The high cost of education coupled with a long-stagnant job market has left many college and trade school grads with a pile of insurmountable debt.
New data released by the U.S. Department of Education reveals that numerous students have defaulted or failed to pay back their student loans. In fact, at more than 1,000 colleges and trade schools across the country, at least half the students have not made a payment within seven years or have defaulted altogether.
Some borrowers wind up defaulting on their student loans when they do not take the steps to get a forbearance while they are unemployed or underemployed, while others may not have the option. Even those who do work out an arrangement with their lenders see their debt grow because the interest meter continues to run in many cases.
The reality is that food, housing, transportation and other essential expenses often take priority over other debts. Understandably, student loan payments often take a back seat when finances are tight.
However, at some point, many borrowers seek options to tackle their debt problem in order to stop creditor harassment, protect their property from creditors, or to improve their credit so that they can move forward. In many cases bankruptcy protection might be a solution.
While typically a student loan is not forgivable in bankruptcy, many other debts are. Individuals and couples eligible for bankruptcy protection may be able to redirect funds from forgiven debts to pay down their student loan while continuing to make payments on their home and vehicle free from the threat of creditors.
If you are wondering what chapter 7 bankruptcy or chapter 13 bankruptcy protection can offer you, it is important to get the information you need. Contact the Law Offices of Charles E. Covey to discuss your options so that you can decide if bankruptcy is right for you.