If you are struggling to pay your bills and creditors are hounding you, bankruptcy may be a viable option for financial relief. Yet it is important to know that not all debt can be discharged—such as student loans. Over 40 million Americans have some form of student loan debt. In the last 15 years alone, student loan debt has increased more than 500% and it is only getting worse. Each year, more and more college graduates flood the market looking for jobs that just aren't there. As a result, they get in financial trouble and have difficulty making their student loan payments.
There are two types of student loans in the U.S: federal loans and private loans. No matter which one you have—the bankruptcy code of 2005 has made it nearly impossible to get rid of repaying these loans. Since the bankruptcy code does not allow for discharge of these loans, Americans are forced to make their payments or risk defaulting on these loans.
DEFAULTING STUDENT LOAN
What happens if you default on a student loan? The consequences for defaulting on your student loan may be more severe than you think. When you default on your loan, your credit score will automatically be impacted, which will lead to difficulty qualifying for a car loan or home loan. You will forfeit all income tax refunds and you may even lose your professional license for defaulting on a student loan.
FILING FOR BANKRUPTCY
So what are you to do? An experienced Boulder bankruptcy lawyer can help you determine which form of bankruptcy is best for you. There are special situations in which student loans can be discharged, and your attorney can see if you qualify for this special relief. In order to qualify, you must prove that extreme hardship would befall you and your dependents if you continued to pay this loan.
Even if you do not qualify for relief, there are ways to use bankruptcy to your advantage to help reduce your other forms of debt. This alone will make paying your student loans easier. In addition, your Boulder bankruptcy attorney can help you restructure your student loan debt to make it more manageable for you and your family.
CONTACT BOULDER BANKRUPTCY ATTORNEYS
If you are struggling with high debt and unpaid bills, bankruptcy may be a viable option to get back on track. The bankruptcy attorneys at Goff & Goff have helped numerous individuals in Boulder, Broomfield, Longmont, Westminster, and throughout the State of Colorado get back their financial freedom through bankruptcy.