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Declaring Bankruptcy With Student Loans |
By:
Paul McDermott |
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Declaring Bankruptcy with Student Loans
by Paul McDermott
If you are carrying a large student loan and are finding it hard to keep up with your payments, you may be wondering what options you have. You might even be considering filing for bankruptcy as a way to get a fresh start. When it comes to bankruptcy and student loans, is this a viable option?
In the case of bankruptcy and student loans, the situation is a bit more complicated than with other types of debt. If you have a government-sponsored student loan or one issued by a non-profit agency, then filing for bankruptcy is not the answer. These types of loans are not discharged by declaring bankruptcy. You would still be responsible for paying back the entire amount, even if other debts were discharged.
There is a place for bankruptcy and student loans, but its quite difficult to satisfy the requirements for having your debt discharged in this manner. The borrower would have to prove that he or she is unable to keep up with the agreed-upon payment schedule. In addition, he or she would have to demonstrate that an effort to pay was made and that the individual's financial situation is permanent. In the event that there is no hope that the persons financial situation will improve in the future so that payments can be made on the outstanding loan, the Court may consider bankruptcy and student loans. As you can see, this would be a pretty difficult condition to prove.
Is there anything else you can consider other than declaring bankruptcy? Probably the most important thing you should do is to contact your lenders and tell them you are having trouble making your payments. This will begin the process of getting you out of the financial situation you are in. I know it is hard to do this. You feel guilty or you are afraid of what they will say or do. Or you are still in denial that there is a problem that needs your attention. But if you go into default on your loan, your options for fixing your situation get worse. Don't forget, lenders want their money, so they every reason to try to help you. It is only when you stop making payments and avoid their calls that people start to get less curteous and helpful.
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Article Source: http://www.statssheet.com/articles/article54197.html |
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