The basics of student loan debt and bankruptcy
Some people go to college or a trade school right after they
complete their high school education. Others may wait till later in
life, when they decide to pursue new careers. Most of these
individuals will need financial assistance to attend these
institutions, and have to take out student loans to pay the
significant costs associated with a higher education.
When these students graduate, they will be expected to begin
making payments on these student loans, whether they are employed
or not. If the students are struggling to find work, these payments
can quickly lead to serious financial problems, leaving them with
very few options to
eliminate student loan debt.
Many companies advertise their services to assist students in
dealing with this type of debt. They tell the students exactly what
they want to hear, and make promises concerning the amount of money
that they will have to pay back. The students spend large sums of
money on these companies, only to find out that their debts are not
getting paid. In fact, little work is being done on their behalf,
and the debt has only increased.
Some individuals may think of filing for bankruptcy, but, in
most situations it may not remove the outstanding student loan
debt. This type of debt is only permitted to be discharged in
bankruptcy in cases of undue hardship, a very high standard.
However, filing for bankruptcy does provide these debtors with
the time they need to get their finances back on track. The
bankruptcy stops any collections that may be happening, and also
allows the individuals to deal with other debts that they may have
accumulated while experiencing these financial problems. This can
help the borrowers become current on their payments, and stay
caught up in the future.
You need to take immediate action as soon as you first start
having problems paying your bills. If you let past-due amounts
continue to go unpaid, you will only make a difficult situation
much, much worse. Interest on these amounts will increase, and your
creditors may even begin pursuing collections actions.
An experienced bankruptcy attorney can help you sort through the
options that are available to you. It is likely that you are unsure
of what is best for you, and an attorney will be able to carefully
review the facts to learn more about your financial situation.
If you decide to file for bankruptcy, your attorney can help you
create a plan that will protect your interests. Once you know the
steps you need to take, you can pursue a more promising financial