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Debt relief hard for many with student loans

Many students in Chattanooga are likely looking for student loans to pay for all or most of their college education. However, for those who come through school and do not get work, trying to get debt relief for student loans is often very difficult, though for some not completely impossible.

Many students today are facing increasing debt loads when they graduate. In Tennessee, many students actually fare better than most, but still face an average debt of around $20,703. Nationwide, the total student loan debt is more than $1 trillion and is now the largest form of consumer debt in the United States. Without a job or steady source of income, repaying that debt can often be difficult.

In this economy, it is not rare for a new graduate to face financial challenges. Many companies, including the federal government, offer a deferred repayment plan on student loans. In addition, there are also income-based plans that may help a former student in a low-paying job. For many, these repayment options help. However, for some with extreme circumstances, this may not be enough. In those cases, filing for bankruptcy may in limited situations be a viable option for getting debt relief from student loans.

Typically, a Chapter 7 or Chapter 13 bankruptcy cannot be used to discharge student debt. It can only be done if there is a severe hardship. Most people do not qualify for this exception; however there are some who will be able to discharge their student loans. For example, if the student has suffered a permanent total disability, he or she may be able to get the student loans discharged. However, this exception is usually only available if the accident that caused the disability happens after the student applies for student loans.

Student loans are typically a debt that is nondischargable. However, for some people who have suffered an extremely unfortunate circumstance, there is still a possibility of a discharge for student loans.

Source: Jackson Sun, "Student loans threaten generation with heavy debt," Paul C. Barton, Nov. 5, 2012

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Kenneth C. Rannick, P.C.
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Chattanooga, TN 37411

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