Chapter 13 bankruptcy may ease some of your student loan debt burden

The need to file for bankruptcy, whether Chapter 7 or Chapter 13, affects nearly a million individuals in the US each year. And while financial problems can be caused for a multitude of reasons, in most cases the true issue points to something unexpected—a major and usually extremely unfortunate event—that came about and sent your own personal economy tumbling down. And while medical debts usually top the list—along with unemployment or loss of hours, personal crises like separation and divorce, and more—student loans are capable today of crushing the average household budget.

Over 45 million borrowers struggle with nearly $1.6 trillion in student loan debt, and such debts are rarely discharged in bankruptcy. This is extremely frustrating to many citizens in the US who see a huge flaw in the system, but the problem can be especially devastating to debtors who may be watching their lives unfold in a much different way than they envisioned upon taking out massive loans for education. To experience such financial demise while trying to pay off student loans at all cost is often a terrible irony to those who cannot find their way back to financial health (and peace of mind) without filing for bankruptcy.

If you are in such a predicament, you may be considering filing for Chapter 13 to re-organize your finances enough to pay off creditors and still be able to pay your basic bills at the same time. The interesting feature about Chapter 13—and one of the greatest benefits—is that while there are many debts that are not dischargeable, they can be restructured enough so that your monthly payments may be considerably smaller==making it possible for you to pay them off, and to realistically keep up with a set budget. The automatic stay can stop collections against you for student loan debt while giving you time and ability to handle your other debts. You may also be able to pay a portion of the student loans in a Chapter 13 case. You probably have many questions about bankruptcy, from wondering how much you will have to sacrifice (very little in most cases), to whether you will have to go to court. Pre-planning may be in order also if you have a tax refund on the way or other assets that must be protected. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.