Many people in Orlando have a lot of trouble paying their student loans, which casts a long shadow over their financial plans. Student loans are infamously hard to get rid of through bankruptcy, unlike other types of debt.
This article will talk about the problems with student loan debt and the limited bankruptcy options that borrowers have. Companies like Benenati Law Firm can help people who are having a hard time with this huge financial problem, so schedule a consultation today.
Student loan debt is a huge burden.
In the United States, student loan debt has grown into a big money problem. The overall amount of student loan debt in the U.S. has gone over $1.7 trillion, and millions of people are having a hard time paying it back. These kinds of problems can make it hard to pay things like rent, have a family, and save for retirement.
Why is discharging student loan debt in bankruptcy difficult?
People can get rid of or restructure their bills through bankruptcy, which is a legal process. However, student loans usually can not be forgiven when you file for bankruptcy. This means that people who have student loans can not just file for bankruptcy and get rid of them.
This rule can be broken in one case: a person can get rid of their student loan debt in bankruptcy if they can show that paying them back would be “undue hardship.” It is very hard to meet this standard.
Borrowers have to show that they have tried their best to pay back their loans but are unable to do so because of their current situation. Usually, they have to show that they have been having a long-term money problem that is likely to last.
Read also: The Application Process for Quick Loans: A Step-by-Step Guide
Chapter 7 vs. Chapter 13 bankruptcy.
Chapter 7 and Chapter 13 are the two main types of bankruptcy for people. When someone files for Chapter 7 bankruptcy, their assets are sold to pay back their creditors. Chapter 7 bankruptcy, on the other hand, does not get rid of most student debt.
In Chapter 13 bankruptcy, which is also called reorganization bankruptcy, the debtor makes a plan to pay back their bills over three to five years. Chapter 13 bankruptcy can help people deal with their student loan debt, but it does not get rid of the debt itself.
Some alternatives to filing for bankruptcy.
Before you file for bankruptcy, you might want to think about these other options if you are having trouble paying back your student loans. Some of these are:
- Income-driven payback plans.
With these plans, your monthly loan payment is based on a certain amount of your extra cash flow. If you are having trouble paying your bills, this can help you pay off your loans more quickly.
- Deferment and forbearance.
These options let you put off your loan payments for a short time. During these times, however, interest will still be added to your payments.
- Loan consolidation.
If you have more than one student loan, you can combine them into one loan with a lower interest rate. This could make it easier for you to pay back your debt and save you money on interest.
Consider getting the help of a bankruptcy attorney.
It is important to talk to a bankruptcy lawyer if you are thinking about filing for bankruptcy. A lawyer can tell you what your choices are and help you decide if bankruptcy is the best option for you. They can also help you get through the complicated process of bankruptcy.
A lot of people have trouble paying their student loans, but bankruptcy is not always the best way out. If it is hard for you to pay back your student loans, you might want to look into some of these other options.
You should talk to a bankruptcy lawyer about your choices and figure out what the best thing to do is for your specific situation.
