Is $30,000 or More in Student Loans Dragging You Down?
Susan M Signer Services
Bankruptcy Services, Legal Forms, Debt Relief Agency
If you are a recent college graduate who borrowed money for college, the answer is more than likely “yes.” Does this sound familiar? The economy tanked and you decided that it would be a perfect time to obtain that degree you have put off for several years. You’ve always dreamed of being a dentist, a doctor or lawyer.
You filled out the Free Application for Federal Student Aid (FAFSA) form each year and borrowed the maximum loan amount to cover your monthly housing expenses, food, and education. You finally graduate and you come to the startling revelation that you’re $30,000 or more in-debt!
You’re not alone. In fact, pursuant to CNN Money, the median graduate student loan debt has increased 43% over the last eight years from $40,200 to $57,600. Overall, student loans total over 1 Trillion Dollars! Also, you’re not the only college student who relied upon student loans to subjugate the tidal wave of a recession. There were approximately 1.7 M graduate students who utilized the same approach as you may have to survive in this economy.
ASSESS YOUR FINANCIAL STATUS
Don’t panic. You’ve obtained your degree so you did something right. Now it’s time to address your financial status. First, sit down and do your budget. Do you have the ability to pay any amount to repay your student loans? If you do, please ensure that you pay your student loans in a timely fashion and continue to do so until paid in full.
What if you’re still unemployed or you’re still at minimum wage working at a job that you are unable to utilize your college degree? There are several programs available which are beyond the scope of this article. The following are two viable options for you to consider.
If for some reason you're unable to pay the minimum payment, you may be eligible under the Federal Income-Based Repayment Plan. The Federal Income-Based Repayment Plan is available to individuals who have had partial financial hardship which amounts to your loan payments exceeding 15% of your discretionary income. Check out how you may benefit from the Federal Student Loan income-based loan repayment program.
ADVERSARY PROCEEDING OR FILING CHAPTER 7 BANKRUPTCY
If for some reason you're unable to make any payments and making the payments would cause you undue hardship, then filing either an adversary proceeding or bankruptcy may be an option.
It's a difficult task to prove undue hardship to a bankruptcy judge but not impossible. The bankruptcy judge’s decision may be based upon your current financial and projected financial status for the next 25 years. The bankruptcy judge may discharge some or all of your student loans. Keep in mind, there is no guarantee for any or all of your student loans to be discharged in a Chapter 7 bankruptcy or adversary proceeding.
After long consideration and analysis of your financial status you may determine that you do need to file for Chapter 7 bankruptcy, you’re not alone. Chapter 7 bankruptcy is available to certain individuals to discharge other debts including requesting for discharge of student loans due to undue hardship. To learn more about bankruptcy review our bankruptcy tab.
Hope this helps you with dealing with your student loan debt. If you have any questions about other possible options you may have for student loans please call Susan M Signer at 386.898.5015 or visit our website Susan M Services website.
This article is provided for educational purposes only and is not intended to provide legal advice.
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