The instant you realize that you are financially overextended the walls of your reality start closing in fast. The financial burdens begin to dramatically take effect and the weight of the debt and the pressures associated with creditor collection efforts start taking its toll on you psychologically, mentally and oftentimes physically. So whether you seek information out via the internet, talking to friends and family, or seeking legal advice…invariably you start exploring your options.
Usually no matter what age you are or your position in life, a portion of an individual’s debt structure includes student loans. Whether you are the student, perhaps a friend which is the cosigner of a student, or in all likelihood a parent of a student, student loans are customarily included within an individual’s debt portfolio.
When I meet potential clients to discuss their financial issues and explore bankruptcy relief as an option, before I begin to discuss the topic of student loans, the person I am meeting with will say, “Yes, I know student loans are not dischargeable in bankruptcy, BUT I have a private student loan!”. I nod in agreement because generally, unless there is a finding of undue hardship, federal student loans are not subject to a bankruptcy discharge. These loans are customarily recognized as Stafford, Perkins, FFEL and Plus loans. To contrast those with private student loans which are commonly issued by banks, credit unions, and schools.
However what most people do not know is that in 2005 (more…)