Student Loan Cancellation – Is a Bankruptcy Filing Really the End of the Story?
Did you know you could stop paying your student loan debts by declaring bankruptcy? In fact, there are many circumstances under which it may make financial sense to do just that. If you are currently delinquent on your student loan debts and think you may be eligible for bankruptcy, you should contact a student loan debt relief service today and find out for yourself. Here are three reasons to consider.
First, student loan cancellation will help you avoid repaying. If you qualify for the complete cancellation of your student loans, also called discharge, you may be able to: totally wipe out the entire loan balance. This means you will not have to pay one cent more than the total that you actually owe. You will not have to pay any more interest either. Or, in some cases, you may be able to eliminate some or all of your future student loan repayments through wage garnishments or other tax incentives.
Second, student loan cancellation can save you time and money. You will not have to spend two decades or more trying to repay your student loans. With bankruptcy, you could face up to ten years in prison. Or, if you proceed in filing bankruptcy without having at least ten years of on-time payments, you could face up to thirty years in prison. That’s a pretty big handicap, isn’t it?
Third, student loan cancellation can save you a lot of money. If you file for bankruptcy, most of your assets will most likely be liquidated as part of the process. Not only that, but you may have to pay the administration fees associated with filing and stay within a very limited budget. On the other hand, you don’t have to worry about any of that if you use a non-profit service like Brunner to help you. Once the process begins, you will be assigned an attorney who will represent your best interests and act as a liaison between you and the lender.
What if I don’t use student loan cancellation? What if I choose to go the other route? It’s possible to go through a process called “discharge student loans,” which doesn’t involve filing for bankruptcy. In fact, you might have to go through quite a few administrative proceedings before your discharge is finalized, but that hardly makes it a major setback. And, if you’re a good student, you’ll be approved quickly.
If I think about it, isn’t it really just a minor setback when the government decides to enact wide-scale student loan cancellation? Yes, and no. If you think about it, a wide-scale executive branch action like this would certainly cause political fallout. The fact that the government is involved in such a large scale transfer of financial responsibilities should be enough to slow you down and make you rethink what you’re doing. But it’s not going to necessarily kill your chances of getting a good deal with lenders.
Some borrowers have found that after going through a wide-scale student loan debt audit and being given the go-ahead to cancel their loans, they find that lenders are willing to negotiate new terms that are far more favorable to them. In some cases, the new terms are so great that borrowers with poor credit histories to qualify for zero interest rates. Of course, not every case can be this easy, and it certainly helps if you work with a reputable service like a student loan help company, which has experience negotiating these sorts of deals. But there are plenty of good services out there if you know where to look.
In short, while a bankruptcy filing may seem like the only way to get out from under your student loan debt obligations, it shouldn’t be the only deciding factor when it comes to your choice of repayment method. After all, why should you go through all the trouble of filing for bankruptcy in the first place if lenders will still allow you to file for student loan cancellation? After all, they won’t be making any money on your bankruptcy. So it seems like a no-brainer to switch to using other repayment methods and to cancel your student loans in exchange for an even better deal with your lender.