For many people, a college education and student loans have long been synonymous. With student loan debt now at approximately One Trillion dollars and income levels for college degree holders down 14.7 percent, the stage has been set for college graduates entering a struggling economy to be overwhelmed by financial challenges. For many of them, seeking the advice of a personal bankruptcy attorney provides solutions.
The Federal Reserve Bank of New York recently released data showing an aging student population acquiring college loan debt. According to the Fed, student loan debt in the 30-39 age group has surpassed the debt held by younger students. An older student population with large amounts of student loan debt, credit card debt and, in some cases, mortgage debt may find they are unable to afford the payments once college and deferment periods come to an end.
The high unemployment rates associated with a struggling economy over the past few years are making it difficult for college graduates to obtain jobs. Those graduates who do find jobs are disappointed by the salaries now being offered. Current and future college graduates are going to be confronted with financial challenges that may lead to unpaid bills and a desperate need for debt relief.
The surprise awaiting many former students who might consider personal bankruptcy as a way to eliminate debt is the fact that most student loan debt cannot be discharged in either a Chapter 13 bankruptcy or a Chapter 7 bankruptcy; Congress changed the law several years ago to make it almost impossible to eliminate student loans by filing for bankruptcy. Despite this, a Chapter 13 bankruptcy may still be helpful for people in a great deal of student loan debt.
Individuals who are concerned about the amount of debt for which they are currently responsible should contact a bankruptcy attorney to discuss their options. While student loans may not be dischargeable in a personal bankruptcy, reducing or eliminating other forms of debt through individual bankruptcy could provide a person with manageable payments. In addition, a Chapter 13 bankruptcy may give you some relief from immediate student loan payments and allow you to defer your student loans for additional time.
Source: Business Insider, “Student debt is skyrocketing for a very odd age group,” Mike “Mish” Shedlock.