U.S. News & World Report recently posted an article on people who are struggling to pay back student loans; when faced with defaulting on loans and potentially getting hit with wage garnishment and other harsh debt collection measures, they’re turning in desperation to unscrupulous debt relief companies. Many of those companies charge money for services that can be obtained for free from the US government.B People already in debt find themselves losing even more money and receiving misleading advice on debt consolidation or repayment, all because of the desperation felt when struggling with loans that seem too huge to pay off.
You don’t need to turn to shady debt relief companies for help. If you’re struggling with student loan debt, there are different options for repaying loans. The possibilities include legitimate repayment plans and debt consolidation options. Another option is to apply to have the loan deferred. Unemployment, military or Peace corps service, and enrollment in graduate school are all circumstances that could increase your chances of getting a loan deferred, though the outcome isn’t guaranteed.
Other times, people find themselves in serious financial straits and need to file for bankruptcy.B Unfortunately, student loans don’t get automatically discharged during bankruptcy. In most cases, your student loans would need to be repaid after a Chapter 7 bankruptcy. A Chapter 13 bankruptcy could help you manage your student loan payments by reducing the amount you’d have to pay each month or by delaying the payments for a few years; however, the obligation to pay back the loans would still exist. If you enlist the services of an expert bankruptcy attorney, you’ll be more likely to get favorable terms for loan repayment as you go through the bankruptcy process.
A good attorney will also help you if you’re eligible for the one exception that would allow you to discharge your loans via bankruptcy; this is the ‘undue hardship’ exception. If you can prove in court that you’ve made a sincere effort to repay your student loans, but you’re facing extreme economic hardship that’s likely to persist in the foreseeable future and that makes it difficult for you to meet basic living standards for yourself and your dependents, you could be eligible for this exception.
In some jurisdictions, you’d have to meet more stringent standards for ‘undue hardship’ than in others. Another point to consider is that courts sometimes allow for a partial discharge of loans, so that even if your loans don’t get fully discharged you’ll still get some relief from your financial burdens. With expert legal assistance, you’ll be more likely to present your case convincingly and get the best possible outcome.
If you’re struggling to repay your student loans, don’t turn to shady debt relief companies. Figure out your options as well in advance as possible and seek legal advice, especially if you’re facing bankruptcy. Don’t hesitate to contact us to discuss your situation. We’ll carefully go over your situation and fight for you to get the best terms when filing for bankruptcy.