For individuals who are struggling with their finances but have student loan to repay, the issue of bankruptcy is one that may not be an alternative. It doesn't matter if the student is still in school or they have recently graduated.
Under the new laws implemented by the Federal government, there are now very strict guidelines in place that limit Federal, state, and private lenders who offer funds for financial aid to be included when an individual files for bankruptcy. The most dramatic changes came in 1998 with the changed to Title 11 under the United States Code.
Under this code individuals can no longer have their student loans discharged with the rest of there debts. Congress amended that code established in 1998 in 2005. With this particular change it is virtually impossible to get your student loans discharged. There is a small window of protection that some individuals can find some relieve under though. This process involves filing a petition with the court to prove that they are suffering a severe hardship through no fault of their own. In some rare cases part of or all of the student loan may be discharged.
To be able to classify a given situation as a hardship the individual has to show they are unable to maintain the minimum standard of living for their family based on Federal guidelines. They must also be able to provide that there is almost no chance those conditions will get better over a long period of time.
If the courts can't determine that an undue hardship has taken place for the individual then the student loan repayment will not be discharged. However, many individuals are able to discharge many of their other debts. This process often leaves more disposable income to pay the remaining debts, including their student loan.
Another viable option through the courts is to reclassify the educational loans and financial aid funds when the person files for Chapter 13 bankruptcy. This allows the individual to pay more of their income to the student loans because the amount of unsecured debt has been reduced.
If you find that your wages will be garnished to repay student loans, the maximum amount that can be withheld under Title 11 of the United States Code is 10% of your gross earnings. While many people have found themselves to be in trouble when it comes to repaying student loans, the ability to get this debt reduced or eliminated is almost non existent under the new laws.
Friday, July 10, 2009
Student Loan Bankruptcy - It Isn't as Easy as You Think
Student Loan Consolidation Advice and Good Credit Score May Help You Find a Good Job
Nowadays, education costs don't come cheap, thus it becomes a problem that affect to students a lot. A great number of students are taking so many loans to support their education at colleges or universities. It seems to settle their problem for the time being but things will start to get more and more difficult when they graduate. What's more, they are already in debt before they even earn their first dollar. There is a solution to this problem that is student loan consolidation.
Here are some of the benefits of student loan consolidation:
1. Lower monthly payment
The first benefit is by consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower. This is by far the best reason for you to consider taking the loan consolidation rates, and it is possible to decrease your monthly payment by 40% - 50% when you make a research on the lenders.
2. Lower rates
In addition, you can also lower your interest rates by looking for the right lenders. Again, it will prove beneficial to you when you run some researches on the various lenders' offers.
Also, you should take good care of the fine prints and do not forget to ask for any hidden cost. Actually, you don't want to suffer any extra payment when you are trying to manage your loan. And to help you on that, we suggest students looking for online consolidators to calculate your future student loan consolidation base on the current rate of your student loan.
3. Only one payment
Imagine you have acquired some loans during your studies, for example, a housing loan and that you have to bank in different payments to different companies at different time. That's a lot of work you have to do. Wouldn't it be great that you can make one payment and be free from all the annoying reminders? Just by consolidating the student loan can you do that and get your loans taken care of easily.
4. Stress disappears
Obviously, the financial companies will punish you for paying late and surely you never expect this to happen. It is not pleasant for you to remember the various due dates for the payments.
The key to the problem again is very simple: forget to pay the loan. When you sign up for student loan consolidation, you only pay once to the company to cover all your loans. This is great and you will not have to worry for the loan that surrounds you all the time. All you have to do is saving time for other interests rewarding
5. No credit card check or processing fees
During the application of a student loan consolidation, there is no requirement of credit card check. How fantastic it is that the payment plans and terms are usually quite flexible in that they can customize it according to your financial standing.
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