Do you find yourself overwhelmed by how much you owe in student loans? You may be like the many Tennessee college graduates who left school and entered the real world, only to find themselves dealing with an enormous amount of debt within a few months of graduation. This can be an impossible burden, especially when dealing with brand new financial responsibilities and other types of debt.
Student loan debt is a pressing concern for thousands of recent graduates who simply cannot keep with the payments. Bankruptcy does not allow for the discharge of this type of debt; however, this option may still be beneficial for certain individuals who are behind on their student loan payments.
How can bankruptcy help me with my student loans?
Bankruptcy protection allows for the discharge of certain debts, completely releasing the debtor holder from liability. This is good news for people who are behind on mortgages, car payments, credit card bills, medical bills and more, but not student loans. Yet, while U.S. bankruptcy laws do not specifically address student loans, there are options available that may allow you to regain control of your financial situation. Here is how:
· Chapter 7: Chapter 7 bankruptcy, sometimes called liquidation bankruptcy, is usually complete within a few months. This option addresses unsecured debts, such as credit card bills and medical debt. By completing Chapter 7 bankruptcy, a person may be more able to effectively address other balances, such as student loans. In very rare cases, it may be possible to obtain a hardship discharge.
· Chapter 13: Chapter 13 bankruptcy is typically the best option for individuals who are not eligible for Chapter 7. This process takes longer to complete, typically three to five years. While an applicant cannot discharge student loans, that person could receive protection from those creditors while under Chapter 13. With other debts consolidated and discharged through bankruptcy, it may be easier to manage student loans.
By dealing with other types of debt in an effective and organized manner through bankruptcy, you may be able to catch up and secure a financial future free from creditor harassment and stress over missed payments. You may not be able to discharge student loans through bankruptcy, but you may benefit from a full understanding of how this legal option can benefit you.