Options for Those Struggling with Student Loans

Until Congress changes current laws that make it nearly impossible to discharge student loans through bankruptcy, you will have to settle for other options when it comes to paying debts including:

  • Graduated repayment: This payment plan increases your monthly payments over time. However, if you chose a graduated plan, you will end up paying more interest and possibly extend your payment period.
  • Income-based repayment: This plan bases your monthly payment on your household income. Like a graduated payment plan, there are consequences like paying more in interest and extending the payment period for your loan. Also, if you are married, lenders require that you use your joint income to determine the amount of your monthly payments.
  • Consolidation and refinancing: You may be able to transfer your student loan balance over to other lenders, who offer lower interest rates. If you are able to consolidate your loans with one lender, you may be able to save money over the life of the loan. If you are going to consolidate your loans, make sure you compare interest rates because you are only able to consolidate loans once.
  • Forbearance and deferment: You can seek deferment or forbearance, where you can suspend your loan payments while you save money. However, you have to qualify for these options financially and interest rates typically go up. You also end up spending more money once your loan, as payment plans are extended.

Although you may not be able to discharge student loan debts, you can still free up money for payments by filing for Chapter 7 or Chapter 13 bankruptcy and getting rid of credit card debt. Many graduates face issues with credit card debt, which is dischargeable, because they paid for things like books, tuition and housing using cards. Medical bills and other forms of unsecured debt are also dischargeable.

The options mentioned above can work for some people; however, you are still going to be responsible for student loan payments. Talk to our attorney about what bankruptcy can do for you. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.

Law Firm of Kevin D. Judd



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