Should you file for bankruptcy? Here’s what you need to know about student loans and filing.
If you feel like you’re drowning in debt, it may be time to consider filing for bankruptcy. The right bankruptcy attorney can help you start moving forward. Here’s what you need to know.
Facing debt can be an overwhelming experience. It’s easy to feel like you’re drowning when you have medical bills, credit card debt, or student loan payments to make. While filing for bankruptcy is one way you can seek a fresh start, it’s important to remember that filing for bankruptcy won’t automatically erase all of your debt. In fact, student loans are one of the few types of debt that generally cannot be erased. According to Time magazine, more than 44 million Americans currently hold student loan debt, which makes it one of the most common forms of debt in the United States. Thinking about filing? Here’s what you need to know.
First off, it’s important to understand exactly what you owe and to whom. Do you have multiple credit cards? Medical bills? Student loans? Gather all of your financial documents to determine how much money you owe, how much you owe to each lender, what your income is, and what your monthly payments are to each lender. Gathering this information is one of the first steps you should take in order to begin considering whether bankruptcy is the right choice for you. If you aren’t sure how much you owe to a specific lender, you can reach out and ask for a recent billing statement.
In some cases, consolidating your payments may be an alternative to filing for bankruptcy. Once you understand how much you owe and to whom, you’ll have a better idea of whether consolidation would be a good option. In some cases, lenders may be willing to work with you when it comes to paying back your debt, as well. For example, some lenders will be willing to offer you reduced payments and even write off a portion of your debt; however, not all lenders provide this option to customers. Consider reaching out to lenders, especially hospitals and medical billing facilities, to discuss whether debt forgiveness or reduced payments are an option for you.
It’s also important to realize that in most cases, student loans will not be forgiven even if you file for bankruptcy. While bankruptcy will enable you to begin rebuilding your finances, you will generally still be responsible for paying back loans. Take this into consideration when you’re filing. For example, if student loan debt is your primary financial obligation, bankruptcy might not be a good choice. If most of your debt is consumer debt, however, you may discover that filing for bankruptcy provides you with more financial flexibility to do things like pay off those loans.
Anytime you have questions about student loan debt and bankruptcy, it’s important that you meet with an experienced bankruptcy attorney. This is because an experienced attorney understands the ins and outs of filing for bankruptcy. Your lawyer can talk with you about whether filing for bankruptcy is right for you. Additionally, your lawyer can discuss which type of bankruptcy might be the best bet.
Don’t wait. When you have questions about filing for bankruptcy and reclaiming your life, call to schedule an appointment.