Here in West Michigan we are surrounded by colleges, between Grand Rapids, Lansing, and Kalamazoo we have over a dozen different colleges and universities. That means a lot of students, and a lot of student debt. A recent study in USA Today claims that outstanding student loan debt now surpasses outstanding credit card debt in the United States. As of late 2011, the country owed a collective $850 billion in student loans and only $828 billion on credit cards.
The study goes on to discuss the repayment numbers that many people are facing and the outlook is often bleak. The average person carrying student loans owes $30,000. At an interest rate of 6.8%, the borrower will end up paying $350 per month for ten years. US Today says that, at this level of debt, the average person would need to earn at least $42,000 per year.
We often see clients who owe far more than $30,000 in student loans. Many of our clients have debt from undergraduate and graduate studies and can owe upwards of $100,000. Even in a good economy, those numbers are unsettling. With so many people losing jobs and others working for less than what they expected to earn, staying current with a student loan can be tough.
The bad news is that student loan debt is usually not dischargeable under current bankruptcy laws. Judges usually rule that only serious, life threatening medical conditions fall into that category. So, in most cases, you will be expected to pay your student loan debt, even if you file for bankruptcy.
At The Law Offices of Jeffrey D. Mapes, we will work with you to figure out the best way to handle your student loan debt when filing bankruptcy. There are several different repayment plans, including deferment and lengthening the life of the loan, that can lower your payments and allow you to stay current on your bills while rebuilding your financial base.
If you are drowning in credit card or student loan debt – or any other type of debt, call The Law Offices of Jeffrey D. Mapes to schedule a free consultation. Our staff will help you decide if bankruptcy is the right option for you and help you get on the road to financial freedom.