The student loan lending industry has grown rapidly in the last ten years, and with that growth has also come an increase in the number of graduates who have or are in default over their loan. With steep penalties like wage garnishment at stake, you have much more to lose than tolerating harassing phone calls. Luckily, there are options for stopping student loan debt default and resolving financial hardship.
Making A Change
While you may have heard that bankruptcy is not an option for resolving your student loan debt, this isn’t entirely true. Filing for Dallas bankruptcy can stop wage garnishment orders on your student loan account and eliminate other sources of debt that could free up income to be used towards your student loans. In some cases, student loans can be eligible for a discharge in a Chapter 13 bankruptcy. However, most people find that one of these additional forms of relief better suit their needs:
Rehabilitation- many lenders offer payment schedules to spread out the payments on your loan. While this is beneficial to some borrowers, those that are suffering financial hardship may need modifications to the schedule to lower or temporarily suspend the payment.
Deferment – there are some events that may allow you to delay the payment of your loan and interest fees. Starting a new career, relocating, starting a family and other life events may enable you to have to up 12 months payment free. Just remember this is a delay of the payment of the loan, not a reduction.
Forbearance- in some cases your lender may temporarily suspend or lower your payment requirement for up to 12 months. Forbearances are granted based on financial need, so the application process can be a bit of an obstacle. However, a little effort goes a long way to helping you get out of default.
Forgiveness-the government now offers several programs that can reduce the amount of time on your loan payment schedule. Offered for those in careers in education, public service, or not-for-profit work, these programs can help lower payments and reduce the loan payment period by several years.