally means that the taxes must be more
than 3 years old or more than 3 years must have passed
from the date of the filing of the debtor’s tax return and the
date of the debtor’s bankruptcy filing (“3 Year Rule”). This
is a “back of the envelope” analysis for purposes of this blog
post and an actual analysis would include a review of the
Debtor’s account transcript from the IRS and an analysis of
the facts of the case.
In addition to the 3 Year Rule calculation, the bankruptcy
attorney must also determine if the debtor attempted to
evade or defeat the payment of taxes pursuant to section
523(a)(1)(c) of the Bankruptcy Code. If the debtor took
action to evade the payment of taxes, then the taxes are not
dischargeable in bankruptcy notwithstanding the fact that the
taxes are old and have met the 3 year rule discussed above.
The recent case of United States v. Harold, No. 16-05041
(Bankr. E.D. Mich. 2020) proves an example of actions by
a taxpayer/debtor that rise to the level of an attempt to evade
taxes, which result in the taxes not being dischargeable despite
the taxpayer/debtor having met the 3 Year Rule.
Dr. Harold (debtor) was a successful medical doctor with an
OB/GYN practice. The issue in the case was the discharge of
the federal tax liabilities for 2004 through 2012 and 2014 that
met the 3 Year Rule. Unless the exception for attempting to
evade the payment of taxes applied, the taxes would be
discharged in Dr. Harold’s bankruptcy filing.
Dr. Harold grossed approximately $500,000 from her practice
during the years at issue.
Despite owing taxes, Dr Harold had an affluent lifestyle: 1. She
purchased a new home in 2005 along the Detroit River
waterfront, 2. She sent her children to private grade schools
and high schools, 3. Her children attended private colleges.
4. The family took multiple family vacations to Mexico,
Alaska, Puerto Rico, Orlando, Washington, D.C., Paris,
Las Vegas, Hawaii, and Dubai and 5 the family drove
expensive cars: a Jaguar, a Mercury Mountaineer, two
Cadillacs, two Lincolns, a Lexus and a Harley
Davidson motorcycle.
In this author's experience, the IRS will subpoena the
Debtor’s bank and credit card statements for the relevant
years to determine what the Debtor spent their money on.
The Court found that the facts of the case indicated that
her expenditures were voluntary and demonstrated that
the Debtor engaged in conduct to evade or defeat the
payment of her tax liabilities for the years 2004-2012
and 2014 pursuant to 523(a)(1)(c) of the Bankruptcy
Code and the taxes were not dischargeable.
The case provides a lesson for high income earners who
file for bankruptcy and had used their money to purchase
luxury goods or services instead of paying their taxes,
the IRS will object to the discharge of their taxes in their
bankruptcy filing and the IRS will likely prevail.
James H. Shenwick, Esq. has an LLM in Taxation from
NYU Law School and counsels many clients with tax
and debtor/creditor issues.
James Shenwick
Shenwick & Associates
122 East 42nd St
Suite 620
New York, NY 10168
Bankruptcy & Creditor's Rights
“We always appreciate referrals”
W 212-541-6224
E: jshenwick@gmail.com
Fax 646-218-4600
Cell Phone: 917-363-3391
Website: https://shenwick-associates.business.site/
Website: https://sites.google.com/site/jshenwick/home
Blog: http://shenwick.blogspot.com
LinkedIn: http://www.linkedin.com/in/jamesshenwick
Tuesday, March 17, 2020
AG James and Cuomo suspend state debt collection
From: Crain's New York Business
By: Gwen Everett
https://www.crainsnewyork.com/coronavirus/ag-james-and-cuomo-suspend-state-debt-collection
By: Gwen Everett
https://www.crainsnewyork.com/coronavirus/ag-james-and-cuomo-suspend-state-debt-collection
More than 165,000 debts are affected by the decision, the AG and
governor said, adding that the freeze will last at least 30 days.
During that time, the attorney general's office will take applications to suspend other types of debt owed or referred to the state, James said, and will decide whether to extend the freeze.
During that time, the attorney general's office will take applications to suspend other types of debt owed or referred to the state, James said, and will decide whether to extend the freeze.
Monday, March 16, 2020
NYC taxis struggle to make ends meet amid coronavirus scare
From: NY Post
Coronavirus has slammed the brakes on the Big Apple taxi industry.
New York City cabbies are suffering a radical drop in ridership amid concerns over the potentially deadly bug, with some only scraping together a few bucks after long shifts behind the wheel.
“We don’t make money,” said Queens cabbie Jones Donkoi while trying to land fares on the Upper West Side. “I collected $300 in fares but if you take the taxes and surcharges and lease payment, I make about $40 at the end of a 12-hour shift.”
“I support three children,” he said. “I’m going to find another job because I can’t continue like this. I can’t buy anything.”
Driver Mohammad Azad said it’s so bad out there that he had just $10 in his pocket after his first three hours on the road on Sunday.
“Our pockets are empty,” said Azad, who was near Spring Street in SoHo Sunday. “If it continues like this, it will be very hard to survive in New York City. All taxi drivers are miserable. Am I scared? Yes. But we take the risks.”
Another driver said he took home just $50 one day last week, and at one point drove around two hours without a single fare.
“I don’t know what’s going to happen,” said the cabbie, who would only identify himself as Patrick. “I am driving around hoping to get a passenger and there are none. They are too scared.”
One cabbie said his family has had to cut down on food spending and even stopped buying laundry detergent to try to get by.
Taxi garages throughout the city told The Post that business has dropped by 30–50 percent as fewer tourists hit the city and more locals stay indoors to avoid contact with the COVID-19 virus.
And cabbies are feeling the squeeze.
“It’s really dire out there,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “Trips dry up after evening hours and with significant loss of airport trips, only small fares remain.”
A chunk of the fares they collect go toward paying off their pricey taxi medallions or, in some cases, the weekly lease payments to garages that rent them their cabs.
“Tomorrow I will ask if my garage can lower the rate to rent the cabs,” said Brooklyn cabbie Abdallah Abdujabar. “Every week I pay $600 plus gas, EZ Pass. It adds up to $800, $900.”
Then there are fees that come out of the fares, including a $2.50 state congestion surcharge and a 30-cent city surcharge.
According to taxi garage owners and dispatchers, the crunch is having a ripple effect on the industry.
Garages that rent out the cabs rely on the drivers’ lease payments to pay off their medallions, and without that money coming, some owners said they risk defaulting on bank loans they took out to make their medallion payments.
“My drivers work a 12-hour shift and they’re not even making the money to pay the lease on the car,” said Mahbub Hassan, a dispatcher at Yellow Cab Crescent Management in Long Island City. “In four hours, they’re lucky to get three rides.”
“We have 268 cabs in our fleet, and 100 of those cars are just sitting there without drivers,” Hassan said. “We have been giving our drivers $200, $300 discounts on the lease, and drivers are still not making enough to cover the lease payment.”
Added a manager at Midtown Operating Corp: “At the end of the day, we are all in the same boat along with the rest of the city. My pockets are not that deep.”
Meanwhile, drivers said they also have to live with the fear that they’re exposing themselves to the virus while trying to make a living.
“They give me three hand sanitizers per shift,” driver Muhammad Boote, a cabbie for 12 years, said of his bosses at Queens Medallion Leasing in Long Island City. “I’ve almost run out. I need to ask for more.”
Additional reporting by Anabel Sosa and Khristina Narizhnaya
Coronavirus has slammed the brakes on the Big Apple taxi industry.
New York City cabbies are suffering a radical drop in ridership amid concerns over the potentially deadly bug, with some only scraping together a few bucks after long shifts behind the wheel.
“We don’t make money,” said Queens cabbie Jones Donkoi while trying to land fares on the Upper West Side. “I collected $300 in fares but if you take the taxes and surcharges and lease payment, I make about $40 at the end of a 12-hour shift.”
“I support three children,” he said. “I’m going to find another job because I can’t continue like this. I can’t buy anything.”
Driver Mohammad Azad said it’s so bad out there that he had just $10 in his pocket after his first three hours on the road on Sunday.
“Our pockets are empty,” said Azad, who was near Spring Street in SoHo Sunday. “If it continues like this, it will be very hard to survive in New York City. All taxi drivers are miserable. Am I scared? Yes. But we take the risks.”
Another driver said he took home just $50 one day last week, and at one point drove around two hours without a single fare.
“I don’t know what’s going to happen,” said the cabbie, who would only identify himself as Patrick. “I am driving around hoping to get a passenger and there are none. They are too scared.”
One cabbie said his family has had to cut down on food spending and even stopped buying laundry detergent to try to get by.
Taxi garages throughout the city told The Post that business has dropped by 30–50 percent as fewer tourists hit the city and more locals stay indoors to avoid contact with the COVID-19 virus.
And cabbies are feeling the squeeze.
“It’s really dire out there,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “Trips dry up after evening hours and with significant loss of airport trips, only small fares remain.”
A chunk of the fares they collect go toward paying off their pricey taxi medallions or, in some cases, the weekly lease payments to garages that rent them their cabs.
“Tomorrow I will ask if my garage can lower the rate to rent the cabs,” said Brooklyn cabbie Abdallah Abdujabar. “Every week I pay $600 plus gas, EZ Pass. It adds up to $800, $900.”
Then there are fees that come out of the fares, including a $2.50 state congestion surcharge and a 30-cent city surcharge.
According to taxi garage owners and dispatchers, the crunch is having a ripple effect on the industry.
Garages that rent out the cabs rely on the drivers’ lease payments to pay off their medallions, and without that money coming, some owners said they risk defaulting on bank loans they took out to make their medallion payments.
“My drivers work a 12-hour shift and they’re not even making the money to pay the lease on the car,” said Mahbub Hassan, a dispatcher at Yellow Cab Crescent Management in Long Island City. “In four hours, they’re lucky to get three rides.”
“We have 268 cabs in our fleet, and 100 of those cars are just sitting there without drivers,” Hassan said. “We have been giving our drivers $200, $300 discounts on the lease, and drivers are still not making enough to cover the lease payment.”
Added a manager at Midtown Operating Corp: “At the end of the day, we are all in the same boat along with the rest of the city. My pockets are not that deep.”
Meanwhile, drivers said they also have to live with the fear that they’re exposing themselves to the virus while trying to make a living.
“They give me three hand sanitizers per shift,” driver Muhammad Boote, a cabbie for 12 years, said of his bosses at Queens Medallion Leasing in Long Island City. “I’ve almost run out. I need to ask for more.”
Additional reporting by Anabel Sosa and Khristina Narizhnaya
What Trump’s Student Loan Interest Freeze Does - And Does Not - Do
From: forbes.com
By: Adam S. Minsky
Yesterday, President Trump announced that he would be freezing student loan interest as part of his national emergency declaration regarding the Coronavirus outbreak. But with few details provided during his public announcement, student loan borrowers have been wondering what exactly this means for them.
Here’s what President Trump’s student loan interest rate freeze would do:
This is an evolving situation, so stay tuned.
By: Adam S. Minsky
Yesterday, President Trump announced that he would be freezing student loan interest as part of his national emergency declaration regarding the Coronavirus outbreak. But with few details provided during his public announcement, student loan borrowers have been wondering what exactly this means for them.
Here’s what President Trump’s student loan interest rate freeze would do:
- Interest accrual on certain federal student loans will be frozen. This means that no further interest will accrue on certain federal student loans going forward.
- The student loan interest freeze will only apply to student loans “held by federal government agencies,” such as the U.S. Department of Education and its contracted student loan servicers.
- The student loan interest freeze is temporary, but will continue indefinitely until the policy is changed.
- The student loan interest freeze will be implemented automatically, likely in the coming week (although the exact timing is unclear).
- Private student loans are not covered by the interest freeze, since these loans are not held by U.S. federal government agencies.
- Certain federally-guaranteed student loans — such as federal Perkins loans and FFEL-program loans — may not be subject to the interest freeze if they are not held by a federal government agency (which is the case for many of these loans).
- Borrowers must continue to pay their normal monthly payments on all
student loans. Your monthly payment amount will not change, nor will
your payments be suspended. To be absolutely clear: the President’s declaration does not include any student loan payment relief at all, whatsoever.
- For student loan borrowers who have already accrued significant uncapitalized interest (such as for borrowers on income-driven repayment plans), all outstanding interest will still have to be paid off first, before any payment will be applied to principal. This is required under federal regulations and the underlying federal student loan promissory notes, and President Trump’s declaration does not alter these terms.
- For student loan borrowers in default, so-called “forced collections” will continue. That means student loan borrowers will still be subject to administrative wage garnishment, offset of Social Security payments, and involuntary seizure of federal and state tax refunds.
This is an evolving situation, so stay tuned.
Sunday, March 15, 2020
Biden endorses Warren's bankruptcy plan, calling it 'one of the things that I think Bernie and I will agree on'
From: CNN Politics
By: Eric Bradner and Arlette Saenz, CNN
Sat March 14, 2020
By: Eric Bradner and Arlette Saenz, CNN
Sat March 14, 2020
(CNN) Former Vice President Joe Biden says he now backs Massachusetts Sen. Elizabeth Warren's bankruptcy plan, endorsing his former Democratic rival's proposal to repeal portions of a law they had clashed over 15 years earlier.
Biden touted his support for Warren's plan as an olive branch to supporters of Vermont Sen. Bernie Sanders
in a virtual town hall for Illinois voters Friday night, calling it
"one of the things that I think Bernie and I will agree on."
He
highlighted a portion of Warren's plan that would allow student loan
debt to be eliminated in bankruptcy just like other debts.
"I'm
going to endorse -- I've endorsed -- Elizabeth Warren's bankruptcy
proposal, which in fact goes further, allows for student debt to be
relieved in bankruptcy, provides for a whole range of other issues that
allows us to in fact impact on how people are dealing with their
circumstances," Biden said. "So there's a whole range of things we agree
on."
Biden's move to back Warren's plan shows
that, as he moves toward clinching the Democratic presidential
nomination and seeks to soothe over tensions from a year-long
intra-party battle, the former vice president is taking steps to embrace
his former rivals and adopt planks of their platforms -- and is willing
to move left to do so.
Warren's
team got a heads-up from the Biden camp that he would be endorsing the
senator's bankruptcy plan ahead of his public announcement on Friday, a
Warren aide told CNN's MJ Lee. The two teams were in touch leading up to
the announcement, the aide said.
A
Biden campaign aide said he would likely say more about his support for
Warren's bankruptcy plan in his debate against Sanders on Sunday night.
Biden and Warren's high-profile
battle over a 2005 bill that made it more difficult to declare
bankruptcy, when he was a Delaware senator and leading advocate of the
measure and she was a Harvard professor and vocal opponent, played a key
role in inspiring Warren's move into politics.
As
a presidential candidate, she used it to highlight her differences with
Biden. On the day in April 2019 that Biden entered the race, she said
at a rally that Biden had been "on the side of the credit companies."
The
law, which was heavily backed by the banking and credit card
industries, made it harder for Americans to get out of debt by filing
for bankruptcy. Supporters of the measure said it would prevent
financially irresponsible people from abusing the system, while
opponents denounced it, saying it would hurt struggling people by
increasing the regulation, documentation and costs of seeking bankruptcy
protection. Bankruptcies plummeted after the law took effect, but not
for the right reasons, consumer advocates argued.
Biden
was seen as a leading proponent of the bill at the time, though it was
largely backed by Republicans and passed by a GOP-controlled Congress.
Biden's campaign has argued he successfully fought for changes to the
bill that prioritized child support and alimony in front of lenders and
required credit card companies to warn borrowers about their interest
rates.
The Warren plan
targets a series of provisions that she has criticized for years,
arguing that they benefit credit card companies and big lenders at the
expense of Americans struggling with consumer, household and student
debt.
Warren's
proposal would make the bankruptcy system "simple, cheap, fast, and
flexible," she wrote in a Medium post when she unveiled it in January.
It would merge the two types of consumer bankruptcy filings -- Chapter 7
and Chapter 13 -- into one, offering filers a "menu of options" for
dealing with their unpaid debt. It would eliminate what she termed
"burdensome paperwork" that makes bankruptcy more expensive, deterring
some from filing. It would reverse the 2005 law's requirement that
filers seek pre-filing credit counseling, as well as the additional
rules it placed on consumer bankruptcy attorneys.
She
would also reduce the cost of filing and make it easier for people to
keep their homes and cars during bankruptcy. The proposal would make it
harder for the wealthy to shield assets in trusts and would crack down
on companies that violate consumer financial protection laws while
trying to collect on debts. And her proposal would end the ban on
shedding student loan debt in bankruptcy.
Saturday, March 14, 2020
NYC Cap on Ride-Hail Vehicles Made Permanent from Courthouse Web Services
NYC Cap on Ride-Hail Vehicles Made Permanent from Courthouse News Service
MANHATTAN (CN) – The New York City Taxi and Limousine Commission voted Tuesday to permanently freeze the number of Ubers, Lyfts and other ride-hailing vehicles that drive here.
A one-year cap on such vehicles was set to expire next week. It was first instituted last August after a 39-6 City Council vote.
Taxicabs speed down Broadway near the intersection of Seventh Avenue and 42nd street in New York’s Times Square on May 5, 2005. (AP Photo/Kathy Willens)
From 12,600 in 2015 to more than 80,000 last year, the number of Uber, Lyft, Via and similar vehicles on the city’s streets has exploded in recent years, according to Taxi and Limousine Commission reported by Bloomberg. More cars mean more of them drive around empty, increasing congestion and emissions.
In addition to the vehicle cap, the commission voted Wednesday to reduce the amount of time drivers can spend looking for riders below 60th street in Manhattan. That allotted downtown time will drop to 31% by August 2020, down from its current level of 41%.
Uber challenged the cap in court earlier this year, claiming it relied on bogus traffic data. The ride-hailing service said the cap was anti-competitive and “will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit” in the outer-borough areas where most Uber trips occur.
New Yorkers are split on the issue, with some saying the city should instead address other causes of its traffic-congestion crisis, such as by implementing congestion pricing in Midtown Manhattan. The city’s residents are also widely frustrated with the crumbling subway system, which sometimes forces people to find alternate methods of transportation, with the history of race discrimination among yellow cabs, and with the trend of sporadic taxi service in the outer-boroughs.
Community groups in the city have fought against the cap, saying it stifles drivers’ abilities to buy rather than lease the cars they use.
New York Mayor Bill de Blasio, a contender in the 2020 Democratic presidential primary, weighed in on the decision Wednesday.
“For far too long, ride-share apps took advantage of their drivers,” de Blasio said in a statement. “Their wages plummeted and families struggled to put food on their tables. We stood up and said no more. We will not let big corporations walk all over hardworking New Yorkers and choke our streets with congestion. Our caps have resulted in increased wages and families finally have some relief.”
Arthur Goldstein, a former attorney for the Taxicab Service Association, called the cap long overdue.
“The ride-hailing cap will help to reduce congestion on our streets, but does not adequately address the consequences of nearly a decade of government inaction,” Goldstein, who is with the firm Davidoff Hutcher & Citron, said in an email. “When Uber, Lyft and other app-based companies began flooding the streets with cars, many yellow cab owners who have invested in taxi medallions were deprived of an opportunity to earn a return on their investment. These largely immigrant entrepreneurs who invested in taxi medallions are still suffering. Uber and Lyft continue to operate relatively free from regulations applied to their regulated yellow cab competitors and, with ten of thousands of ride-hailing vehicles remaining on the street, the problem persists.”
MANHATTAN (CN) – The New York City Taxi and Limousine Commission voted Tuesday to permanently freeze the number of Ubers, Lyfts and other ride-hailing vehicles that drive here.
A one-year cap on such vehicles was set to expire next week. It was first instituted last August after a 39-6 City Council vote.
Taxicabs speed down Broadway near the intersection of Seventh Avenue and 42nd street in New York’s Times Square on May 5, 2005. (AP Photo/Kathy Willens)
From 12,600 in 2015 to more than 80,000 last year, the number of Uber, Lyft, Via and similar vehicles on the city’s streets has exploded in recent years, according to Taxi and Limousine Commission reported by Bloomberg. More cars mean more of them drive around empty, increasing congestion and emissions.
In addition to the vehicle cap, the commission voted Wednesday to reduce the amount of time drivers can spend looking for riders below 60th street in Manhattan. That allotted downtown time will drop to 31% by August 2020, down from its current level of 41%.
Uber challenged the cap in court earlier this year, claiming it relied on bogus traffic data. The ride-hailing service said the cap was anti-competitive and “will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit” in the outer-borough areas where most Uber trips occur.
New Yorkers are split on the issue, with some saying the city should instead address other causes of its traffic-congestion crisis, such as by implementing congestion pricing in Midtown Manhattan. The city’s residents are also widely frustrated with the crumbling subway system, which sometimes forces people to find alternate methods of transportation, with the history of race discrimination among yellow cabs, and with the trend of sporadic taxi service in the outer-boroughs.
Community groups in the city have fought against the cap, saying it stifles drivers’ abilities to buy rather than lease the cars they use.
New York Mayor Bill de Blasio, a contender in the 2020 Democratic presidential primary, weighed in on the decision Wednesday.
“For far too long, ride-share apps took advantage of their drivers,” de Blasio said in a statement. “Their wages plummeted and families struggled to put food on their tables. We stood up and said no more. We will not let big corporations walk all over hardworking New Yorkers and choke our streets with congestion. Our caps have resulted in increased wages and families finally have some relief.”
Arthur Goldstein, a former attorney for the Taxicab Service Association, called the cap long overdue.
“The ride-hailing cap will help to reduce congestion on our streets, but does not adequately address the consequences of nearly a decade of government inaction,” Goldstein, who is with the firm Davidoff Hutcher & Citron, said in an email. “When Uber, Lyft and other app-based companies began flooding the streets with cars, many yellow cab owners who have invested in taxi medallions were deprived of an opportunity to earn a return on their investment. These largely immigrant entrepreneurs who invested in taxi medallions are still suffering. Uber and Lyft continue to operate relatively free from regulations applied to their regulated yellow cab competitors and, with ten of thousands of ride-hailing vehicles remaining on the street, the problem persists.”
Wednesday, March 04, 2020
How to get rid of debt without paying from Bankrate
Outstanding debt is higher than ever. The Federal Reserve Bank of New York reports that household debt in the United States has now reached its highest-ever total: more than $14 trillion.
Regardless of the debt you’re suffering from, you might not see an end in sight. Is there a chance you can get out of debt without paying?
The answer is maybe, depending on a number of factors. Here are some ways you can explore getting out of debt that don’t include paying it.
How you can get out of debt without paying
Debt might feel homogeneous, but each type is different — so your options will depend on which type you’ve accrued. Before you stop paying, make sure you know the limitations and the long-term ramifications of doing so.
How to get out of student loan debt without paying
There are a few different options for getting out of student loan payments. Your loan, job status and sometimes the school you attended all determine what you’re eligible for.
Income-driven repayment plans: These revise your monthly payment to 10 to 20 percent of your income for the next 20 or 25 years (depending on the plan). After that, the remaining loan balance is forgiven.
Public Service Loan Forgiveness: Available for those who work in the public sector, like employees at the federal, state and local level, and for those who work for a nonprofit organization. After you’ve made 120 qualifying payments while working full time for a qualifying employer, the rest of your Direct Loans will be forgiven.
Teacher Loan Forgiveness: Open to teachers who work five consecutive years at a low-income elementary or secondary school and to those who work at an educational service agency. You might qualify for forgiveness of up to $17,500 of your Direct Loans or Stafford Loans.
Perkins Loan Cancellation: Teachers, firefighters, law enforcement officers and others are eligible for Perkins Loan cancellation or discharge. Cancellation can happen over the course of five years, while discharge could happen in the event of bankruptcy, death or disability.
Closed school discharge: If your school closed while you were attending (or soon after you withdrew), you may qualify to have your federal student loans discharged.
Discharge options: You could get your loans discharged in the event of death, permanent disability or — very rarely — bankruptcy.
For most options, you’ll need to make qualifying, timely payments each month. However, even then, not everyone qualifies or receives forgiveness. For instance, less than 1 percent of Public Service Loan Forgiveness applicants were approved and considered eligible.
You can’t have a defaulted loan forgiven, but defaulted loans may qualify for discharge, depending on the loan and the program.
How to get out of credit card debt without paying
If you have more credit card debt than you can handle, there are a few steps you can take; however, you may want to consider the repercussions.
If you stop paying your credit card bill, it gets turned into collections and your credit score tanks. But there’s a statute of limitations for how long creditors can sue you for outstanding credit card debt, which varies from three to 10 years in most states. You could skip payments, but you might be liable for them later. Even at that point, if you are sued for outstanding payment, you most likely wouldn’t win the case.
Another route is debt settlement, which is when you settle your debt with the current lender (or collection agency, if it’s reached that point) for less than what you owe. You may not be responsible for your entire credit card debt, but you’d still pay some of it.
How to get out of debt through bankruptcy
Bankruptcy should only be considered if you don’t have any other options. Filing for bankruptcy may sound like you’re starting over, but depending on the route you go, you may still be on the hook for some of your outstanding debt.
In a Chapter 7 bankruptcy filing, some of your assets are sold off to pay back debt, meaning you could lose your home and personal property. A few months after filing, your remaining debt will be discharged — although Chapter 7 typically won’t cover things like student loan debt or child support.
In a Chapter 13 filing, you get set up on a court-ordered repayment plan. Any remaining debt after a certain time has passed, like five years, might be discharged. This process means you’ll spend even longer paying off your debt, and you’ll also have a bankruptcy filing on your credit report.
Depending on the type of bankruptcy you file, a bankruptcy filing could stay on your credit report for up to 10 years, which is why it’s important to carefully weigh your options and your outstanding debt. Debt collectors can’t attempt to collect a debt that was discharged in bankruptcy, and they can’t continue collection activity while the bankruptcy case is pending — but the filing itself will have long-term effects on your financial health.
Why not paying off debt doesn’t work
Your credit report is a vital part of your financial well-being. Late or missed payments, defaults, collections and bankruptcies not only crush your credit score, but can also hurt your chances of taking out a loan or getting approved for a credit card.
Not paying your bills also puts you in a dangerous position with lenders. Avoiding payment means that creditors can sue you for unpaid bills. In some states, you could get your wages garnished or have your assets seized. Even if you aren’t making the payments directly, you’re still paying your outstanding debt.
Alternatives to bankruptcy
If you have the chance to avoid bankruptcy, you should take it. Here are some alternatives to consider.
Supplement your income: Whatever you need to do to start paying off your debt, do it now. Ask for a raise at work or move to a higher-paying job, if you can. Get a side-hustle. Start to sell valuable things, like furniture or expensive jewelry, to cover the outstanding debt.
Ask for assistance: Contact your lenders and creditors and ask about lowering your monthly payment, interest rate or both. For student loans, you might qualify for temporary relief with forbearance or deferment. For other types of debt, see what your lender or credit card issuer offers for hardship assistance. If you have the means, see if friends and family will help you.
Take out a debt consolidation loan: If you have many different types of debt, look into consolidation options. Taking out a debt consolidation loan is a way to simplify your finances — putting all of your debt in one place — and potentially pay less interest in the long run.
Get professional help: Reach out to a nonprofit credit counseling agency that can set up a debt management plan. You’ll pay the agency a set amount every month that goes toward each of your debts. The agency works to negotiate a lower bill or interest rate on your behalf and, in some cases, can get your debt canceled.
The bottom line
It can feel like it’ll take a lifetime to get out of a huge debt trap. You may skip payments, consider not paying at all or file for bankruptcy. While you might, in certain circumstances, get out of paying your outstanding debt, the likelihood is low. And more often than not, it’s harmful to your financial well-being to avoid paying your outstanding debt.
Regardless of the debt you’re suffering from, you might not see an end in sight. Is there a chance you can get out of debt without paying?
The answer is maybe, depending on a number of factors. Here are some ways you can explore getting out of debt that don’t include paying it.
How you can get out of debt without paying
Debt might feel homogeneous, but each type is different — so your options will depend on which type you’ve accrued. Before you stop paying, make sure you know the limitations and the long-term ramifications of doing so.
How to get out of student loan debt without paying
There are a few different options for getting out of student loan payments. Your loan, job status and sometimes the school you attended all determine what you’re eligible for.
Income-driven repayment plans: These revise your monthly payment to 10 to 20 percent of your income for the next 20 or 25 years (depending on the plan). After that, the remaining loan balance is forgiven.
Public Service Loan Forgiveness: Available for those who work in the public sector, like employees at the federal, state and local level, and for those who work for a nonprofit organization. After you’ve made 120 qualifying payments while working full time for a qualifying employer, the rest of your Direct Loans will be forgiven.
Teacher Loan Forgiveness: Open to teachers who work five consecutive years at a low-income elementary or secondary school and to those who work at an educational service agency. You might qualify for forgiveness of up to $17,500 of your Direct Loans or Stafford Loans.
Perkins Loan Cancellation: Teachers, firefighters, law enforcement officers and others are eligible for Perkins Loan cancellation or discharge. Cancellation can happen over the course of five years, while discharge could happen in the event of bankruptcy, death or disability.
Closed school discharge: If your school closed while you were attending (or soon after you withdrew), you may qualify to have your federal student loans discharged.
Discharge options: You could get your loans discharged in the event of death, permanent disability or — very rarely — bankruptcy.
For most options, you’ll need to make qualifying, timely payments each month. However, even then, not everyone qualifies or receives forgiveness. For instance, less than 1 percent of Public Service Loan Forgiveness applicants were approved and considered eligible.
You can’t have a defaulted loan forgiven, but defaulted loans may qualify for discharge, depending on the loan and the program.
How to get out of credit card debt without paying
If you have more credit card debt than you can handle, there are a few steps you can take; however, you may want to consider the repercussions.
If you stop paying your credit card bill, it gets turned into collections and your credit score tanks. But there’s a statute of limitations for how long creditors can sue you for outstanding credit card debt, which varies from three to 10 years in most states. You could skip payments, but you might be liable for them later. Even at that point, if you are sued for outstanding payment, you most likely wouldn’t win the case.
Another route is debt settlement, which is when you settle your debt with the current lender (or collection agency, if it’s reached that point) for less than what you owe. You may not be responsible for your entire credit card debt, but you’d still pay some of it.
How to get out of debt through bankruptcy
Bankruptcy should only be considered if you don’t have any other options. Filing for bankruptcy may sound like you’re starting over, but depending on the route you go, you may still be on the hook for some of your outstanding debt.
In a Chapter 7 bankruptcy filing, some of your assets are sold off to pay back debt, meaning you could lose your home and personal property. A few months after filing, your remaining debt will be discharged — although Chapter 7 typically won’t cover things like student loan debt or child support.
In a Chapter 13 filing, you get set up on a court-ordered repayment plan. Any remaining debt after a certain time has passed, like five years, might be discharged. This process means you’ll spend even longer paying off your debt, and you’ll also have a bankruptcy filing on your credit report.
Depending on the type of bankruptcy you file, a bankruptcy filing could stay on your credit report for up to 10 years, which is why it’s important to carefully weigh your options and your outstanding debt. Debt collectors can’t attempt to collect a debt that was discharged in bankruptcy, and they can’t continue collection activity while the bankruptcy case is pending — but the filing itself will have long-term effects on your financial health.
Why not paying off debt doesn’t work
Your credit report is a vital part of your financial well-being. Late or missed payments, defaults, collections and bankruptcies not only crush your credit score, but can also hurt your chances of taking out a loan or getting approved for a credit card.
Not paying your bills also puts you in a dangerous position with lenders. Avoiding payment means that creditors can sue you for unpaid bills. In some states, you could get your wages garnished or have your assets seized. Even if you aren’t making the payments directly, you’re still paying your outstanding debt.
Alternatives to bankruptcy
If you have the chance to avoid bankruptcy, you should take it. Here are some alternatives to consider.
Supplement your income: Whatever you need to do to start paying off your debt, do it now. Ask for a raise at work or move to a higher-paying job, if you can. Get a side-hustle. Start to sell valuable things, like furniture or expensive jewelry, to cover the outstanding debt.
Ask for assistance: Contact your lenders and creditors and ask about lowering your monthly payment, interest rate or both. For student loans, you might qualify for temporary relief with forbearance or deferment. For other types of debt, see what your lender or credit card issuer offers for hardship assistance. If you have the means, see if friends and family will help you.
Take out a debt consolidation loan: If you have many different types of debt, look into consolidation options. Taking out a debt consolidation loan is a way to simplify your finances — putting all of your debt in one place — and potentially pay less interest in the long run.
Get professional help: Reach out to a nonprofit credit counseling agency that can set up a debt management plan. You’ll pay the agency a set amount every month that goes toward each of your debts. The agency works to negotiate a lower bill or interest rate on your behalf and, in some cases, can get your debt canceled.
The bottom line
It can feel like it’ll take a lifetime to get out of a huge debt trap. You may skip payments, consider not paying at all or file for bankruptcy. While you might, in certain circumstances, get out of paying your outstanding debt, the likelihood is low. And more often than not, it’s harmful to your financial well-being to avoid paying your outstanding debt.
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