“Dear Steve,
I have 150K in student loans from Sallie Mae. I borrowed only 100, but 50K is interest. My current loan payment every month is 1000.00 and that is JUST interest. I have called and called them to try and get a lower monthly payment, and the only thing they will do for me is make them interest only payments for about 2 years. The interest only payments are still $1000.00. I cannot afford this payment. I am even living at home with my parents right now, and I still can’t swing 1000.00 loan payment. I only make 1800 a month.
I was reading on your site about how someone filed Chapter 11 bankruptcy and claimed undue hardship because Sallie Mae did not offer any kind of income contingent repayment plans. Is this true? I know you can’t typically file bankruptcy on student loans, but I have heard recently that if it is really causing you undue hardship then some judges will help. Do you know the best way to go about this and who to contact?
Stephanie”
Dear Stephanie,
A chapter 11 bankruptcy is a possibility but only works in extreme cases. And a chapter 11 bankruptcy can be very expensive to file.
You can click here to find a local bankruptcy attorney and discuss this situation and option with them. Really it will come down to local rules and how the bankruptcy court in your area handles these requests so a consultation with a local bankruptcy attorney makes the most sense.
There is talk now to reinstate the bankruptcy provision for private student loans that was taken away by Congress in 2005. However, if the republicans win during this next election I would bet that a repeal on the nondischargeability of bankruptcy loans would be very remote.
If the loan was government subsidized you’d have some really great options to deal with it. Because it is a private loan, you just don’t.
Please post your responses and follow-up messages to me on this in the comments section below.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
- Lexington Law Credit Repair Gets Hammered in Lawsuit Settlement. If You Sell Credit Repair – Wake Up! - August 28, 2023
- People That Got Scammed by Robocall Debt Relief Company Life Management Services of Orange County to Get Money Back - July 7, 2023
- Consumers Charged Illegal Student Loan Relief Fees to Get Some Scratch Back - July 7, 2023
If I get a loan to payoff the student loans can I then declare bankruptcy and have the new loan dismissed?
It all depends how many years you have the loan before you file. Talk to a bankruptcy attorney about this.