Student Loans and the Bankruptcy Attorney

There are some debts that a bankruptcy attorney can help a client with and some that can’t be altered. Due to the current economic climate in the nation and around the globe, many individuals have found themselves in dire financial situations. Some of the situations that have toppled people into the sea of red ink include health catastrophes, job losses, marriage woes, unbridled credit card debt and upside down mortgages. And if all of those reasons weren’t enough, many people have also gotten buried in astronomical student loan balances. While a legal restructuring can help alleviate most debts, not much can be done about a crushing load of student loans.

Colleges and universities cost hefty sums of money in terms of tuition, books, housing, and living expenses. Many people have no choice but to borrow the money to pay for all of these items. Some individuals saved for education before attending; others have a spouse or parent willing to foot the bill but a substantial number of people don’t fall into that category. If a person is low income, he or she may be able to qualify for subsidized loans. This means that interest does not start to accrue until six months after a person graduates. Otherwise, the loan will be considered unsubsidized and interest begins to accrue immediately even if payments don’t start until six months post-graduation. Extremely fortunate students are able to receive grants and scholarships to help cover tuition bills.

When a person is attending college, he or she may feel that taking out the maximum amount offered is a good idea. Those repayments seem so far off, after all. But, students should beware. It isn’t long before the coupon booklet arrives in the mail and the lender is ready to be paid back. Some debt balances eventually total up into ranges similar to mortgages. This isn’t a great way to begin one’s life post-academia.

If the cash has been borrowed and paying it back will create an extreme burden, a person cannot wipe this away with bankruptcy. Mortgages, credit card balances, hospital bills and overdue utility bills can be forgiven, but student loan debt is forever. Some temporary fixes include continuing to attend college classes in order to push the “payment due” date further into the future or appealing for a hardship status in order to reduce payment amounts. If a person works in a social service occupation for ten years, their balances may be forgiven if all payments have been made up to that point.

If a person has a crushing debt burden and needs to contact a bankruptcy attorney, he or she may be able to reduce some payments and regain some balance. Wiping one’s economic slate partially clean may reduce a person’s stress and anxiety enough for him or her to be able to tackle the college expense repayment. A legal representative can take a look at an individual’s budget, bills and financials in order to offer advice regarding the best course of action. Even though university expense repayments may seem overwhelming, the picture can be brightened with a bit of restructuring.