You went to college and worked hard to earn your degree with the intention of being able to afford your student loan payments. Then life happens. Things don’t always work according to plan, but the bills keep piling up and you need a way out of debt. Although most student loans are not eligible for bankruptcy protection, you can learn how to defer student loans through Chapter 13 bankruptcy to wipe out your debt.
Since Federal student loans are not eligible for bankruptcy protection and private student loans require the borrower to pass a strict test to prove severe hardship, bankruptcy will not automatically eliminate student loan debt. However, Chapter 13 bankruptcy allows borrowers to reorganize their debt under a court approved budget plan that will enable them to satisfy their debts within five years.
In addition, a bankruptcy attorney can often negotiate a student loan deferment for five years until the bankruptcy debt is cleared so the borrower will be able to make their remaining student loan payments. Although you are not required to make payments while your loan is in deferment, interest is still accumulating on your balance. Therefore, it is best to defer student loans for as short a time period as you can afford.
Using a student loan deferment program in conjunction with Chapter 13 bankruptcy is a powerful tool that lets individuals become debt free within five years. Consult with an experienced bankruptcy attorney to understand the best course of action to take for your financial situation.
Learn more about filing for Chapter 13 Bankruptcy.
Learn more about student loans and alternative student loan debt consolidation options.