When the mortgage or rent is due, most people understand the consequences of not paying on time. They risk paying high penalties or even losing their homes altogether. The same may be said of not paying utilities and car payments, the consequences of which include the loss of something essential. When money is tight, people in South Carolina may pay those bills first, opting to push less critical bills, such as student loans, out of their minds for now. However, this may be a serious mistake.
The U.S. Department of Education estimates that eight million people have defaulted on student loans in recent years, collectively owing the government over $137 billion. Many of those people took out their loans in the 1970s and 80s and have simply never been able to find a job that would justify the expense of a college education. Others have loans for occupational programs, such as cosmetology or truck driving, which may not yield a very high paycheck. As a result, they owe debt they cannot pay for a degree they cannot use.
The government does not forget about student loans even if consumers ignore them. Federal authorities may exercise several options to reclaim the money loaned for a college education, including garnishing wages. Recently, the government has begun to file lawsuits against those who have defaulted on their student loans. Through these lawsuits, the government can place a lien on someone’s property, preventing them from selling or refinancing until they pay their debt.
While student loans are not dischargeable by Chapter 7 bankruptcy unless a hardship can be proved, some in South Carolina take this route to eliminate other burdensome debt in order to free up funds to pay down their student loans. Additionally, there may be other options available to those who are struggling with their student loans, mortgage, credit card debt or medical bills. After speaking with an attorney about the alternatives, many feel a sense of relief and hope for the future.
Source: ksdk.com, “Defaulting on student loans may lead to the loss of your home”, June 9, 2017