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Chapter 7 bankruptcy can help stressed student loan borrowers

On Behalf of | Feb 21, 2019 | Chapter 7 Bankruptcy, Firm News

It is no secret that the cost of a college education is significantly out of reach for the average person in Florida. However, since securing a successful career often hinges on earning a degree, most students are willing to take on the monumental costs, including student loans. While most graduates work diligently to repay their loans, some are hit with an unexpected surprise after tying the knot — their monthly payments go up. Even a moderate increase can quickly become too much to handle, a problem that Chapter 7 bankruptcy can help address.

Approximately 60 of those who recently graduated college had to borrow money in order to attend. The burden is not small, either, as the average grad left school with $28,500 in student loans. Most borrowers already expect to delay buying a home or having children until these debts are paid off, but what about getting married? Delaying marriage might not be necessary, but student loan borrowers need to understand how aspects of marriage can affect their payments.

Filing taxes jointly has a lot of benefits, including things like student loan deductions, child care tax credits and the earned income tax credit. However, filing jointly also means that a person’s household income is higher, thus potentially making the monthly payments higher than before. Depending on a person’s situation and other debts, filing separately can yield better results.

It does not take long for debt to spiral out of control, and reigning it back in can feel impossible. This is especially true when it comes to debts that have repayment schedules tied to a person’s income, such as student loans. While student loans cannot typically be discharged in Chapter 7 bankruptcy, borrowers in Florida can still utilize the process to address other debts, making it easier to focus on repaying those loans.

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