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Student Loan Debt is Not Easily Eliminated in Bankruptcy

Filing bankruptcy or the inability to file bankruptcy due to debt from student loans has become a major concern for many students after graduation.

Collegians who find themselves unable to meet financial obligations incurred in pursuit of a degree turn to bankruptcy not knowing that student loans are usually not allowed for reasons to file bankruptcy.

There are exceptions that a bankruptcy judge will see in court that would show enough hardship to demonstrane a permanent inbility to pay the student loan off over time. However, there are rare circumstances that occur that would be allowed.

By the time the average individual graduates from a public college or university, they will owe as much as $25,000 to $225,000 in student loan financing, including monies borrowed from private lending institutions.

Depending upon what region of the country in which they are enrolled, tuition can range from $3,000 to as much $8,000 per year. According to the U.S. Department of Education, almost 5% of graduates default on education loans within two years after commencement. The high cost of higher education, coupled with a dismal post-graduate job market, has placed many students in jeopardy of financial ruin before they can ever begin what they hoped would be lucrative careers.

Student loan bankruptcy not only impacts graduates’ financial futures, but it hits taxpayers in the pocket, too. Statistics indicate that the average taxpayer pays nearly $400 annually in taxes due to student loan bankruptcy court and administrative costs.

Parents who mortgaged their homes or co-signed for federal, state and private funding may also be at risk of financial failure in the event of default. Many undergraduates fail to plan a fiscal future and campus life offers little preparation.

In the college environment, basic amenities like food, clothing and shelter are taken for granted, and credit card abuse is rampant. By the end of freshman year, undergrads may have received countless offers from major credit card companies to apply for plastic cash; and most of them take full advantage of the privilege.

If you want pizza, just charge it. Need books for Biology 101? Charge it. And the interest just keeps adding up. But as soon as the lights go dim on the commencement stage, reality hits and the fledgling scholar is left with nothing but a sheepskin and soaring debt.

When college loan debt overwhelms you find out what can be done, if anything, to slow or lower payments, get a forebearance or eliminate college student loans. Contact Orlando Banruptcy attorneys Eric Lanigan and Roddy Lanigan.

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