Student Loans and Chapter 13 Bankruptcy

Student Loans and Chapter 13 Bankruptcy

Many people dream of getting a college education and then using that education to become financially successful. It is very difficult to reach the middle or upper class without a strong education and a good job. The downside for many who graduate from college is that they have to take out several student loans in order to pay for their education. However, for many people who finish college, the dream of a great-paying job never materializes after they graduate. That often creates a big problem with so many graduates finishing school with significant student loan debt.

Student loan debt is just one more reason many people end up choosing to file for bankruptcy. However, when a person files for bankruptcy he or she cannot discharge his or her student loan debt. On the other hand, student loan debt can be reorganized through Chapter 13 bankruptcy. By filing Chapter 13 people can greatly reduce the amount of their monthly payment, which means the payment becomes a lot more manageable. The downside though is that after five years, those reduced payments end and the payments go back to their original amount.

Another option that some people with student loan debt have is to make a lump sum settlement, but this not a common practice. In this option, the debtor makes one large lump sum payment to settle the debt, instead of several small monthly payments. Meanwhile, as more and more people attend college and take out student loans the number of people who have to file for bankruptcy also increases because they can’t pay off that debt. This is especially true for those who use private student loans instead of federal loans.

This can be a very difficult situation to be in. The very reason most people go to college is so they can have a good paying job and avoid the perils of debt. If you are currently facing overwhelming student loans and/or other forms of large debt then you might want to speak with an experienced Merrillville bankruptcy attorney. At the Whitten & Whitten we can help you get through the Chapter 13 process. We know you have a lot of questions and concerns and we are here to assist you. Please contact us today at 219-756-0555, or click here.