Naperville Bankruptcy Attorneys Clarify Student Loans in Bankruptcy
Many Americans today feel crushed under student loan debt, and not just recent grads struggling to find work. Now more than ever, high-pressure collection agencies are heavily pursuing parents and grandparents who are co-signers or guarantors for defaulted student loans. Fortunately, those with student loan debt do have options. It is a myth that filing for bankruptcy cannot help you with your student loans. In fact, filing bankruptcy can offer you a fresh financial start for your entire debt picture—including student loans.
If you struggle to pay student loans, our Naperville bankruptcy attorneys can review your situation and offer you options for relief.
Can I Get Rid of Student Loans by Filing for Bankruptcy?
Current bankruptcy law requires a person seeking to discharge a student loan to demonstrate extreme hardship. All people filing for bankruptcy have hardships. However, only those suffering from severe medical afflictions or disabilities with no hope of ever repaying the loan may qualify for a student loan hardship discharge.
The majority of people will not be able to completely wipe clean student loan debt in either a Chapter 7 or a Chapter 13 bankruptcy. However, this does not mean you cannot find relief from student loans by filing bankruptcy.
Reorganize Student Loans in Chapter 13 bankruptcy
Many student loan borrowers can reorganize debt and manage their entire financial lives with a Chapter 13 bankruptcy. Also, remember that unsecured debts, such as credit card bills and medical bills, are dischargeable. By getting rid of other burdensome debt, you will have more income to pay the student loans in the future.
Filing a Chapter 13 bankruptcy will allow you to:
- Immediately stop all collection activities, including harassing telephone calls
- Stop wage garnishments or bank account garnishments
- Halt interest and penalties of the student loans while in the Chapter 13 plan
- Pay down the student loans throughout the bankruptcy
- Eliminate other debt to free up your income after the bankruptcy is over
Contact Our Offices for Bankruptcy in Illinois
If you are struggling to pay your household bills and student loan debts, you need legal advice regarding your personal bankruptcy options. Our firm serve clients in Naperville, Chicago, Aurora, Waukegan, Skokie, Joliet and Wheaton, and we will do everything we can to help you. Contact an experienced Naperville bankruptcy lawyer from our firm today for a free consultation.