March 4, 2019
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The Wall Street Journal reported recently that The White House is looking into ways to help people who are burdened by insurmountable student debt to alleviate some of that stress through new bankruptcy options. Currently, neither federally backed or privately-issued student loans can be discharged in a bankruptcy, but through the Chapter 13 Process you can force an income based payment on your student loan servicer for 5 years.
The plan that the White House is exploring could go a step further than this. However, there are few things you should know about the plans that The Obama Administration is exploring, and points to consider if you have crippling student loans.
While a borrower may have ensured the benefit of their education, student loan servicers don’t differentiate between parents and students when collecting their debt. This measure would help to lessen the burden on parents that have co-signed for private student loans. However, be aware that filing a Chapter 13 Bankruptcy now for student loans can help protect co-signors from collection because the Court can enter an order protecting co-signors if one of the parties files a Chapter 13 Bankruptcy.
Unfortunately, while this bill may add some additional tools to our arsenal for managing student loans this relief may never actually pass the Republican controlled Congress.
Until we find out what is going to happen, there are still options; if you have federal or private student loans from creditors who are being overly aggressive, or if you can’t afford your student loan payments, or even if you just want some options, call us at 1-877-332-8369. We will give you a consultation and you can find out more about how the Debt Doctors can help you manage your student loans and help you prepare “for life after debt”.