22nd Oct 2018

It is reported that federal student loans have had continuous, cumulative growth since the Great Recession ended in 2009.  These loans have increased by approximately 157 percent over these years. That is a tremendous increase compared to the 52 percent that automobile loan debts have increased in the same time period.  Student loans are the second largest consumer debt in the U.S. economy after mortgages.

With this increase in student loan debt, is it any wonder why so many Americans are defaulting on their loans?  The cost of tuition has continued to increase while the interest rates on student loans have also increased. We just can’t keep up and we aren’t going to be able to any time soon.  Bloomberg Global Data reports that these student loans have the highest 90 day delinquency rate of all household debt. The fact is that about 10 percent of all student loans are delinquent.  

You need to have a plan on how to maintain your household expenses and not default on your student loans.  If you do default on these loans, they will report the default to the credit bureaus, you will receive collection calls and even possibly a lawsuit to collect on the debt.  It is also possible that tax refunds may be garnished to repay some student loans.

While it’s true that bankruptcy will not generally help you to discharge your student loans, although that is sometimes possible, it is possible to discharge your other unsecured debts, such as credit cards, medical bills, other unsecured loans, etc. allowing you to focus on your student loans that do not go away.  You will need to qualify for bankruptcy in order for this to happen, which is why you should always consult a qualified attorney before making the decision to file.

In Chapter 7, you do not have to make payments to any of your unsecured creditors during the case and most of these debts will be discharged at the end of the case, with the exception of things like child support, alimony, some tax debt and student loans.  You must qualify to file Chapter 7, however, through your income and an analysis of your assets will also need to be prepared.

In Chapter 13, you can establish a payment plan to repay some portion of your unsecured debts over a 3 to 5 year payment plan.  The amount you repay to these creditors again depend upon your income and your assets. If you have low income and a low amount of assets, your repayment plan will likely be lower.

Once you file bankruptcy, your creditors are prohibited from collecting against you in any way.  They are not allowed to call you, send you letters, file or proceed with any lawsuits or judgments against you, etc.  Thus, you can have peace of mind without any harassing calls.

Please give me a call at 281-847-4345.  I’ll be happy to sit down with you for a free, no obligation consultation to evaluate your situation and inform you of your different options on taking care of your debt through bankruptcy.  You can also send me an email at rkemsley@kemsleylaw.com. I look forward to hearing from you soon.

 

Rod S. Kemsley

KEMSLEY LAW FIRM, P.L.L.C.

Attorneys & Counselors at Law

505 N. Sam Houston Parkway E., Suite 400

Houston, Texas 77060

Telephone:  281-847-4345

Facsimile:  281-271-8677

Email:  rkemsley@kemsleylaw.com

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