More Americans than ever before have large amounts of student debt, and unlike many types of debt student loans have few options when it comes to debt relief. Most student loan debt can not be discharged through bankruptcy but that does not mean you do not have options if you are facing financial difficulties. Most lenders who offer student loans expect a large percent of borrowers to pay late, miss payments, or even default on these loans. For the lenders this may not seem ideal but this does mean there is hope available for consumers who owe student loans. The lenders are usually willing to work with you so that you do not default and you can work through your current financial issues.
If you experience money problems and can not make the payments on a student loan it is important to contact your lender immediately to find out what your options are. You can request a forbearance or a deferral on the loan payments, and it may also be possible to apply for a graduated payment option or an income sensitive repayment plan. Student loans are generally not placed into default until your payments are approximately 9 months past due, and even then it is not to late to change this status. Student loans in default can be placed in a program for rehabilitation, and this allows your loan to return to good standing status once you have made a specified number of loan payments on time.
There is also a program available through the federal government that can be helpful if you owe student loan debt. This program offers an income based payment, so that you pay based on your annual income amount. The federal program allows you to pay an amount equal to 15% of your discretionary income for the year. Your discretionary income is your total income minus 150% of the poverty level for the state that you live in. For the 2011-2012 period this amount for a family of 3 in Ohio is $27,795, and for a single individual the amount is $16, 335. The federal program calls for a payment that is 15% of any income that you have over this amount. If you are a single individual with an income of $22,000 then your payment would be $22,000 – $16,335 = discretionary income of 5,665 x 15% = $849.75. As long as this amount is paid during the year your student loan debt will not go into default.
Even though you cannot discharge student loans in most bankruptcy cases, the discharge of other debt often makes it possible for you to begin paying the student loans. With all or most of the other debt wiped out, progress on the student loans is possible.
The bankruptcy attorneys at Richard West Law can help provide a free debt consolidation consultation to help you find the right answer for your unique debt problems and circumstances. We can help you with student loan debt, unpaid taxes, and many other issues. Visit https://www.debtfreeohio.com or call (513)771-8700 or (937)748-1749 to get the answers you want, and the financial relief you are looking for.