"To File Bankruptcy On Student Loans - Or Not?!"
Should you file bankruptcy on student
loans? Well student loans can be hard to pay back.
Besides them you have a mountain of other bills to pay, so filing bankruptcy on student loans can be very tempting. However let’s
see what you can gain and what you can loose.
•Bad credit ratings.
•Wage garnishment.
•IRS penalties.
•If you fail to pay back your student loans attaining licenses in some fields will be impossible.
•One day your small business company can be excluded from government contracts.
•You should be aware that while most debts like credit card debt or installment loan can be wiped clean by filing for Chapter 7, student loans
can not. A legislation was passed a few years ago making it impossible for any education loan to be wiped clean by bankruptcy.
What that means is that your loan could still be waiting for you even if your bankruptcy petition has been approved. It will wait silently for
your bankruptcy to be discharged and then you will have to pay it back along with interest for the years of waiting.
Be aware that since you have filed for bankruptcy the creditors have no right to pester you with
bills, but also don’t be under false assumption that your loan has somehow disappeared.
So what is the alternative to filing bankruptcy on student loans?
Thankfully today you have numerous options for lowering your student loan bills. The payment difference can mean that you’ll be able to buy a
home and focus on your career instead of drowning in debt and paying back many student loans.
•Debt consolidation should be #1 on your list. Student debt consolidation can merge your multiple debts in just one lower interest debt. Student
loan debt consolidation also helps you to avoid dealing with shady creditors. Try to apply for federal debt consolidation loans, as it means
lower interest rates, if you are denied then apply with private lenders.
•#2 is to contact your lender and discus your financial troubles, very often lenders have other options for paying them back. They might differ
your student loans if you are having a short term financial troubles. However if you expect your problems to long term your lender might propose
a different pay back schedule.
Filing bankruptcy on student loans should be your last option, if that is your only financial
problem. And even if you do decide to go through with it, you should contact your creditors and try to come up with alternative payment plan.
Debt consolidation is much better option then to have your student loan gathering interest while you wait for your bankruptcy to be
discharged.
Whatever you do make sure to examine all your options carefully, it is prudent to consult a
bankruptcy lawyer or a debt counselor (contact them both) before you decide to file bankruptcy on student loans and ask about your
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