Q. I am barely able to make my student loan payments and I have heard that they may cancel some debt? I don’t want to ruin my credit, but I really can’t afford it. I’m unemployed and my benefits are about to expire and I don’t want to have to file for bankruptcy. What should I do?
– In trouble
A. Unfortunately, it is not uncommon to crush student loan debt.
There are several steps to approach this.
First, you need to determine if the loans are government or private, said Karra Kingston, Union City bankruptcy attorney.
“When it comes to federal loans, you may be able to get an income-based repayment plan where you only have to repay a percentage based on your income,” she said. “When it comes to personal loans, refinancing can be an option.”
It has not yet been conclusively clarified whether or not student loans could be waived by law, she said.
If you can’t pay your student loan because you have other debts, bankruptcy may be your best option, Kingston said Repayment Plan.
But remember, student loans aren’t really excusable in bankruptcy, Kingston said.
“The only way is to show that there is an undue hardship that is very difficult to do, but there have been a few cases where people have been laid off,” Kingston said. “Chapter 13 bankruptcy can help you pay off your student loan arrears over time.”
Send your questions by email to [email protected].
Karin Price Müller writes the Bamboo led Column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly e-newsletter.