Recently, the Pittsburgh Post-Gazette had an interesting story about people who are utilizing Chapter 13 bankruptcy to enter into manageable repayment plans for student loan debt.
According to the news source, one 29-year-old man who works as an employee at a college graduated with more than $80,000 in student loan debt, although he only makes $31,000 per year. The man said that the debt forced him to work a second job on top of his university job, as a supervisor at McDonalds at night where he was making $9.03 per hour.
Rather than continue to work stressing hours, he chose to file for Chapter 13 bankruptcy to help pay down his debts.
Another woman the Post-Gazette talked to said that she earns about $52,000 per year, although she accumulated $223,000 in student loan debt while earning a dental hygienist bachelor’s degree. She has also decided to file for bankruptcy.
“The student debt when I graduated, I couldn’t believe the bills that were rolling in and the interest on top of them,” the woman said, according to the newspaper. “When I sat down and did the math, I figured I probably would have paid for my education seven times over on the 30-year plan and I would have been paying them until, basically, I died.”
According to the Post-Gazette, the national average student loan debt for people graduating with a bachelor’s degree is now $35,000.
Although student loan debt is difficult to discharge during most bankruptcy filings, if a debtor files for Chapter 13 bankruptcy, he or she can enter into a repayment plan that can reduce monthly payments. In the man’s case above, he was able to reduce his student loan payments from about $1,000 per month to about $200.
If You Have Student Loan Debt, Talk to Our Bankruptcy Attorneys about Your Options
In addition to entering into a repayment plan to manage student loans, many people who are struggling financially also find great help in Chapter 13 bankruptcy, as they are able to reduce or eliminate other debts, including credit card debt and medical bills.
Additionally, when you file for Chapter 13 bankruptcy, all collection attempts are stalled, as an automatic stay goes into effect. Therefore, if you have outrageous student loan payments and creditors are harassing you, this can provide a great form of relief.
Julian, Crowder & Shuster, P.C. – Lewisville Bankruptcy Attorneys