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Chapter 7 filing can help students effectively manage debt

Student loans are getting heavier with each passing year, and the cost of living is not going down any time soon, either. With this in mind, it's valuable for South Carolina students to consider their options when it comes to debt recovery. There are a variety of ways for students to consolidate and otherwise erase their non-student debt, up to and including a personal Chapter 7 bankruptcy filing. While bankruptcy won't erase student debt under current law, it can help to ease the pressure and reallocate funds to where they'll do the most good.

It's often tempting for students to consider an extended payment program: on paper you're still paying off your debt, but you're taking a little longer to do it and therefore paying less per month. However, it's a dangerous proposition that means you can't start saving for retirement until much later, potentially losing thousands in possible retirement savings. It's may be a better idea to look at how you can reorder your debt in order to pay off your loans faster. Not paying off student loans in a timely manner can result in added costs and even wage garnishments; even a bankruptcy filing won't erase student debt, so it may make sense to determine how to quickly and effectively pay off your school costs.

A variety of government programs exist to help students with federal or state school loans; however, these programs are not of any assistance for private students. Eliminating non-student debt can also go a long way toward clearing the way to pay off student loans, and that's where Chapter 7 comes in. Clearing the deck of credit card payments and other outstanding loans by filing a Chapter 7 can free up more money to apply toward student loan debt immediately.

In the last 20 years, student debt has reached an all-time high. Paying off that debt can be critical to one's ability to move forward into a debt-free future. In South Carolina and elsewhere, a Chapter 7 bankruptcy filing can mean the difference between wiping the slate clean of debt early in life, and carrying loans and interest for many years to come.

Source: Huffington Post, "How to Get Out of Student Loan Debt," Steve Rhodes, May 6, 2013

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Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
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Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
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