Student Loans Can?t Be Swept Away Through Bankruptcy

Bankruptcy is in the news these days, as Congress has finally overhauled the Federal bankruptcy law after years of talking about it. The credit card companies, rightly or wrongly, have been pressuring members of Congress to tighten the bankruptcy statutes, saying that too many people were willfully spending money they couldn't repay with the intention of avoiding paying the money back by filing for bankruptcy. That will soon change, and those with student loans may pay a heavy price.

Most everyone knows that consumers with problem debt who are unable to pay their debts may file for bankruptcy under Chapter 7 of the Federal bankruptcy code. This allows for the court to basically wipe away all of the debtor's bills and allows them to start over. It's not entirely free; the bankruptcy filing stays on the debtor's credit report for the next ten years and may affect their ability to buy a home, borrow money or obtain employment. What many people fail to realize is that while installment loan debt or credit card debt can be wiped out through filing for bankruptcy, most student loans cannot. In fact, thanks to legislation enacted several years ago, most any loans acquired for education, including those issued by for-profit agencies, may not be eliminated through filing for bankruptcy.

What this means for those with student loans is that they will need to be repaid. If bankruptcy is inevitable, those with outstanding student loans should contact their lenders and see if they can't negotiate a repayment plan. Those with Federally funded student loans should contact their lender soon, as rates for student loans will go up on July 1, 2005. Now would be a good time to consolidate student loans, as the rates can be locked in for the long term. If these options are not viable, then holders of student loans should simply be aware that their lenders and their lenders' loan collectors will be keeping in touch with them for the foreseeable future. Those with student loans and other financial problems should also be aware that Federal bankruptcy law will change in October, 2005, making it harder to file for bankruptcy. If you have problem debt, now would be a good time to consider meeting with a credit counselor.

©Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and StructuredSettlementHelp.com, a site devoted to information regarding structured settlements.

---

Credit Card Debt: How to Get Rid of It

This method is simple, but requires some discipline.First, you have to stop any new spending on your cards.Second - you'll need to examine all of your spending.... Read More

Mr. Cheapies Frugal Budget Tips

So you feel like a hamster spinning your wheel? The faster you run, the faster the wheel spins. Just when you get a raise, you notice the... Read More

Budget the Luxuries First!

Strictly speaking, his advice was preceded by another Heinlein maxim as well. "Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only... Read More

Debt: Dont Pay Your Minimum Balance

Almost all Americans carry credit card debt. Actually, over 40% of US families spend more than they earn. If you're like most of us, you try not... Read More

The Effects of Consumer Debt

Consumer Borrowing Consumer borrowing in the UK has now crashed through the £1 trillion barrier. 80% of this is due to credit card borrowing, loans and mortgages.... Read More

Bankruptcy Reform

There are some new bankruptcy laws going into effect before long and many think they are much needed. Of course, that depends on which side of the... Read More

The First Step To Getting Out Of Debt: Make The Commitment!

These days, getting into debt is easy.Unfortunately, getting out of debt is not so simple for most people. But you can do, if you go about it... Read More

Debt Settlement

What is debt settlement?Debt Settlement is a process to settle your debts with the creditors. With debt settlement, a third party or you yourself negotiate with your... Read More

The 7 Secrets to Getting?and Staying?Out of Debt

As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can... Read More

Debt Consolidation and Personal Finances: Learn the Truth!

An inability to manage credit, growing debt and bankruptcy are all major problems today. On an average day, over 8,000 people file bankruptcy in the United States... Read More

Deal with All Your Debts with Care!

Lots of people take a large ammount of loans and suddenly they discovered that they're in debt and life seems pretty gloomy for them, in this situation... Read More

Reducing Debt Before Its Too Late - How to Avoid the Pitfalls of Creeping Debt

Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can... Read More

Ten Ways to Get Out of Debt

1) Use your AssetsIf you have assets with some significant equity, such as a home or a car you may be able to use these to get... Read More

Utah, the Nation?s Bankruptcy Capital

Congress recently passed the Bankruptcy Abuse Prevention and Consumer Protection Act, designed to minimize frivolous bankruptcy filings and to require debtors to repay some of their debt.... Read More

Learn The 15 Debt Elimination Steps You Must Take Immediately!

What Everybody Needs To Know...Learn The Truth About Debt Elimination in 2005!Here`s how we have been taught to charge, charge, charge and promised Easy monthly payments by... Read More

Is There A Way Out Of Your Debt Problems?

Do you have multiple debts? Do you have just one large debt which you could afford, but your circumstances have since changed? Are you finding it harder... Read More

Debt Elimination 2

The First Step To Debt EliminationRegardless of your personal and financial circumstances, your education and your background, the chances are the first step you need to take... Read More

How To Pay Credit Card Debt Off

If you are determined to pay credit card debt off you are making the best financial decision of your life. The reason credit card debt is so... Read More

New Bankruptcy Law Will Not Protect You from Identity Theft

Recently passed by Congress with overwhelming support, the oddly-named Bankruptcy Abuse Prevention and Consumer Protection Act was designed to eliminate "bankruptcy of convenience." The perceived problem is... Read More

Is It Possible to Be Sued For My Debts?

It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. The likelihood of being sued or having your... Read More

Bankruptcy - The New Scarlet Letter

Nathaniel Hawthorne's book The Scarlet Letter states in Chapter 2, "On the breast of her gown, in fine red cloth, surrounded with an elaborate embroidery and fantastic... Read More

Tips To Take Control Of Debt Collection

Yes, debt collection tips can help. You may think you have no power when the debt collector comes calling, but think again! Creditors don't like losing out... Read More

Assess Your Financial Attitude and Eliminate Your Debt Forever

Want to know if your attitude towards your finances is helping you or damaging your future? Take this Quiz and find out...I consider myself out of debt... Read More

What is Debt Settlement and How Does it Work?

Debt settlement involves negotiating with a creditor or creditors to pay off a percentage of your total debts at an agreed upon settlement amount. Often, people choose... Read More

Eight Ways to Consolidate Debt

Next to winning the lottery, a debt consolidation loan is a debtor's dream. With one monthly payment and a fixed monthly payment schedule, you can actually see... Read More

How to Deal with Bill Collectors

So you've screwed up. You're drowning in debt. Maybe the credit card was burning a hole in your pocket and you just had to get the HDTV.... Read More