Chapter 13 bankruptcy has become an attractive solution for those facing student loan collection including garnishments. While student loans are still not dischargable, collection can be halted for up to 60 months while in a chapter 13 bankruptcy plan. Chapter 13 plans allow debtors to postpone student loan collection by pledging to pay their disposable monthly income, or what they can afford, into a chapter 13 bankruptcy plan. This buys consumers time, but is not a permanent solution since the loans will not be discharged.
At the end of the Chapter 13 plan student loan collection can resume. The goal is to have a change in circumstances that will allow the borrower to afford their student loan payments after bankruptcy. However, if this is not the case, the option to file a new bankruptcy case is available. By the end of the plan laws could also change that give student loan debtors more repayment or forgiveness options.
The Chapter 13 bankruptcy also allows protection from other creditors while in the plan. It consolidates all debts into one affordable monthly payment while stopping all collection. This allows debtors to get their finances back on track while relieving the stress caused by harassing debt collectors. Although the Chapter 13 will not discharge the student loan debt it will give borrowers the breathing room they need to financially provide for their families.
If you have questions regarding bankruptcy in Indiana please contact Jackson & Oglesby Law at (877) 489-0908 or visit us at www.IndyBankruptcyLaw.com. We are experienced bankruptcy attorneys and can help guide you through the entire bankruptcy process. Call us today to schedule your free consultation.
