Student Loans

August 7, 2017

Student Loan Debt Relief

Are you overwhelmed by student debt payments? If you have realized that you cannot keep up with your loan payments because of other financial obligations, unemployment, or unemployment you may be looking for options. Rising tuition costs, the soft job market, and higher interest rates have made student loan debt harder to manage for many college graduates.

If you cannot find a job with adequate income to cover your living expenses and debt, you should contact our firm. We may be able to negotiate for lower payments or lower interest. We may be able to eliminate some of the debt for you.

Whatever option you choose to deal with student loan debt do not simply stop making payments. Defaulting on a student loan brings a variety of negative consequences. Most importantly, your credit score will be reduced drastically. That lower credit score will translate to higher borrowing costs, problems renting an apartment, and more negative consequences.


Financial Options:

You have three options for heading off default, if finding an additional source of income is unrealistic:

1. Ask for a forbearance
2. Ask for a loan deferment
3. Contact a lawyer to negotiate new terms

Student loan debt generally cannot be discharged in bankruptcy so this is only an option if you have other unmanageable debts on top of the student loan.

If you think you may be in danger of default, please contact our offices as soon as you can.


Consequences of Default:

A private student loan is like other unsecured debt because the lender has the right to sue if you default. These loans are like credit card debt in the sense that defaulting on either is a breach of contract with the creditor. Whether a private lender or a government lender made the loan, they will attempt to collect the loan balance.

Most college graduates who have student loan debt have loans guaranteed by the federal government. If you default on one of those loans, the federal government will come after you to recover the unpaid balance. They might garnish your wages, take your tax refund, or take away your federal benefits. You can also be sued. It can be almost impossible to escape these consequences and restore your good credit without expert legal counsel. Federally guaranteed student loans cannot be discharged or reduced by bankruptcy.

Contact our law firm at 212-349-6400 if you are worried about keeping up with your student loan payments.

Attorney Katz can be reached at (800) 251-3529