There are 2 main types of bankruptcy for consumers:
Chapter 7 bankruptcy allows someone to eliminate the most unsecured debts in a matter of just a few months in return for giving up all of their "non-exempt" property.
Most people in debt who file for Chapter 7 may not be available to pay off unsecured debt creditors.
This is known as "no asset" bankruptcy, and most Chapter 7 bankruptcy are of this type.
Chapter 13 bankruptcy takes about 3 to 5 years. Rather than giving up property that you own, you may choose to repay a portion of your debts and live within a budget that is kept monitored closely by a bankruptcy court trustee. If you don't think you can manage required monthly payments, your Chapter 13 bankruptcy fails and your debt will remain (unless you convert to a Chapter 7 bankruptcy).
This may depend on the type of Debt Consolidation Program you want to use. It is likely that any Debt Consolidation Program you will choose can save you a large amount of money when compared to the very minimum payments. You may use a debt calculator to look at your specific situation and how much you can save.
If you are still making the minimum monthly payments on your credit card debt, the chances are high that you're mostly paying just the interest, and not paying down the actual principal amount by much if at all. This won't make much of a dent in your ovarall debt. And if you miss your payments or exceed your limit, your credit card interest rate will only go up. Replace your credit card debt with consolidation loan, where your interest rate won't change and your principal loan amount gets paid down as you make fixed monthly payments.
The common misperception that once a student takes out a student loan, they are obligated to pay it all back no matter what the circumstances are. This is not completely true. While a lot student loan debt may not be forgiven through bankruptcy, attorney Chris Bush at DebtDoc may have many ideas to help you reduce or get rid of your debt.
However, it is still important to note that the process of relieving student loan debt is different from the process of discharging other types of debt and will require a very detailed analysis of the many types of student loans as well as an examination of the history of the loans.
Bankruptcy is a federal legal status of a person in debt or other entity that is not able to repay the debts it owes to their creditors. In many jurisdictions, bankruptcy is imposed by an order of the court, often initiated by the debtor.
Bankruptcy, however, is not the only legal status that a person in debt or other entity may have, and when we say bankruptcy, it isn't synonym for insolvency. In the United States, bankruptcy is applied more broadly to formal insolvency proceedings.
Student Loan Consolidation can be the right option if you:
Have loans with multiple lenders
Have a lot of student loan debt
Posess more than one type of federal loan
You have loans with variable interest rates
You have trouble paying the amount due on loans and need to organize a lower payment
Realize there are many advantages and disadvantages to a student loan consolidation.
One servicer, one bill, one payment
Lower monthly payments
Fixed interest rate
More monthly payments
More interest to pay
Loss of loan incentives
Federal student loans are loans that must be repaid, plus an agreed upon interest rate. New federal student loans are run through the Federal Direct Loan Program (FDLP). An FDLP student loan is originally borrowed from or currently owned by the Department of Education. Any federal student loan borrowed after June 2010 are FDLP loans, though the barrower of the student loan could receive FDLP loans before that time.
If you are interested in a debt consolidation plan you will be able to combine most, if not your complete unsecured debt and make one simple monthly payment. The debt accounts will still exist, but will be paid monthly through your account. You may find that by engaging in a debt consolidation program you will become much more organized and accurately know your financial obligations for each month. Debt consolidation can also lower one's monthly payments.
Student loans are very difficult, but not entirely impossible to discharge in bankruptcy. To do this, you must prove that the payment of the debt “will impose an unwelcome and undue hardship.”
Courts use different criteria to evaluate whether a particular owner of debt has shown an undue hardship. If you can, with success, prove you have an undue hardship, your student loan can be completely canceled. Filing for bankruptcy to help with your student loan debt also automatically protects you from collection actions on all of your debts, or at least until the bankruptcy case is resolved or at least until the debt creditor gets permission from the court to resume collection again.
Obtaining financial aid can be a daunting task. If a student looking for financial aid doesn't get guidance from a counselor or older sibling who is currently on a college campus somewhere, it can be extremely difficult to figure out how to find a starting point. There is good news. Chris Bush is here to help. With just a little research and an introduction to the basics of financial aid, you'll be using even the most obscure financial aid acronyms with ease.
A way to ensure you are being fairly treated.
When it comes to Student Loans, there is a Federal Agency dedicated to assist the financial consumer. With the growing amount of outstanding student loan debt, students, parents, colleges, universities, and our political leaders all must work together to be informed, have access to critical information as outlet to be heard. The CFPB offers free information regarding student loan servicing, private student loans, and the dangers of student loan debt relief companies.
Complaints about student loan lenders, servicers, and debt collectors can be submitted as well as any comments regarding student loan issues, improvements, suggestions, etc. This information is then compiled and reports are generated and available to the public. This serves as a manner in which to keep every element in the student loan arena accountable.
For more information, please log onto:
In a difficult economy, it can be very challenging for job applicants to distinguish themselves from other people applying for the same position. Often, people will pursue a degree in the field in order to be more qualified than other applicants. In many cases, these individuals do not have the resources available to fund their education, so they have to take out student loans.
Once they have finished their schooling, many people experience significant problems trying to find adequate employment. Some will take lower paying jobs in an effort to make ends meet, while others will remain out of work while they continue their search. Despite these challenges in finding suitable employment, these individuals will still have to make payments on their student loans once they become due. This can create severe financial issues for individuals who are already experiencing problems paying their bills.
Student loan debt is unique as it is often not dischargeable under the bankruptcy process, except in cases of undue hardship. This may be a difficult standard to meet. Bankruptcy may still allow these people an opportunity to organize their finances in order to repay their student loans.
Some legislators have been considering making some changes to the laws to require colleges and other secondary schools to have a more personal stake in the loans that their students take out. This would require the institutions to educate borrowers on the impact that the burden of student loans will have on their future. They would also mandate that schools with high rates of default on loans be penalized, which could force the schools to better assist their students with l adequate employment opportunities after they have received a degree.
Individuals who are not current with their payments may find themselves facing collections actions from their lenders or servicers. Borrowers need to take these notices seriously, as further financial problems can result. Additional fees, costs and interest will be incorporated into the balance which will create further hardship.
If you have questions about dealing with your student loan debt, you should discuss your concerns with an experienced bankruptcy attorney. An attorney will be able to provide you with an overview of all of the possible options that you will need to consider, and help you determine which course of action is best for your financial situation. Most importantly, do not delay or ignore your student loan debt.