Chapter 13 Lawyer in Irvine Talks About Reducing Student Loan Payments

Our chapter 13 lawyer in Irvine has been helping consumers find a way out of debt as fast as possible. Bankruptcy is not an easy decision, but the Karine Karadjian Law Firm is here to help you out. If you are struggling to pay for your student loan, you may wonder if such a loan can be discharged when you file for bankruptcy. Unfortunately, you can only delay or reduce your student loan when you file for Chapter 13 bankruptcy.

Chapter 13 Lawyer in Irvine Helps You Find Other Options

Before you file for bankruptcy, though, make sure that you consult with our lawyer. Perhaps, your case does not call for actually filing for bankruptcy. It could be that another option is better for your situation. When you talk to our lawyer, you will receive personalized attention.

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If you are worried about your student loan, you cannot wipe it out when you file for bankruptcy. The reason for this is that student loan is considered as a nondischargeable debt. To discharge it through bankruptcy, you will have to prove to the court that paying the loan is difficult for you. Unfortunately, proving this can be difficult and the court will mostly just grant it to people with a severe setback. Thus, when you file for bankruptcy, you are still required to pay it back when you receive a bankruptcy discharge. But this is not necessarily a bad thing.

A student loan is an unsecured debt, so it works like a credit card. This means that you cannot discharge it but that you are not obligated to pay it off in full using the chapter 13 repayment plan. Thus, not getting discharged is not a bad thing because you can reduce or delay your monthly student loan obligations. In that case, after your bankruptcy is over, you can continue to pay your loan. Perhaps, at that time, you have saved money to repay it.

Should You Still File for Bankruptcy? 

Even though your student loans cannot be discharged, filing for bankruptcy will still help your monthly obligations. As soon as you file for bankruptcy, you will get an automatic stay, which means that creditors cannot collect your debt. In that case, your creditors can stop harassing you because you are protected by the bankruptcy period, so there is no need for you to pay your regular loan obligation. Depending on your income, you may not need to pay anything during bankruptcy. Then again, interest will still accumulate on your loan during this period. Thus, you will have to pay your creditors back after your case has been closed. For that reason, you should consider repaying your student loan creditor while in bankruptcy. In that way, when your case is closed, the remaining amount might still be easily handled.

Bankruptcy is not always the answer to your financial woes. There are other options to choose from and the best option will depend on your situation. If you wish to know them all, consider talking to our chapter 13 lawyer in Irvine. For a free consultation, please contact us at  (949) 565-4707 or (818) 960-6460.