If you’re a resident of South Carolina and you’re struggling with student loan debt, you may be feeling overwhelmed and unsure of what to do. As a bankruptcy attorney in the state, I understand the challenges that come with dealing with student loan debt, and I want to help you understand your options.
One of the first things to understand is that student loan debt is generally not dischargeable or cancelled in bankruptcy. This means that if you file for bankruptcy, you will still be responsible for paying off your student loans. However, this doesn’t mean that bankruptcy is off the table entirely. In some cases, bankruptcy can provide relief from other forms of debt, such as credit card debt or medical bills, which can free up more money to put towards your student loans. In addition, Chapter 13 bankruptcy can help a debtor have a three to five year reprieve from having to pay student loans. Please note that the individual would still be responsible for the student loan debt after the Chapter 13 is discharged or dismissed. However a Chapter 13 could allow time for a person to not have to pay the student loan debt over this period of time.
A common question we are often asked is if private student loans are cancelled or discharge by bankruptcy? The general answer is no if the loan is guaranteed by the Federal government. If you have questions on if the loan is, we can help you. Another common question is why student loans are exempt from bankruptcy discharge. The answer is long, but I can try to explain. Years ago student loans were dischargeable in bankruptcy if certain requirements were met. However, over twenty years ago this changed and Congress made it tougher for student loans to be discharged. While technically here in the 4th Circuit a bankruptcy filer could file a lawsuit in bankruptcy court to cancel their student loan debts, the likelihood of success is almost zero even with good facts. Hopefully this will change in the future by Congress or the Supreme Court.
Another option to consider is consolidating your student loans. This can help to simplify your monthly payments and potentially lower your interest rates. You can consolidate your loans through the federal government’s Direct Consolidation Loan program, or through a private lender.
If you’re having trouble making your monthly student loan payments, you may be able to qualify for a repayment plan based on your income. The federal government offers several income-driven repayment plans, including the Income-Based Repayment (IBR) plan and the Pay As You Earn (PAYE) plan. These plans can lower your monthly payments to a more manageable amount based on your income and family size.
Another option to consider is refinancing your student loans. This involves taking out a new loan to pay off your existing student loans, and it can potentially lower your interest rates and monthly payments. However, it’s important to be careful when considering refinancing, as it can also extend the length of your loan and ultimately result in paying more in interest over the life of the loan.
If you’re struggling with student loan debt and you’re not sure what to do, it’s important to seek the advice of a qualified bankruptcy attorney. A bankruptcy attorney can help you understand your options and determine the best course of action for your situation. If you’re a resident of South Carolina and you need help dealing with student loan debt, don’t hesitate to contact us for a consultation to see if bankruptcy or other debt solutions can help.