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Chapter 13 Bankruptcy and Student Loan Repayment Options

National student loan debt has exceeded national credit card debt and has reached nearly $1 trillion.

Student loan debt repayment, just like credit card debt repayment can be overwhelming and stressful.

The big difference is that student loan debt can rarely if ever be eliminated in bankruptcy or otherwise.

Monthly payments on student loans can be as high as a mortgage payment. People who are graduating from school are finding themselves with huge student loans and in jobs that do not offer enough income to meet their necessities and cover the monthly student loan payments.

There are several programs available to assist with the repayment of federal student loans, but many private student loans are unwilling to provide affordable payment plans.

Federal student loans offer the Income Based Repayment program which can decrease your monthly payment to an affordable rate based on your income and household size.

But private student loans do not qualify for the Income Based Repayment program. Even under some of these programs the proposed payment amount may be beyond what is affordable to any one person.

Talk with Roddy Lanigan and Eric Lanigan, Winter Park, Florida, bankruptcy attorneys to find out what relief is available if you cannot manage your student loan payments and you are being threatened with wage garnishment?

One option could be to find relief under the Chapter 13 bankruptcy code. Although many individuals many not qualify to have their student loans discharged as part of a bankruptcy–very, very few can qualify–they can still use a Chapter 13 bankruptcy to repay student loans and with an affordable payment.

Chapter 13 bankruptcy allows individuals with student loans to consolidate their student loan debts into an affordable payment plan that is made over three- to five-year plans.

This can be an incentive and a viable option for someone facing garnishment from student loans and with a creditor unwilling to work out an affordable monthly payment. Once the Chapter 13 plan is filed, any garnishment or collection efforts from the student loans must cease.

In the Chapter 13 plan, a payment is proposed that offers to pay all of your unsecured creditors (including student loans) all of your disposable income.

The offered payment can be significantly lower than what is required from the student loan company.

You can still file for Chapter 13 bankruptcy to repay your student loans even if you have filed a Chapter 7 bankruptcy and received a discharge of your other debts. The Chapter 13 bankruptcy can be used to set up a reasonable repayment amount for your student loans.

Once you complete your Chapter 13 repayment plan, any remaining balance unpaid on your student loan will still be your responsibility.

If after completing a Chapter 13 plan, your circumstances have not changed enough to allow you to repay the required amount on the student loans, then you may need to consider filing another Chapter 13 bankruptcy.

If used properly Chapter 13 can be a powerful tool to successfully pay student loans in a reasonable method. Find out whether Chapter 13 bankruptcy can help you lower your monthly payments and have your personal budget reviewed by bankruptcy attorneys Eric Lanigan and Roddy Lanigan. Experienced attorneys for people seeking representation with a personal touch.

You may even get an estimated payment amount for your Chapter 13 plan at the initial consultation. Not every person will have the same economic situation or the same income. Find out if your scenario can be helped with a Chapter 13 bankruptcy to resolve student loan repayment.

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