One of the biggest debts many young people face is student loan debt. This is becoming a major problem not just for young adults but for all of society. Instead of buying a home (and all the other purchases that come with it), young people are forced to live with their parents and pay off student loans. As a St. Charles bankruptcy lawyer, I know that there are not many options because these loans are not dischargeable in Chapter 7 (except in very specific circumstances). Fortunately, the government created student loan repayment programs to help young people deal with this debt.
The student loan repayment program was unveiled by President Obama is the Pay As You Earn program. This program caps student loan repayments at 10% of a young person’s disposable income. This helps a person who is working a job outside of their field or who is earning entry-level wages build their resume while starting their life. This is a good first step but unfortunately, many people will still be stuck with their loans.
This is because this repayment program is only eligible for people with Stafford and Direct PLUS Loans who are in good standing. Anyone with private student loans or who has defaulted on their loans will not be eligible for this program.
So what do you do if you don’t qualify for the Student Loan Repayment Program?
Many people come in thinking student loans can be discharged in bankruptcy. Unfortunately, this type of debt is not dischargeable and cannot be wiped away through Chapter 7 bankruptcy. A Chapter 13 bankruptcy, however, will give a person some time to get caught up on their loans and give a person some breathing room that can help get their life back on track.
While this debt cannot be discharged like other forms of debt (credit card debt, for example), a St. Charles student loan attorney can still provide some help to consumers looking to make a fresh start. Some of the positives include:
At the end of your student loan bankruptcy plan, you will then resume making payments as usual. But since these bankruptcies can last up to five years, you will have time to save up money and get your finances in order before making full payments again.
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If you have found that student loans are becoming too much to handle, an attorney at Westbrook Law Group can help. Together, we will work to give you the stress relief that a fresh start brings. To learn more about how a St. Charles student loan lawyer can help with your debt problems, contact Westbrook Law Group today for a free consultation.