Welcome to Student Loan Guide
Bankruptcy Consolidate Loan Student Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
You may also listen to this article by using the following controls.
Federal Law Governs Bankruptcy And Student Loans
from:As graduates leave college and enter the working world, there is often the reality that the amount they owe on loans they received for college expenses exceeds their foreseeable earning power. Many times they seek financial relief through bankruptcy and student loans are often included in the filing. However, recent changes in the bankruptcy code have made student loans non-dischargeable through bankruptcy proceedings.
There are few circumstances in which student loans can be discharged and very strict requirements have to be met for a debtor to file bankruptcy and student loans being wiped off the slate. The rules concerning hardship conditions are usually hard to prove to the court and most former students are left with a few options of how to pay off the debt through court-ordered payments,
While Chapter 7 bankruptcy and student loans do not usually go together, the option of filing a Chapter 13 bankruptcy can provide some relief for the debtor. Under this filing no debts are wiped clean, rather the student will pay back all loans through the bankruptcy court trustee at a monthly amount established by the court. The student is protected from legal proceedings in bankruptcy and student loans are often put at the top of the debt list by the court, meaning they receive a higher priority in receiving payments before other obligations.
Additional Student Options Included In Law
While bankruptcy has been ruled out as a means of eliminating student debt, the law has allowed some relief for them through stricter collection guidelines. Typically, if a debtor's debt is judged delinquent by a court and restitution is ordered, the debt holder can garnish wages as well as income tax returns and other income. Without the protection of bankruptcy and student loans that can be the target of garnished wages, the court has limited the amount collectable to ten percent of the debtor's net income.
In most case, the amount allowed is 25 percent, for child support and alimony it is 50 percent of the take home pay. A student may opt for Chapter 13 bankruptcy and student loans included in the filing will paid off under the court schedule. The advantage of Chapter 113 is that the student is protected from any collection activities provided the monthly payments are made in a timely manner.
The laws were changed to accommodate the many lenders who were growing reluctant to provide these unsecured loans to students or their families, only to have them discharged under bankruptcy proceedings.
Bankruptcy Consolidate Loan Student News
Sallie Mae Not Opposed To Bankruptcy Relief For Student Loans - Forbes
Sallie Mae Not Opposed To Bankruptcy Relief For Student Loans Forbes Here is the email from Ms. Holler that got us going: I read Alan Collinge's blog and your comments about it with interest and would welcome the opportunity to discuss student loan debt and recently proposed legislation. I will be in New York on April ... |
My Ten Sense: Government adds new programs to help with student loans - Florida Times-Union (blog)
My Ten Sense: Government adds new programs to help with student loans Florida Times-Union (blog) One program allows new borrowers to repay their federal student loans with 10 percent of their income and the loan is forgiven after 20 consecutive years of payments. Another program enables people with old student loans to consolidate their debt and ... |
Give college students a break on loan rates - Chicago Sun-Times
 Fox News | Give college students a break on loan rates Chicago Sun-Times Back then, every student had a one-time chance to consolidate and permanently fix the rate on all their loans. As rates dropped, many students took advantage of this deal — locking in lower rates for a lifetime. But then this good deal was changed in ... So Your Kid's In College—Now How Are You Going To Pay For It? |
College student loans follow some to old age, according to Federal Reserve ... - WPTV
 WPTV | College student loans follow some to old age, according to Federal Reserve ... WPTV "People don't understand how big an issue this is," said Howard Dvorkin, found of the Fort Lauderdale-based nonprofit Consolidated Credit Counseling Services, which helps people with their debt. Dvorkin recommended older students save for their ... |
Student-loan debts keep them from buying homes - Sarasota Herald-Tribune
Student-loan debts keep them from buying homes Sarasota Herald-Tribune The Stangs filed for bankruptcy and lost their Sandusky, Ohio, home to foreclosure, but because of a 2005 law, their student loan debts still cannot be discharged. Buy Photo ASSOCIATED PRESS By VICKIE ELMER, The New York Times NEW YORK -- For many ... |