Many Americans have debt, and a significant number have debt associated with student loans. Higher education is expensive, and many have to rely on loans to pay tuition and housing costs. As a result, Pennsylvania college students may graduate with a significant amount of debt they are not sure how they will repay. At some point, those who have exorbitant amounts of these loans may want to consider Chapter 13 bankruptcy.
Chapter 13 bankruptcy involves reorganizing debt in a way that allows a consumer to manage his or her payments more effectively. Over a period of three to five years, many balances are paid off. Student loans are not dischargeable through bankruptcy, but are treated as nonpriority unsecured debts during a Chapter 13 proceeding. Once the debt reorganization plan is completed, however, the filer will have to continue paying any remaining student loan debt.
By restructuring debts, an applicant will not have to worry about the hassle and stress that comes with constant contact from debt collectors and creditors. It will be easier to keep up with payments, which in turn can make it easier for an applicant to keep up with his or her student loan payments. Bankruptcy can result in better financial health long-term.
If a Pennsylvania adult is struggling with paying student loans, he or she is not alone. There are benefits to filing for Chapter 13 bankruptcy, including a manageable payment plan and freedom from debt collectors. A potential applicant may find it helpful to speak with an experienced bankruptcy attorney before making an important financial decision that could affect his or her future.