If you are an Atlanta resident who has attended college in recent decades, the chances are that you financed it with student loans. Student loan borrowing has become the primary method of financing higher education in the U.S. With tuition the way it is, it seems as though only the very wealthy can manage to pay for college out-of-pocket.
Unfortunately, many students are ill-prepared to take out student loans when they sign on for them. Recent news reports have shown that a number of students do not have a solid understanding of interest rates, or a feasible plan for paying back the debt, when they take out loans. This has led to significant financial trouble for a number of Americans.
Adding insult to injury, it now appears that the interest rate on subsidized Stafford loans may actually double.
Leaving college with a significant amount of debt, and a high interest rate, can be very troublesome for Georgia residents. Carrying a heavy debt-load from your days as a student might make it difficult to do things like purchase a car or home. It might also become an unbearable burden should you ever suffer a spell of unemployment.
The debt relief options for those with unsustainable amounts of student loan debt are limited. Student debt is one of the very few types of debt that generally cannot be discharged in bankruptcy; it can only be discharged if you can prove undue hardship.
Nonetheless, some people with significant amounts of student loan debt may want to consider Chapter 13 or Chapter 7 bankruptcy. A Chapter 13 filing can help you consolidate your payments, resulting in lower monthly payments. This might be a good option if you have a steady income or little other debt.
For others, a Chapter 7 filing may be the answer. Chapter 7 bankruptcy will discharge all or most of your other debt, so that you will have the funds available to handle your student loans.
These are not decisions to take lightly. Those who are considering bankruptcy as an answer to student loan debt should evaluate their options with the assistance of a bankruptcy attorney.
Source: The Huffington Post, "More Debt. Little Understanding. Big Problems." Paul Combe, June 28, 2013