Student Loans and Bankruptcy for Brooklyn Graduates

Student loans are becoming increasingly problematic, despite the introduction of income-based re-payment plans. While those who are unable to pay their student loans may be a relatively small group, they are still unable to manage the debt incurred from receiving an education.


According to the Federal Reserve Bank of New York, the 90-day delinquency rate for student loans is continuing to increase, even after reaching 11 percent in mid-2013. While student loan delinquency rates are increasing, other types of household debts – including mortgages, auto loans, and credit cards – are falling.


But even with the increasing percentage of delinquent payments, about half of all student loans are not in repayment, due to still being in school, deferment, or forbearance. According to a study done by the New York Times, many of those who are making payments on their student loans are doing so on income-sensitive repayment plans, meaning the amount owed is directly proportional to the income the debtor is making.


It is unclear why so many suffering under the weight of a substantial student loan are opting to default rather than utilize the income-based repayment programs. With what we can infer to be less than one half of all student loans being repaid properly, those choosing to use an income-based repayment plan most likely have higher balances are looking for alternatives for defaulting or declaring bankruptcy for loans that will never be repaid in full.


Chapter 13 bankruptcy has advantages to those looking for relief from their student loan debts. If you, like many others, are unable to repay your debts and an income-based repayment program cannot help, then filing for bankruptcy may be able to help you out.


Don’t allow your student loan debt to continue to accumulate. Contact a Brooklyn bankruptcy lawyer to see if filing Chapter 13 bankruptcy is right for you and your situation.


For questions about filing for bankruptcy, please contact an expert Brooklyn bankruptcy attorney at Michael F. Kanzer & Associates, P.C. We have helped hundreds of individuals discharge their debts by providing our clients with expert protection against Chapter 7, Chapter 11, Chapter 12, and Chapter 13 bankruptcy for more than a decade.


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