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Archive for the ‘Federal Student Loan’ Category

Texas Ranks as a Best State for Student Debt Among the $1.12 Trillion Owed Nationwide

November 4th, 2014 at 12:59 pm

According to a recent study by WalletHub, the state of Texas ranks as number nine in the list for the “best” student loan debt. WalletHub analyzed all 50 states (including the District of Columbia) using 7 key metrics, including average student debt, unemployment rates, and students with past-due loan balances.

Though nine out of 51 may be good news for the Lone Star State, the rest of the country is not doing as well. As of June 2014, the Federal Reserve Bank of New York, total outstanding student loan debt stood at $1.12 trillion, an increase of $7 billion from 2013.

According to the WalletHub study, though the risk of joblessness declines with the more schooling you have, location also has a large effect on college debt levels. This means that if you live in a city or state where the economy is booming, you are more likely to pay off your student debt on time, without penalties.

While Texas continues on the up and up, other states in the bottom, including Massachusetts (30), Washington D.C. (41), and Rhode Island (51), continue to suffer.

In May 2014, Massachusetts Sen. Elizabeth Warren proposed a bill to allow students to refinance their loans at a lower interest rate called the “Bank on Students Emergency Loan Refinancing Act.” The Democratic senator and her party argued that the $1 trillion in student loan debt is harming the U.S. economic growth and that something must be done to alleviate it. Unfortunately, in September, Republicans opposing the bill struck it down. The Act would have allowed more than 25 million students to refinance their loans to today’s lower interest rates of less than four percent.

For now, it does not seem like student loan debt in any state will be alleviated anytime soon. With the political battle constantly stalling bills able to assist student loan debtors, the educated middle class will only continue to suffer.

If you or your college-aged son or daughter is suffering from crippling student loan debt in Texas, contact an experienced San Antonio bankruptcy lawyer. Attorney Chance M. McGhee can help you determine which bankruptcy option may be best for your individual situation. Call 203-342-3400 for a free consultation.

The Link Between College and Credit Card Use

February 28th, 2014 at 12:15 pm

college, credit card card, debt, bankruptcy For many families, education is one of the biggest investments that parents will make for their children’s future. Even when some steps are taken to plan for this costly life goal, some expenses can creep up, leading parents and students to rely on credit cards to help. When credit card debt grows out of control, sometimes bankruptcy is the only option to get a fresh start.

According to Sallie Mae, between 3 and 5 percent of parents used credit cards to help pay for educational expenses for the years 2009-2013. In 2013, the average college student spent about $3,156 on their own credit cards, too. Whether it’s tuition, books, transportation, or other expenses, this credit card usage can add up.

When parents are already strapped for cash, they might get stuck only being able to make the minimum payment on their own credit cards. For students, often new to the credit card game and often with a very limited income, credit cards can add on to a massive amount of debt on graduation when coupled with student loans.

With some families, relying on that credit card for extras or emergencies is the only way to make it through an expensive venture like college. If there’s not a plan in place for repayment or if a family member loses his or her job, however, debt can spiral out of control fast.Relying more and more on credit cards can put both parents and students in a difficult financial situation, making it difficult to climb out and get a fresh start.

If your family has been affected by an increasing reliance on credit cards while one or more students was working towards a college degree, you might feel trapped by more debt than you can handle. Contact a Texas bankruptcy attorney today if you need to start over.

Bankruptcy and Federal Student Loans

February 7th, 2014 at 3:50 pm

federal student loan IMAGEA rising number of recent graduates are finding themselves buried in student loan debt. Sadly, sometimes this situation leads to other types of debt. Trying to make monthly student loan repayments, you might find yourself relying on a credit card to help you purchase necessities like groceries. This chain of events might make your financial situation very serious, leading you to consider bankruptcy. If you’re considering bankruptcy primarily because of student loan debt, there are a few things you need to know about how student loans are treated in bankruptcy court.

You might be able to discharge your federal student loan debt in bankruptcy, but this does not apply to every case. You have to prove to the court that repaying those student loans would result in undue hardship. This generally happens through an adversary proceeding in your bankruptcy court, and the following three criteria must be met:

  • court has to see that paying your loan would keep you from a minimal standard of living;
  • that your financial situation outlook appears like it will continue for the length of loan repayment; and
  • the court wants to see that you have made efforts to repay the loan before heading to bankruptcy court.

You have to demonstrate all three of these factors in order for your loans to be completely discharged. If your discharge is approved, all collection activity on your federal student loan account will stop.

If you are finding yourself overwhelmed by the monthly student loan repayment, you need to speak with a legal professional to get advice on your next steps. It’s highly recommended that you work with an attorney for your bankruptcy case so that you know what to expect and so that you are fully prepared.

When you’re already buried in the pressure of trying to manage a stressful financial situation, an attorney can be very helpful in getting your case dealt with efficiently and effectively. Contact a Texas bankruptcy attorney today.

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