Student Loan Debt Difficult To Discharge But Bankruptcy Still Helps
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Over 14 percent of young adults are unemployed with 500,000 college graduates defaulting on their student loans since 2008. That number is set to increase as our unemployment problem doesn't seem to have a quick fix on the horizon and current graduates are leaving school with just as many private loans as federal loans. Some analysts have told these debtors that filing bankruptcy isn't the smart move because it can be difficult if not impossible to discharge student loan debt. However, this is not a black and white area. Many students don't just graduate with student loans, they graduate with credit card debt and other types of bills which can be discharged in bankruptcy. So let's take a look at how bankruptcy may be able to help a student debtor.
Discharge Credit Card Debt In Bankruptcy
Students filing for bankruptcy with student loan debt may be able to discharge their credit card debt in bankruptcy. Many students are graduating with just as much credit card debt. Using bankruptcy to discharge those credit card debts can be helpful in freeing up income which can be dedicated to paying down school loans.
Discharge Other Unsecured Debt
Credit cards and student loans aren't the only types of debt bugging students. Many find themselves saddled with medical debt, personal loans, car loans and other types of debt not backed by the federal government. These other debts can be discharged in bankruptcy and take off a lot of financial pressure. This is why it's smart for students to not use their school loans to purchase vehicles, payoff credit card loans or to pay down medical debt, because those loans won't be dischargeable in bankruptcy even if they are used to pay off dischargeable debts.
Bankruptcy A Lifesaver During Unemployment
Even if a debtor is unemployed, they can use Chapter 7 bankruptcy to get a reprieve from private loans and may be able to force private student loan lenders to the negotiating table. In Chapter 7 bankruptcy, a debtor can protect certain assets from creditors while surrendering property such as a house or vehicle so they can get relief from secured debt. During the automatic stay, even student loan creditors cannot seize assets without requesting that the bankruptcy court grant them relief from the automatic stay. So even debtors with a large amount of student loan debt can find some relief in bankruptcy.
After the debtor receives a bankruptcy discharge, they will have more cash to devote to repaying their student loans and they will have the flexibility they need to begin rebuilding their credit history. It's important that debtors use their bankruptcy as an opportunity to get on a repayment plan with lenders or if they are unemployed to request a forbearance or hardship deferral.
Reed Allmand is constantly looking for ways to improve the financial situation of his Dallas Bankruptcy clients. You can visit http://www.allmandlaw.com to view more articles like this and find great tips on managing your financial situation.
Article Source: http://EzineArticles.com/?expert=Reed_Allmand
Article Source: http://EzineArticles.com/6473719
That this subject which we will talk about a very important topic because it will promote your Read this issue
Over 14 percent of young adults are unemployed with 500,000 college graduates defaulting on their student loans since 2008. That number is set to increase as our unemployment problem doesn't seem to have a quick fix on the horizon and current graduates are leaving school with just as many private loans as federal loans. Some analysts have told these debtors that filing bankruptcy isn't the smart move because it can be difficult if not impossible to discharge student loan debt. However, this is not a black and white area. Many students don't just graduate with student loans, they graduate with credit card debt and other types of bills which can be discharged in bankruptcy. So let's take a look at how bankruptcy may be able to help a student debtor.
Discharge Credit Card Debt In Bankruptcy
Students filing for bankruptcy with student loan debt may be able to discharge their credit card debt in bankruptcy. Many students are graduating with just as much credit card debt. Using bankruptcy to discharge those credit card debts can be helpful in freeing up income which can be dedicated to paying down school loans.
Discharge Other Unsecured Debt
Credit cards and student loans aren't the only types of debt bugging students. Many find themselves saddled with medical debt, personal loans, car loans and other types of debt not backed by the federal government. These other debts can be discharged in bankruptcy and take off a lot of financial pressure. This is why it's smart for students to not use their school loans to purchase vehicles, payoff credit card loans or to pay down medical debt, because those loans won't be dischargeable in bankruptcy even if they are used to pay off dischargeable debts.
Bankruptcy A Lifesaver During Unemployment
Even if a debtor is unemployed, they can use Chapter 7 bankruptcy to get a reprieve from private loans and may be able to force private student loan lenders to the negotiating table. In Chapter 7 bankruptcy, a debtor can protect certain assets from creditors while surrendering property such as a house or vehicle so they can get relief from secured debt. During the automatic stay, even student loan creditors cannot seize assets without requesting that the bankruptcy court grant them relief from the automatic stay. So even debtors with a large amount of student loan debt can find some relief in bankruptcy.
After the debtor receives a bankruptcy discharge, they will have more cash to devote to repaying their student loans and they will have the flexibility they need to begin rebuilding their credit history. It's important that debtors use their bankruptcy as an opportunity to get on a repayment plan with lenders or if they are unemployed to request a forbearance or hardship deferral.
Reed Allmand is constantly looking for ways to improve the financial situation of his Dallas Bankruptcy clients. You can visit http://www.allmandlaw.com to view more articles like this and find great tips on managing your financial situation.
Article Source: http://EzineArticles.com/?expert=Reed_Allmand
Article Source: http://EzineArticles.com/6473719
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