Have you ever asked yourself why can’t you file bankruptcy on student loan debt? Maybe you are one of the many people who have realized that they have too much credit card debt.
Before you get into debt, the Federal Student Loans is a gift from the federal government. It doesn’t matter how well you did in school, if you can’t find a job, the lender has your back. So, with so many financial problems that people are facing, the lenders are willing to work with the debtor.
Debt counselling and negotiation work in the same way. The person may feel like there is no way out. In this situation, a debt counsellor will look at all your options, and he or she will help you get out of debt.
So, how can you file bankruptcy on your student loans? There are several options available. You can use the bankruptcy code or declare bankruptcy. If you are going to take advantage of bankruptcy, you need to understand the bankruptcy laws.
Bankruptcy laws allow you to eliminate some of your debt, and it is very easy to file. If you use bankruptcy to eliminate some of your debt, your lenders should take you seriously. Since you are considered a “defaulter”, you probably won’t be able to qualify for a new loan, however, your credit score may suffer. Do not take the bait to keep your credit score high.
Your credit rating is what your lenders base their decision on when deciding whether or not to loan you money. Remember, there are plenty of people who can get money for things that they have an unlimited credit history. The credit score plays a big role in whether or not you will be able to qualify for another loan.
If you find that you do not qualify for a new loan, your best option is to file bankruptcy and ask the court to set up a plan that will allow you to eliminate your federal student loans. If the court deems that the amount of debt you owe is not forgiven through the bankruptcy, you will still be able to file.
Now that you understand the reasons why you can’t file bankruptcy on student loan debt, what can you do to begin the process? Here are a few things to consider:
A counsellor who specializes in filing bankruptcy is a good place to start. There are numerous books that you can order, and your counsellor will guide you in the right direction.
There are also workshops you can take to get you on the right track to clear your credit, or you can enrol in a credit-repair course. Either way, you can get your credit score back in order.
Consider talking to some relief companies to learn more about your options. This is a long-term solution, and you may need more than one round of counselling.