People file for bankruptcy for many different reasons. Most people, however, file bankruptcy as a last measure – meaning, they don’t file unless their financial situation is real bad.
Filing bankruptcy can be an effective way to start over without most of your debts. Unfortunately, bankruptcy will not wipe away every debt. There are certain types of debts that cannot be discharged even if you file bankruptcy. Student loan debt is one these types of debt. Regardless of what type of bankruptcy you file, your student loans will never be discharged.
Chapter 7 and Student Loans
When you file Chapter 7 bankruptcy, your unsecured debt is discharged. However, you are still left owing your student loans. They don’t go away like your unsecured debt. Once the Chapter 7 has been completed, generally within 3 months, your monthly student loan payments resume.
Chapter 13 and Student Loans
Chapter 13 bankruptcy may impact your student loans a little differently. Depending on your specific situation, this type of BK filing may be a better option if you have a lot of student loans. If you earn more than the median, your Chapter 13 plan will be for 5 years. If you make less, the plan will be 3 years.
Throughout the life of the Chapter 13 plan, your Central Valley BK attorney can reduce the monthly payments on your student loans to an amount you can afford. Once your plan ends, you can keep filing a new Chapter 13 bankruptcy until you eventually pay off your loans.
In short, under a Chapter 13 bankruptcy filing, your student loans will not be discharged. However, you will benefit from reduced monthly payments.
You Need Legal Help
Filing bankruptcy is not an easy process. You need to consult an experienced Central Valley bankruptcy lawyer to help you determine the best route given your specific situation. A good attorney will listen to your concerns, including any concerns about specific debt, such as student loans. He should then explain how each type of bankruptcy filing will help or hurt your situation and your outstanding debt.
Call an Experienced Central Valley Bankruptcy Attorney
If you have already filed for bankruptcy or are planning to file for bankruptcy, it is important to immediately seek legal help. It may be in your best interest to consult with an experienced bankruptcy attorney to help you determine what the plan that best suits your specific needs.