Student Loans and Bankruptcy: 3 Things You Need to Know
There are many reasons couples and individual adults choose to declare bankruptcy. In fact, bankruptcy can help offer you a fresh start. Did you know that not all of your debts will be erased when you file for bankruptcy? You’ll typically still be responsible for paying student loans.
Are you struggling to pay your bills? Do you have student loans? Are you wondering whether filing for bankruptcy is right for you? Each year, thousands of people file for bankruptcy. For many consumers, this provides a way to break free from debt and begin moving forward with their lives. Filing for bankruptcy provides a way to stop wondering which bills you will pay and to stop feeling constantly stressed because of financial pressure. It’s important to understand that while filing for bankruptcy does offer many benefits, it’s not for everyone. There are some drawbacks to filing for bankruptcy, as well. Here’s what you need to know.
1. Bankruptcy can give you a fresh start
Whether you have credit card debt, unpaid medical bills, or a combination of different types of debt, you may feel like there’s no way out. The reality is that sometimes everyone needs a little help. In some cases, bankruptcy can provide you with a way to get a fresh start. There are different types of bankruptcy. In some cases, your debt will be erased. In other cases, your debt will be restructured and you may simply owe less than you did before.
2. You will usually still be responsible for paying your student loans
Most of the time, student loan debt must still be paid even when you file for bankruptcy. Understand, however, that nothing is set in stone. Talk with your lawyer about whether you may be eligible to have your student loan debt forgiven. If you can prove that being forced to pay your debt will cause an undue hardship for you and your dependents, you may be able to have your student loans forgiven.
3. Talking with your lender can help
Filing for bankruptcy does have a downside. It will significantly impact your credit for seven years. In fact, filing for bankruptcy can make it difficult to obtain a loan or a credit card. If you plan to buy a home in the future, you may prefer to avoid filing for bankruptcy altogether. One way to avoid this is to reach out to your lenders. Did you know that some lenders have debt repayment plans that can be modified? Let your student loan company know that you are struggling to pay your bills and find out if they have any options for you when it comes to repayment. They may be able to offer you a reduced rate or lower monthly payments.
Get started today when you call to schedule a meeting with your attorney. They’ll answer your questions and discuss your personal situation to find out if bankruptcy is the right choice for you.