Smith Ortiz P.C. Articles College Graduates Face Serious Financial Difficulties Due to Overwhelming Student Loan Debts

College Graduates Face Serious Financial Difficulties Due to Overwhelming Student Loan Debts

By Smith Ortiz, P.C.  Jun. 3, 2013 3:59p

Student loan debts can have wide reaching impacts on a graduate's credit and general financial future that he or she may not have anticipated. Most people seeking to attend college are unable to afford the ever increasing costs of tuition, housing, text books, etc. without some form of financial aid. Students who obtained federal, state or private student loans can be put at a severe disadvantage after college in the face of a somewhat difficult job market. According to a study conducted by the Federal Reserve Bank of New York, national student debt is nearly three times what it was eight years ago. That total is almost $1 trillion. The only other debt plaguing Americans (as far as "household debts" go) that is higher than outstanding student loans is mortgage debt. The study went on to detail how the number of graduates who are delinquent in making payments have also surged over recent years to almost 20 percent. High student loan balances can affect credit ratings and make it difficult for debtors to obtain home loans, car loans or lines of credit. Next to tax debts, student loan debts are nearly impossible to discharge through various forms of debt handlings or bankruptcy but changes to federal laws and regulations concerning student loans may provide hope to some.

Options for Managing Student Loan Debt

If you are falling behind on your student loan payments then you should consult with a bankruptcy lawyer knowledgeable in various debt solutions as soon as possible. While filing for bankruptcy may not be able to specifically absolve student loan debts, Chapter 7 or Chapter 13 protection may allow you to discharge other debts which will make student loan payments more manageable. Additionally, depending on the type of student loan, a Chapter 13—also known as "debt reorganization"—filing may make it possible to renegotiate the terms of your student loan so your balance is reduced or payments are brought down to a more manageable amount. There are other options available that do not include filing for bankruptcy but qualifying for these options depends on certain conditions of the loan.

See what a bankruptcy attorney may be able to do for you!

Graduates are facing an uphill battle when they finish college or university if they do not have a good plan in place to ensure that they can deal with loan payments and any other financial difficulties. By consulting with a bankruptcy attorney who knows how to get results, it may be possible to find a solution you never thought possible. Contact us at Smith Ortiz, P.C. today to discuss your goals and discover how we may be able to help you attain financial freedom!

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