It’s a topic that has been showing up over the last couple of years and appears to be gaining steam. Student Loan debt loads may be hurting the economy.
As a generation graduates with higher student loan debts than any before it, economic data is starting to show these young people are having increasingly difficult times paying back their student loans or contributing to the economy through car or home purchases.
Forbes- February 2012: Student Debt the Next Financial Crisis?
Washington Post February 2014: Student Debt May Hurt Housing Recovery
New York Times – May 2014: How Student Debt May Be Stunting the Economy
Just last week, President Obama issued an executive order designed to provide help to approximately 5 million student loan borrowers.
We have been seeing it for a while.
As bankruptcy attorneys in Kansas City, we get phone calls from potential clients seeking information about their bankruptcy options with crushing student loan debts. These are individuals or young families that have been unable to find jobs that provide a high enough income to make the monthly student loan payment while also covering their basic living expenses. They have already explored options such as forbearance and deferment and are at their last hope: bankruptcy.
In most situations student loan debts are non-dischargeable, meaning they cannot be wiped out in a bankruptcy. However, it is not impossible. Here is one example where we helped a debtor crippled by more than $400,000 in student loans reached an agreement in the bankruptcy court to potentially reduce the student loan debt by over $250,000.
If you are facing financial problems from crushing student loan debt, we may be able to help you. It will depend on each individual situation, but our Kansas City bankruptcy attorneys will explore every bankruptcy option with you. Call us for a free phone consultation.