Is There Any Way To Get Rid of Student Loan Debt?

If you're currently worried about defaulted student loans, don't, because you're not alone. After college, it's easy to push student loans aside as many other expenses begin piling on quickly, such as rent, health insurance, car payments, etc.

Student loans can get you into a quick financial hole quickly, even if they don't seem as important as other bills you are paying. Getting behind on payments toward your defaulted student loans can end with bill collectors harassing you, lawsuits, judgments and even your wages being garnished or your bank account frozen. In many cases, they can take future tax refunds you may be getting.

If you are in this situation you are probably wondering what your options are. Some common questions of defaulted student loans are: should I file bankruptcy, or how do I stop bill collectors from calling me?

When you miss payments on your student loans, you are given another opportunity to pay off the loan, which is a rare occurrence. This process is called "rehabilitation" and many bill collectors don't want you to know about it, so they may play dumb.

When you rehabilitate your student loans, you have the option to follow a short term payment schedule. If you pay the loan in full, it's taken out of the hands of bill collectors, which also stops the constant calls from the collection agencies. They try to keep this process quiet because every time a collection agency goes through it, they lose the 25% bounty they would've received if the full loan amount was collected.

If you are interested in "rehabilitation" of your student loans, call your debt collector, if they cooperate, you probably don't need a lawyer. In order to successfully rehabilitate, you need to make 9 full payments over a 10 month period, and if you fail to do so, you could be in trouble. It is difficult to get your student loans discharged by filing bankruptcy.Serious undue hardship must be proven, which means repaying your student loans will cause you and your family to live below the minimal standard of living. You better have stopped breathing to prove undue hardship, it is very difficult to use this to discharge your student loan debt.

Filing for bankruptcy may not be the right decision if most of your debt includes defaulted student loans, so you may not even need a lawyer. On the other hand, if they consist of only part of your larger financial debt, filing for Chapter 7 bankruptcy may help you towards a fresh start. Before you speak with any bankruptcy lawyer, sign any forms to agree to consolidate your debt or talk to any bill collector, you need to gather information so you can arm yourself with the right questions to ask before you make a decision you later regret.


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Missouri Bankruptcy attorney James Brown has been working to relieve the debt of American families for over 15 years. He has dedicated his career to educating consumers about options for debt relief and has released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." Click the link to download your FREE copy!