What Happens to Your Student Loans in a Chapter 13 Bankruptcy?

Student loan debt has swelled to an unmanageable size in the United States and it continues to increase. In 2015, total student loan debt in the US was estimated at nearly $1.2 trillion. Many people in Atlanta and throughout Georgia are having serious difficulty managing their educational loan payments each month.

Unfortunately, it is almost impossible to discharge student loans through bankruptcy. Unless paying back your loans is causing you a severe hardship beyond what many other Americans face, your loans will not be discharged. Chapter 13 bankruptcy does, however, offer some significant benefits for those dealing with student loans in addition to other types of debt.

Chapter 13 bankruptcy, also known as debt reorganization, works by condensing all of your unsecured debts into one smaller monthly payment based on what you can afford. This means that your student loans, your credit card debt and your medical bills will all be treated as one payment for the duration of the bankruptcy process.

For three to five years, you will make this payment, as well as any payments for secured debts such as mortgages. This process comes with some major benefits for those who are stuck with student loans, including:

As student loan balances continue to grow and more Americans are having financial problems due to educational debt, larger solutions are needed. In the meantime, the bankruptcy attorneys at DebtStoppers can help you get your financial life back on track. For a free consultation, call us at 678-673-2142 or contact us online.

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