Although student loans are typically non-dischargeable through bankruptcy, there are things that you can do to keep them under control and prevent your other debts from adding up.
The first step in handling your student loan debt is to know exactly how much you are obligated to repay each month. Make a list of all of your student loans and note the monthly payment of each loan and the due date of each loan payment. Sometimes it helps to place these on a monthly calendar so that you can get a visual representation of how much you must pay each week as well as per month. Using a visual representation of your monthly student loan payments will help you budget your income per pay period to include your student loan payments as well as other monthly expenses and debt obligations.
Student loan agreements vary by company and by the type of loan. Understanding the details of each loan, such as the minimum monthly payments, late fees, interest rates, default conditions and deferment options will help you handle your student loan debt in a more financially responsible manner. For example, some student loan companies offer a decreased interest rate if you sign up for automated monthly payments.
No one likes to read the fine print; however, it is within the fine print that you may find relief if you lose your job, have a medical emergency or other financial crisis that results in your inability to pay your student loan payments. If you have questions about the repayment of your student loan debt, contact the loan company and ask questions until you understand all of the details and terms of your student loan agreements.
Some student loan companies offer several types of repayment plans to provide borrowers the flexibility they need to repay their student loan debt. For example, some offer payment deferment if you lose your job and need time to find a new job. Others offer a graduated repayment plan whereby you pay a lower amount upon college graduation with the payment amount increasing each year as your income increases with more work experience and better job opportunities. You may also be able to choose your payment date each month to allow you to space out your multiple payments throughout the month to avoid being overwhelmed at the beginning, middle or end of each month.
Student loan consolidation helps by consolidating all of your student loans into one monthly payment. By consolidating, or in other words, combining all payments into one, you may be able to lower your overall monthly obligation. You may also be able to save interest as some student loan companies offer a lower interest rate if you consolidate all of your student loans into one through the same company.
If you are not living by a monthly budget, you should be. Having a personal budget helps you know where your money is being spent, plug leaks in your budget to save money and avoid going further into debt if you are living beyond your means. Prepare a monthly budget that includes all of your living expenses and debt payments, including your student loans. This will keep you focused and help you pay off your student loan debt on schedule, and sometimes quicker, by revealing expenses that you can cut back on to apply more money to your student loan debt.
We understand how difficult it is to pay student loans, especially with other debts and expenses consuming your income. Filing bankruptcy can help if you are struggling with student loan debt, because it can eliminate other unsecured debts and give you the room you need to pay your student loans on schedule. In some cases, student loans may be dischargeable in a bankruptcy. If you are struggling financially, request a free bankruptcy consultation to discuss solutions to your debt problems.