| During college, many students rack up enormous | | | | times over the life of your accumulated loans. |
| amounts of debt in the form of student loans. And | | | | A better solution to forbearance of your student |
| although many private student loans that are credit | | | | loans may be deferment, which is an entitlement |
| based may be eligible for discharge during a | | | | under the U.S. Department of Education. Deferment is |
| bankruptcy proceeding, those loans that were | | | | much like forbearance, although in certain instances, |
| obtained from the United States Department of | | | | interest may not continue to accrue, although that |
| Education do not qualify for discharge under the U.S. | | | | fact differs from lender to lender. |
| Bankruptcy Code. If the majority of your past due | | | | Student Loan Consolidation |
| and delinquent debt consists of student loans, | | | | Another option is student loan consolidation. As a |
| bankruptcy is usually not the best option. | | | | borrower, you no doubt have multiple loans with |
| Better Options For Student Loan Borrowers | | | | multiple lenders or servicers, which means that you |
| Bankruptcy can represent a new beginning for many | | | | will make multiple payments. During student |
| borrowers, but the effects of filing bankruptcy can | | | | consolidation, student borrowers can consolidate the |
| be felt on your credit file for as long as the next | | | | entire bulk of their loans into one big loan with one |
| decade. Although many borrowers, especially | | | | monthly payment that better meets their financial |
| students with massive amounts of student debts, | | | | ability to repay their student debt. You can |
| often feel that there is no other option or that there | | | | consolidate both private and government loans. |
| are other alternatives, managing your student debt | | | | Defaulting on Your Student Loans |
| can be accomplished in other ways. | | | | Managing your loan payments may be difficult, but by |
| Forbearance and Deferment Options | | | | actively working with your lender or consolidating |
| Once you have graduated and received the last | | | | your loans, you can get through the repayment |
| degree that you will be working on, most student | | | | period and get on with your life and your career. The |
| loans are written so that you must begin repayment | | | | outcome for those who do not take repayment of |
| after six months. However, if you are unable to find | | | | their loans seriously is grim. The U.S. government can |
| work, there are ways to get around paying on your | | | | seize any income tax refunds that you are entitled |
| loans until you become gainfully employed. One such | | | | to, and can actually garnish your wages at your |
| way is through forbearance. During forbearance, your | | | | future place of employment. |
| loans will continue to incur interest, but you will not | | | | Additionally, your credit rating will bear the scars of |
| be required to pay. | | | | defaulting on your federal student loans for many |
| Forbearance can give you a reprieve from paying on | | | | years, and you will always owe the government (and |
| your student loans until you are better off to do so | | | | the government always collects). The only way to |
| financially; however, forbearance will only be granted | | | | have your loans completely discharged is if you |
| for a short period of time and a limited number of | | | | become legally disabled. |