Student Loans-Bankruptcy Modifications, Reaffirments
Wondering How Bankruptcy Might Affect Your Student Loans? Enfield Attorney Provides Options
Bankruptcy Lawyers Focus on Bankruptcy and Student Loans
It is very difficult to discharge student loan debt in bankruptcy, unless the borrower files an undue hardship petition and it is granted by a judge. Borrowers are extremely unlikely to successfully obtain an undue hardship discharge in part because Congress never defined what it meant by an undue hardship, leading to arbitrary and unpredictable bankruptcy court decisions.
If you have federal student loans, you might be able to take advantage of the flexible federal repayment plans now available. While private student loans will not be eligible for the federal repayment plans, it is still possible to negotiate a loan modification with your private student loan lender. Although lenders are under no obligation to grant modifications, they would often rather renegotiate the terms of your loan than allow you to default on your obligation.
Reaffirmation agreements are not required in bankruptcy and are totally voluntary, and there may be certain circumstances when they make sense, such as in the case of a borrower who has inadvertently received federal Title IV loan funds in excess of an annual or aggregate loan limit and wishes to regain eligibility for additional Title IV aid.
Communication with loan servicers can be the key to protecting your credit and managing your student loan debt. If you experience a change in financial circumstances that enables you to return to making payments, let your loan servicer know immediately. The loan servicer can then take you through the steps to determine your monthly payments and return your loan status to "in repayment" again.
If you have questions about how bankruptcy will affect your federal and private student loans, Redman Ludwig, P.C will give you the personal attention you deserve. Contact our firm online or call 317-800-6181 to schedule a free consultation today.