For many in Florida, high levels of student loan debt are putting enormous strain on their budget and peace of mind. When an individual’s takes on student loans, it is with the expectation that the education that they are pursuing will enable them to find a good job in the field of their choice. No one expects to have to file Chapter 13 bankruptcy in order to manage student loan debt. In an unstable economy, however, many well-trained students emerge with a respectable college degree and no position in which to apply their newly gained knowledge and training, leading to the need for debt relief.

A newly issued report from the National Consumer Law Center (NCLC) advises those with student loan debt to be wary of agencies offering to reduce student loan debt. In many cases, these firms use deceptive practices to entice distressed borrowers into programs that offer little-to-no actual assistance. Consumers can find themselves with no appreciable debt relief, even after having paid thousands for debt relief services.

The NCLC conducted a review of 10 debt relief companies, including making calls to the firms and reviewing the information presented on their websites. The results suggest that borrowers should use caution when shopping for debt relief options. Some of the companies reviewed charged high fees for programs that are actually free, such as federal student loan repayment programs that use a borrower’s income to tailor payments. Other companies offered inaccurate or misleading information, or gave virtually no information at all.

When saddled with high levels of student loan debt, Florida borrowers should carefully research all debt relief options before moving forward with a plan of attack. In some cases, filing for Chapter 13 bankruptcy can give borrowers a three-to-five year timeframe in which to repay their loans under a clearly defined repayment plan, and can lead to the discharge of other unsecured debts. For others, one of the federal loan repayment programs can offer a means of paying down student loan debt.

Source: CBS News, “Beware the student-debt-relief industry,” Lynn O’Shaughnessy, June 20, 2013