Going to college always seems like a great decision in life, but studies show that one in five people cannot repay the student debt they acquired to go to school. If you are currently faced with this problem and are wondering what to do, you should know that there are options. You can look into the following options to see if they might work for you.
1. Apply for a Repayment Plan
In many cases, people have refinanced their student loans with the lenders that issued the loans, and you may want to try this option first. If you call your lender and explain that you are having a hard time repaying the loan, the lender may agree to refinance it. There are several different ways this is done, but it typically allows you to have lower payments by extending the length of the loan.
If your lender is not willing to do this, you could look for other student loan lenders and find out if they offer any types of programs or plans that you could use to help you reduce your payments. You may even find a plan that allows you to defer your payments for a certain amount of time.
2. Look for a Debt Consolidation Plan
A second option you could consider is consolidating your debt. This option works well if you have other types of debts too, such as credit card bills. With debt consolidation, you could combine all the debts you have, including your student loans, into one large debt, and you would be able to make payments on it.
The benefit of this is that debt consolidation plans generally help people lower their monthly payments. If you could pay less each month for all the debts you have, you might have an easier time repaying all the bills you have. Another benefit of debt consolidation is that you might be able to lower the interest rates on your loans. If this occurs, you could pay less in all because the interest amounts would be lower.
3. Apply for Student Loan Forgiveness
The federal government created a student loan forgiveness program to help people that are having trouble paying their student loans. There are numerous rules that apply in order to qualify, and one of the main ones is that a person is not eligible until he or she has made at least 120 consecutive payments on the loan. If you meet all the requirements for this, you could have the remaining balances on your student loans forgiven. With this option, you would never have to pay the balances of the loans.
4. File for Bankruptcy
If you look into these options and cannot find one that will help your situation, you may want to sit down and talk to a bankruptcy attorney to find out if bankruptcy would be helpful for you. Chapter 7 bankruptcy is the first type your lawyer may suggest. This type will not automatically discharge student loan debt, but your attorney may be able to help you get this debt included in your discharge.
To do this, you will have to file a special petition that illustrates that you have student loan debt and that you are having a hardship that is preventing you from repaying it. It will be up to the bankruptcy trustee to decide whether it can be discharged or not. If so, your student loans will be forgiven, and you will no longer have to pay for them.
If Chapter 7 doesn't work, your attorney might suggest filing Chapter 13. This branch of bankruptcy will not allow you to have debts discharged, but it will offer an alternative method for repaying all the debts you owe. Typically, it involves a payment plan that spreads the debts over a certain period of time. This can be beneficial with student loan debt because it can reduce the monthly payment amounts.
Repaying student loans can be difficult, especially if you have trouble finding a good-paying job. If you would like to learn additional information about the options you have for eliminating this debt, speak to a bankruptcy attorney today.
