Overwhelming debt is a problem plaguing many people in Smith County, Texas, and residents throughout the country. While people have accumulated debt through credit card spending, debts arising from medical emergencies or following the loss of a job and income, many people are financially struggling with student loan debt. According to the Consumer Financial Protection Bureau, the nationwide student loan debt is an astounding $1.2 trillion dollars in the United States.
According to news reports, Americans who have recently graduated walk out of college with an average debt of $35,000 in government or private student loans. While this figure may look like a manageable amount to many people, a large number of students have student loan debts amounting to hundreds of thousands of dollars, often difficult to pay and follow the student well after graduation.
Residents of Smith County in a similar situation should know that despite that fact student loan debts are not discharged through bankruptcy filings, a Chapter 13 bankruptcy can help a debtor substantially reduce loan repayment amounts. This is possible because Chapter 13 bankruptcy allows debtors to consolidate all their debts into a single income-based repayment plan. In fact, a successful Chapter 13 bankruptcy filing can make it possible for a person to pay the same amount of money that the person was earlier paying toward student loan debt to cover both student loan debt along with other debts together.
Many people understand that financial challenges can be crippling, but that does not mean that a debtor should stop exploring options to obtain debt relief. Smith County debtors who have a steady source of income but are struggling with student loan debt at the same time should consider the Chapter 13 bankruptcy route to obtain debt relief. However, they should remember that bankruptcy filings are a complicated area of law and it may be in their best interest to understand the potential positives and negatives before filing.
Source: Post-Gazette.com, “Student loan debtors using Chapter 13 bankruptcy to buy time on payments,” Tim Grant, Aug. 2, 2015