| Bankruptcy is in the news these days, as Congress | | | | several years ago, most any loans acquired for |
| has finally overhauled the Federal bankruptcy law | | | | education, including those issued by for-profit |
| after years of talking about it. The credit card | | | | agencies, may not be eliminated through filing for |
| companies, rightly or wrongly, have been pressuring | | | | bankruptcy. |
| members of Congress to tighten the bankruptcy | | | | What this means for those with student loans is that |
| statutes, saying that too many people were willfully | | | | they will need to be repaid. If bankruptcy is |
| spending money they couldn't repay with the | | | | inevitable, those with outstanding student loans |
| intention of avoiding paying the money back by filing | | | | should contact their lenders and see if they can't |
| for bankruptcy. That will soon change, and those | | | | negotiate a repayment plan. Those with Federally |
| with student loans may pay a heavy price. | | | | funded student loans should contact their lender |
| Most everyone knows that consumers with problem | | | | soon, as rates for student loans will go up on July 1, |
| debt who are unable to pay their debts may file for | | | | 2005. Now would be a good time to consolidate |
| bankruptcy under Chapter 7 of the Federal | | | | student loans, as the rates can be locked in for the |
| bankruptcy code. This allows for the court to | | | | long term. If these options are not viable, then |
| basically wipe away all of the debtor's bills and allows | | | | holders of student loans should simply be aware that |
| them to start over. It's not entirely free; the | | | | their lenders and their lenders' loan collectors will be |
| bankruptcy filing stays on the debtor's credit report | | | | keeping in touch with them for the foreseeable |
| for the next ten years and may affect their ability to | | | | future. Those with student loans and other financial |
| buy a home, borrow money or obtain employment. | | | | problems should also be aware that Federal |
| What many people fail to realize is that while | | | | bankruptcy law will change in October, 2005, making |
| installment loan debt or credit card debt can be | | | | it harder to file for bankruptcy. If you have problem |
| wiped out through filing for bankruptcy, most student | | | | debt, now would be a good time to consider meeting |
| loans cannot. In fact, thanks to legislation enacted | | | | with a credit counselor. |