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We Are Here For You In Appleton 920-659-5606

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Is there any relief for student loans?

On Behalf of | Dec 11, 2019 | Firm News |

There is a prevailing myth that student loan debt is impossible to discharge or mitigate. While it is true that student loan debt is very difficult to deal with compared to other debts, it is not true that no relief is possible. 

If you struggle with seemingly insurmountable student loan debt, there may be some answers. You should consider some of the following scenarios and see if they apply to you. 

Discharging other obligations 

Most people dealing with student loan debt are facing other debts as well. Even if bankruptcy does not reduce or eliminate student loan payments, relief from other debts may allow you to pay these bills. 

Deferment or forbearance of payments 

Deferment and forbearance may sound like similar ideas, but there is a critical difference. While both may allow you to stop making payments for some period of time, deferment may also keep the lender from charging interest for this period. This may add up to substantial savings. Forbearance may help you during a difficult time, but interest expense will be piling up. 

For both deferment and forbearance, you must show that you are experiencing financial difficulty: unemployment, health problems or insufficient income. If your income is such that your student loan payments amount to more than 20% of your monthly income, you may qualify. 

Discharge of student loans in bankruptcy 

Truly discharging or canceling your student loans is difficult, but is possible in some cases. If you suffer from a disability (either permanent or temporary), or were a victim of some kind of fraud, you may have a case. You can also sometimes have your student loans cancelled if you join the military, perform services in some needy or underserved community, or work in certain sectors of health care or law enforcement. 

It may be worthwhile to consider these options if you are facing economic hardship because of your student loans. Do not assume that there is no relief in your situation; review your options before you go into default on your student loans.