Student loans are often regarded by many Wisconsin residents as one of the most difficult debts to repay. There are various factors that can contribute to a student loan becoming a bad debt. Many residents do not get a job right after graduating from college, especially in cases where their degrees are not in especially marketable subjects. In those cases, student loans become an added financial challenge, which often has the potential to force the debtor to declare bankruptcy.
Many Wisconsin debtors who have student loans to pay off consult legal professionals as well as debt relief agencies in order to be able to choose one of several debt repayment plans that are available in such cases. However, it must be noted that in some cases, the debt relief agencies are fraudulent and misrepresent information to the debtors, thereby compounding the debtor’s financial situation.
Experienced lawyers who work with bankruptcy and debts can often assist such debtors who not only have to deal with their debt but also with the fraudulent debt firms and agencies.
It is important for the debtor to understand that although student loans may be difficult to pay off in a bankruptcy proceeding, it is possible for that debt to be discharged by the court if the attorney can prove that the student loan has caused the debtor undue hardship.
Student loan repayment plans usually have a grace period, which is longer than the due date on the documentation. If the debtor pays the minimum amount due on the student loan during the grace period, even if it is after the due date, the debtor might not be liable for late fees and penalties.
Source: Huffington Post, “CFPB says student loan servicers lie about bankruptcy discharge,” Steve Rhode, May 21, 2015