“Dear Steve,
I have a private student from a bank at a very high interest rate(8.25)%. I made few payments but lost my job, now I am doing a job at half my previous salary. I dont have enough income to support my kids and pay the loan as well. The bank says refinancing is not an option.
Can i file for bankrupcy or bailed out(just like banks or like Greece) from my debt?
Josh”
Dear Josh,
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
Yea, that’s not going to happen.
Private student loan debt is probably one of the worst types of debt to own. Unlike government backed debt where there are flexible repayment options, private student loans don’t generally offer those.
You can’t generally discharge student loan debt in bankruptcy either.
You’ll just have to pay what you can afford and each month the shortage will build additional fees, penalties and interest to the balance. The balance will grow.
People with other debt find themselves declaring bankruptcy not to discharge the student loan debt but to make room for student loan payments.
Please post your responses and follow-up messages to me on this in the comments section below.
