Student loans have become a serious burden for many people over the years, and failure to pay back your financial institution or the government can lead to very hard economic times for you and your family. Bankruptcy is one option that is often considered. Some people say that bankruptcy can hurt you when it comes to repaying student loans or at the very least that there is no benefit at all.
However, there are also positive outcomes for filing for bankruptcy with student loans. It’s important to remember that bankruptcy can hurt you even if it is your co-signer that is filing, not you. However, more often than not, nothing will happen to your student loans if you file for bankruptcy; you generally cannot have your loans discharged, but neither will you face penalties for doing so. Now, if
you are having your wages garnished or have a social security offset, you could benefit from filing for bankruptcy; this is because collection activity stops for your student loans when you file for bankruptcy.
As long as you have everything cleared up by the time your bankruptcy is completed, you essentially have a ‘fresh start’ and don’t have to worry about how much will be taken out of your paycheck to cover your loans.
Deciding whether or not to file bankruptcy is a big decision, especially with student loans, and it greatly depends on your personal situation. If you would like to gain more insight into help with your student loans, contact SM Law Group today – we’d be happy to speak with you.