A increasingly common picture is that of the recent college graduate armed with an expensive four year education standing in the career fair line. Why? The economy simply cannot produce the needed entry level jobs promised to these educated young adults in exchange for getting their degree. Many are left with no job, or highly underpaid jobs, and large amounts of student debt. Even worse? Student loan debt is a very challenging type of debt that has left many young adults with few debt relief options.
Reviewing The Options
Although student loan debt is rarely dischargeable through bankruptcy there are a few other, and perhaps better, options for managing these debts. Obviously, repaying the debt is always the better choice for protecting your financial future, but what if you can’t afford it right now?
Luckily, there is an option for you to request a deferment of your loan payments. A student loan deferment is a temporary suspension of loan payments. In most cases, the deferment will also suspend the interest from accumulating during this time. Many student loan lenders will allow a deferment of 6 to 12 months for (a) financial hardships, (b) going back to school, (c) involuntary unemployment or (d) opening/starting your own business. It is important that you contact your lender to request a deferment of your payments before you miss any payments.
If you have the ability to make payments towards your student loans you should do so. However, if you feel your financial hardship or employment situation is going to last for a significant period of time, consider a debt settlement option. By consolidating or negotiating a settled loan amount, you may be able to reduce the total amount owed on the loan. Debt settlement options can be a better option than bankruptcy when you have the financial means to maintain the payment schedule. You may be able to negotiate an agreement with your lender directly. If you must use a third party settlement company, be sure to always get a copy of the negotiated agreement in writing.