STOP STUDENT LOAN COLLECTION

Restructure Student Loans on Your Terms

WITH NEARLY $1 TRILLION IN STUDENT LOAN DEBT IN THE UNITED STATES, STUDENT LOAN BORROWERS HAVE A HUGE (AND INCREASING) NEED FOR LEGAL ASSISTANCE.

Student loan collections have become much more aggressive in the past few years.  We are frequently meeting with clients who are unable to work out any repayment plan with their creditors.  The good news is that while you are in a bankruptcy the student loan creditor is deferred from collecting on the loan.  In a chapter 13 case you either have the option to put your loan into a 5 years repayment plan or defer payments for the time you are in the bankruptcy.

While you will see companies claiming to be able to discharge your student loan in bankruptcy it is current VERY difficult to do with the law in the current state.Most able bodied consumers do not qualify for student loan discharge but are able to restructure their loans either in bankruptcy or forbearance plan.

Although bankruptcy is not always the best answer to dealing with student loan repayment issues, in some situations Chapter 13 bankruptcy can help. If your loans are in default and you cannot qualify for a reasonable repayment plan then Chapter 13 bankruptcy may help you get back on track with your student loans.

Chapter 13 Stops Student Loan Collection Actions

Once you file a Chapter 13 bankruptcy the automatic stay immediately goes into effect. Under the automatic stay, student loan creditors are prohibited from taking collection action against you. This collection prohibition continues while you are making payments under your Chapter 13 plan (which typically lasts from three to five years). In some cases clients pay their entire loan through the Chapter 13 case while in other cases clients choose to not repay the student loan at all while in Chapter 13.

After You Complete the Chapter 13 Plan

If your student loans are not paid in full during your Chapter 13 case you will have to continue to make payments after bankruptcy. The good news is that before you have completed your Chapter 13 case you can contact the student loan creditor to set up a new repayment plan once you have exited your Chapter 13 case.

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