Student Loan Debt Relief FAQ’s

Though challenging, it is possible to discharge student loan debts through bankruptcy. You must show that repaying student loans presents an “undue hardship” to you and any dependents. Furthermore, you must file either Chapter 7 or Chapter 13 bankruptcy, along with an adversary proceeding.

There are 3 methods of curing student loan defaults:

  • Student Loan Settlement: Immediate payments to cure the student loans that are delinquent.
  • Student Loan Rehabilitation: 9 consecutive monthly payments equal to 15% of the borrower’s discretionary income to remove a loan from default.
  • Consolidation and Income Driven Repayments (IDR): Student loan payments are calculated based on what borrowers can afford, rather than what they owe. The repayment plan typically lasts 10-25 years.

Student loan debts can pose a challenge to getting a mortgage as it increases the debt-to-income ratio, but they aren’t any different from other types of debt. Taking steps toward reducing your student loan debt can put you in a better position to manage your mortgage payments. Building credit and improving your credit score also helps you obtain a mortgage at a lower interest rate.

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