• Nearly One in Five Households Carrying Student Loan Debt

    This CBS News video discusses the increasing number of Americans that are struggling with student loan debt. The Chicago Tribune reported on September 27, 2012, that a Pew Research Center analysis of government data found nearly one in five of households are burdened by school loans. According to the Tribune, the 19 percent of households affected by school loan debt in 2010 is more than double the share from two decades ago, when 9 percent of households in 1989 owed money for education.

    Furthermore, the Tribune also noted that student loan payments are equal to nearly a quarter of the income for individuals with incomes in the lowest fifth nationwide. The Tribune reported that young people and poorer Americans are especially hard hit, as four in 10 households headed by someone younger than age 35 have student loan debt. Overall, the Tribune said student loans now make up 5 percent of all debts, whereas they comprised 3 percent just five years ago.

    Barring an extreme hardship, student loan debt is very rarely discharged when an individual files Chapter 7 or Chapter 13 bankruptcy. However, filing Chapter 7 or Chapter 13 bankruptcy could allow you to discharge other certain debts, such as credit card or medical bills. Freeing up this additional income could not only help you make your student loan payments, but it may also help you pay off the education balance sooner. Contact our firm at (866) 930-7482 or complete the form on this page to let our Chicago bankruptcy lawyers see how we can help.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • College Grads Learning Truth About Student Loans In Bankruptcy

    The standard to get rid of student loan debt in bankruptcy is “just exceptionally high,” Todd Brown told the Buffalo News in an article published on October 8, 2011. “Most other kinds of debt you don’t have to jump through those hoops,” said Brown, an associate professor at the University at Buffalo who practiced bankruptcy law.

    The Buffalo News story is another in the spate of articles about the increase in college graduates filing for bankruptcy. A study released by the Institute for Financial Literacy in September found that from 2006 to 2010, bankruptcy filings increased 21 percent among those holding a bachelor’s degree. Even if “a bachelor’s degree is the new high school degree,” the Buffalo News also noted that those with master’s degrees or higher rose at a similar rate.

    Even before the Financial Literacy study, CBS News reported on July 31, 2011, that bankruptcy is not an option for the more than 500,000 students who have defaulted on their student loans since 2008. The college graduate profiled by CBS is paying $160 per month on her federal loans and $800 per month toward a private loan, even though both loans were for the same amount of $40,000. Lauren Asher with The Institute for College Access and Success told CBS that private student loans are much more like a credit card or sub-prime mortgage as they tend to have variable rates and have no consumer protections. “Some people say it’s like graduating with a mortgage and you don’t have a house,” Asher said.

    Sallie Mae, the nation’s largest provider of educational loans in the United States, notes on their website that several laws were passed in the 1990s that made student loans ineligible for cancellation in bankruptcy. Before you even consider a bankruptcy means test , you should speak with a Chicago bankruptcy attorney to make sure that filing is in your best interest. Our firm strives to help all clients become debt free and credit rich, but recent college graduates should remember that neither Chapter 7 nor Chapter 13 bankruptcy will discharge your student loan debt unless you are physically unable to work. If you have additional questions, contact our office today to set up a free consultation.

    Benjamin Brand Services – Chicago bankruptcy lawyers