AppId is over the quota
April 28, 2012 /24-7PressRelease/ -- Many debtors have had to learn about their options for loan modifications and other strategies for stopping foreclosure due to the collapse of the real estate market. Economic analysts are now turning their attention to another looming debt crisis: massive student loan obligations that create an insurmountable financial burden for young people getting started in their careers.
Many people may already be aware that in most cases, student loans cannot be discharged in a Chapter 7 bankruptcy. There are some rare exceptions which include, but are not limited to, being able to demonstrate a significant undue hardship as well as being able to show that a good faith effort was made to pay the loans. These circumstances could lead a person in financial distress to be subject to judgments or liens even if they have explored in good faith all of their options for debt relief.
The total U.S. student loan debt figure could soon pass $1 trillion, and it is already more than Americans owe for either car loans or credit cards. The average figure for college graduates has exceeded $25,000, an increase of 25 percent over the past ten years.
Student loan debt burdens are not just a problem for people in their 20s and 30s. One of six delinquent student loans are held by debtors who are 50 years old or older, many of whom have co-signed loans for children or grandchildren. Regardless of the age of the debtor, a recent survey by the National Association of Consumer Bankruptcy Attorneys (NACBA) reported that student loan debt collection abuse was on the rise.
Legislative Calls for Student Loan Forgiveness
Because some economists see the looming student loan debt crisis as yet another threat to economic growth, legislative action has been proposed in the form of H.R. 4170, the Student Loan Forgiveness Act of 2012. This federal bill would cap student loan interest rates, extend forgiveness for public service and provide significant modifications to repayment plans.
Although there are not yet direct solutions to the student loan debt problem through bankruptcy, other ways to obtain relief already exist for many borrowers. A debt relief lawyer can explain how the Chapter 13 bankruptcy process might spell relief by reducing other obligations. An attorney can also help a debtor take advantage of existing programs for addressing student loans such as Income Based Repayment plans as part of a comprehensive strategy to make student loan payments and other debts manageable.
Article provided by Parker & Associates
Visit us at www.ninaparker.com/
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