Student loan debt, which now affects every generation, continues to increase beyond $1.3 trillion in the United States, and new data from the Department of Education shows that defaulting is also an ongoing problem: at over 1,000 colleges and trade schools across the U.S., 50% or more of students have defaulted on their loans or not made a payment in the last seven years.
Some borrowers eventually default after being underemployed/unemployed or failing to take the steps to receive forbearance, while other borrowers – especially private loan borrowers – lacked options for forbearance or deferment in the first place. All the while, interest continues to accrue exponentially when these loans are not repaid, and falling too far behind can indeed result in long-term debt that continues to increase.
Understandably, essential expenses such as food, housing, and transportation are prioritized over repaying debt when money is tight, but that is the unfortunate reality for too many Americans today. Student loan debt has contributed significantly to personal bankruptcy filings nationwide, and while student debt itself is almost never dischargeable in bankruptcy, Chapter 7 can help eligible clients to pay off their student debt by redirecting funds from debts which were forgiven.
If you are struggling financially and considering filing for Chapter 7 bankruptcy, you’re not alone. Contact an experienced bankruptcy attorney today for a free consultation.