One of the biggest debts facing many Americans today is student loan debt. For some, it is even more expensive than a house payment with insurance and taxes included. For others, it is the very thing causing them to be unable to pay other bills. Being in default on a student loan can be a horrible thing for your credit.
To make matters worse, it also means that you may have to start the forgiveness process over since the months that you default do not apply to any of the student loan forgiveness timelines. Here, you can learn both how student loans are handled during bankruptcy and how bankruptcy might help you manage them better.
Can You File Bankruptcy on Student Loans?
Generally speaking, you cannot normally include student loans in your bankruptcy any more than you can your taxes. However, there are always extenuating circumstances. When you are in default, you may not qualify for income-based repayment plans, so you are still dealing with a full bill every month.
If you have student loans, you might feel like your situation is hopeless and you’re doomed to struggle until they are paid in full. However, you may have other options. You may be able to prove that your student loan payments place an undue burden on you that you are unable to meet and will be unable to meet for the foreseeable future. If you are unable to pay for basic living expenses because of your student loans, our lawyers can help. You can read more about student loans and bankruptcy here.
How Bankruptcy Helps Manage Finances
Bankruptcy can help in two ways. First, it demonstrates that you are unable to meet your current debts to the extent that you are willing to go through the legal process of having them dismissed. If you cannot get your student loans dismissed, filing bankruptcy can help you free up some of your income so you can get back on track and pay off your student loans in a timely manner. Second, after your bankruptcy is discharged, you can immediately start building up a positive credit history again.
Get Out from Under Your Debt
Student loan debt can be the heaviest of burdens. Even if you can’t file bankruptcy on these loans, it does not mean that your student loans and future credit cannot benefit from the discharge of old debts. There are a number of benefits that come with bankruptcy, especially if your overall debt is becoming too difficult to manage. Bankruptcy can give you a clean slate and allow you to start rebuilding your credit right away.
Don’t forget to share this post online if you think it might help someone deal with his or her student loans or bankruptcy.