Numerous Texas residents pay their way through college with student loans. While in school, most of them had dreams of making enough money to support themselves and repay their loans without a problem. Then, reality set in, and they realized that paying for those loans is not as easy as they thought, and perhaps were told, that it would be. Most people are told that filing a Chapter 7 bankruptcy does nothing for student loans, but that may not always be the case.
Before filing for bankruptcy, many Texas college students look into alternatives. They may get into a debt repayment plan that allows them to make lower payments or no payments for a specified period. It does take a significant amount of time of not making payments before a student loan is considered to be in default. Even so, student loan companies can report delinquent payments as soon as 30 days after nonpayment.
An individual’s credit would see an immediate impact. A delinquent status can be removed after a person makes six consecutive payments, but the damage is already done. A deferment or forbearance could delay payments for a time, but it is not a long term solution. It may turn out that some people need a better solution.
Even though discharging student loans can happen through a Chapter 7 bankruptcy, more often than not — at lest under current law — filers will still need to repay that debt after the conclusion of the proceedings. However, getting rid of other debt could help free up monetary resources so that payments on student loans can resume. Before embarking on this process, those considering it may want to gain a better understanding of what is involved and learn how to use it to the best advantage possible.