Month: February 2011

Charlie Needs Counsel

General, Legal Profession

I rarely watch TV, however, I have watched Two and a Half Men a few times and I think it’s a great show. It makes me laugh, and I can forget about the law school mistake when I tune in. That being said, no way would I want to represent train wreck Charlie Sheen in his lawsuit against CBS.

Sheen is talented, but no matter how talented, he doesn’t realize that acting is not real work. Going to school for 7 years and having to use your brain doing tedious crap is work. Hanging out on a TV set acting with beautiful people and getting paid TWO MILLION dollars a week not only isn’t work, it’s hitting the lottery every week. And Sheen threw it all away because he couldn’t keep his mouth shut.

Sheen claims that he is no longer an addict / alcoholic because he passed a drug test which showed no drugs or booze were taken for 72 hours. He wants CBS to both apologize and “lick his feet.” Oh, and he wants a raise to THREE MILLION an episode. He made a lame attempt to apologize about his anit-semetic remarks about his former boss.

If he were my client, and I thank god he is not, I’d tell him that if someone is paying you two million dollars a week, you lick their feet, and you don’t insult them. You take the check they give you and thank them for it. Especially since you didn’t even graduate from high school and combined with all the drugs you’ve done, that means you probably can’t even read the check CBS gave you.

I think the best rehab for this overpaid fool clown troll would be to work a real job for a year, or hey, let’s see if he could do it for 72 hours.

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The Liz Repayment Plan

General, Legal Aspects

In the comments of the post above, Liz discusses how she beats the system with her repayment plan. Liz sent in a detailed explanation of the how her repayment plan works. Here it is:

The rules on student loans ARE different from most other consumer debt – the banks compound the interest daily, based on the total principal FOR THAT DAY.

And when the debtor makes the monthly payment, the banks can apply the payment FIRST to interest, based on the NUMBER OF DAYS since the last payment. The thing is, that proportion changes every month, which affects your principal outstanding, which in turn affects your daily interest charge.

So say your bill is due the 8th of the month, and you make your payment on the 3rd one month, but the 6th the next month. They’ll calculate the portion of your payment that goes to interest based on 33 days (in a 30-day month), and whatever the total principal is the day the payment is applied. Whatever is left over after covering 33 days of interest will be applied to principal. So you’re paying a little less in principal some months. And they’re calculating your daily interest based on the higher principal. So the next month maybe a little more goes to principal, but not necessarily enough to make up the difference in carrying a higher daily balance on a six-figure loan. Get it?

It’s not like other loans I’ve had, where I just make the payment and the same amount goes to interest every month. With this calculation, the debtor can never pay more than 365 days of interest a month, butthe debtor CAN pay interest calculated on a higher principal several times during the year. And the slightly larger portion of some payments going to principal a few months per year will NOT make up the difference.

That’s why the loans keep going up even for students keep making the payments. You actually have to pay extra every month just to keep the loan from growing, because they’re calculating your interest based on the principal outstanding EVERY DAY. And some months you’re not lowering principal as much as others. Subtract a few annual fees from your payments, including, ironically, “default insurance,” and you have a loan that will just never go away, even for a responsible borrower who makes every single payment.

Anyway, I have no problem paying my debts. I borrowed the money expecting to pay it back. But I do think this system of calculating interest is about as messed up as everything else about the legal instruction industry right now.

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Student Loan Justice Info

General, Law School

For those of you who have not visited the site Student Loan Justice, please take a moment and do so. There has been a lot of interest lately in defaulting, and you should know how the loan companies and Uncle Sam can screw you before you do so. This is from Student Loan Justice:

Congress removed bankruptcy protections, refinancing rights, statutes of limitations, truth in lending requirements, fair debt collection practice requirements (for state agencies) and even removed state usury laws from applicability to federally guaranteed student loans. Congress also gave unprecedented powers of collection to the industry, including wage, tax return, Social Security, and Disability income garnishment, suspension of state issued professional licenses, termination from public employment, and other unprecedented collection tools that are used against borrowers for the purpose of collecting defaulted student loan debt.

Concurrently, Congress established a fee system for defaulted loans that allows the holders of defaulted loans to keep 20% of all payments from borrowers before any portion of the payment is applied to principal and interest on the loan. In the absence of fundamental consumer protections, the defaulted borrowers’ only available recourse is to submit to a hugely expensive “loan rehabilitation” process whereby they are forced to make extended payments (which are almost never applied to the principal or interest on the loan), and then sign for a new loan to which additional fees are attached. This effectively obligates the borrower to a much larger debt than when the loan defaulted, often double, triple, or even more than the original loan amount.

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NY Toilet Cuts Enrollment

General, Legal Aspects

Albany Law School, a fourth tier New York toilet, is cutting its enrollment by 10 students to 240. Well, it’s a start, but unfortunately they should be cutting it by 250. There’s no reason for fourth tier law schools to be open, no law firm is going to hire from them in this economy. Fourth tier jobs went to India a couple of years ago.

The exciting news was that law school applications were down 20 percent this year, and that means that not only has the word gotten out, OLs are actually listening and making wise decisions not to go. The law school scam is starting to suffer losses, and that makes me very happy indeed.

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