Student Loans

Instead of paying your credit cards and other unsecured debts, you may be better off eliminating those debts in a Chapter 7 or Chapter 13 bankruptcy and use your money to pay student loans. Student loans cannot be discharged, except in limited circumstances. It is important that you talk to an experienced bankruptcy lawyer about your options.

How would a Chapter 13 plan help you repay your student loans? In a chapter 13 case you may pay pennies on the dollar to your other unsecured creditors over a period of 3 to 5 years. Unlike other unsecured debts which can be eliminated entirely, student loans are rarely discharged. However, you will have the advantage of deferring full monthly payments during the term of your Chapter 13 plan and get relief from aggressive collection attempts by your lenders.

If you have federal student loans, you may have several payment options. Your bankruptcy attorney can advise you about graduated and extended repayment plans, income based and income contingent repayment plans and loan forgiveness based on public service or disability.

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