If you are among the Georgia residents who are cash-strapped due to high monthly student loan payments, you are not alone. Student loan debt accounts for more consumer debt in this country than any other type of debt other than mortgages.
Not only do a very significant number of Georgia residents have student loan debt, but many are carrying much more than they can bear. While there are options available to those who are struggling with overwhelming student loan bills, they are complex and difficult to navigate alone.
In some cases, it is possible to arrange a more affordable payment plan with a student loan provider. In other cases, it may be wise to pursue bankruptcy protection in order to get a better grasp on student loan debt.
Generally, student loans, like taxes, cannot be discharged in bankruptcy. However, by filing Chapter 7 bankruptcy, many other debts are discharged and this can allow a consumer to better afford student loan obligations.
Another option is Chapter 13 bankruptcy, which may allow a consumer to consolidate multiple student loan payments into one lower monthly payment.
There are some risks, however, associated with filing Chapter 13 bankruptcy to cope with student loan debt. Due to intricacies within the federal bankruptcy code, student loan balances may incur fees and interest penalties during the bankruptcy period in some cases.
Student loan debtors should not despair, but they should ensure that they understand the potential implications of filing Chapter 7 or Chapter 13 bankruptcy in order to make an informed decision. Those who are struggling to make student loan payments should consider talking to a reputable bankruptcy attorney about their options.
Source: Wall Street Journal, "Student-Loan Straitjacket," Katy Stech, Sept. 30, 2013