Will Your Student Loans Lead to Bankruptcy?
Receiving a college education is one of the most important – and expensive – life goals to accomplish. However, overwhelming debt often becomes the high price of education. In the current economic climate, jobs are harder and harder to come by. Young adults today face thousands of dollars’ worth of debt, with no way to pay it back. If you are having severe financial problems, it may be time to contact a Reno bankruptcy attorney.
According the National Center for Education Statistics, the average tuition fee for a four-year private university was $32,184 for the 2009-2010 school year. For a public, four-year university, the costs were around $12,804 per year. In 2010, college graduates who took out loans owed an average of $25,250, 5% more than the class of 2009 owed, according to a report from the Institute for College Access & Success’ Project on Student Debt.
Unfortunately, student loans are a type of non-dischargeable debt that cannot be eliminated or consolidated under Chapter 7 or Chapter 13 bankruptcy in Reno, Nevada. This means, even if you filed for bankruptcy, you would still be required to pay your loans back. The only way to become relieved of student loan debt is to prove “undue hardship” in a court of law. Proving undue hardship is extremely difficult and undoubtedly requires the assistance of a bankruptcy attorney.
The Student Loan Forgiveness Act of 2012 is a piece of legislation that would overhaul the federal student loan system. If passed, the Act would keep federal loan interest rates at 3.4% indefinitely. Those who take out student loans would only make payments based on 10% of their income. Former students who are part of the Public Service Loan Forgiveness program would be able to have their debt dismissed after five years. Finally, the Act gives borrowers the chance to consolidate private loans into federally owned loans.
If you are having trouble paying back student loans or debts in general, contact the Darby Law Practice, Ltd. We are an experienced law firm dedicated to helping individuals and families rebuild and restore their finances.