Fort Lauderdale Bankruptcy Attorney Explains Long-Term Effects of Defaulting on a Student Loan.
There are many long-term effects of defaulting on a student loan. A Fort Lauderdale bankruptcy lawyer in Broward County explains how it can It can have a serious impact on your future.
Defaulting on a Student Loan
Neglecting the payments on your student loan or ignoring the lenders who call you can result in default. This can occur anywhere between 270 and 360 days of nonpayment.
You may feel like you have a good reason for defaulting on your loan. It could be that you are unable to find a job in the field you studied, or any job for that matter. It may be that you never finished school.
Some individuals mistakenly believe that later on they can file for bankruptcy and get rid of their student loan debt that way. However, it has become nearly impossible to erase student loan debt through bankruptcy.
That’s because there are strict requirements that must be met. Even if you do manage to meet these requirements, which isn’t very likely, you will still end up having to pay off at least some of your loan.
No matter what your reason may be or how you think you can eventually see your loan discharged, you cannot walk away from a student loan. If you decide to, there are long-term consequences you will face.
Long-Term Effects on a Student Loan Default
Here are some of the potential long-term effects of defaulting on a student loan:
- unable to join the Armed Forces;
- collection agency may take over your loan;
- if you hold a professional license, you may not be able to renew it;
- could be responsible for additional costs in the attempt to collect on your loan, such as attorney fees and court costs;
- denial of subsidized interest benefits;
- lawsuit may be filed against you;
- ineligible for deferments;
- wage garnishment;
- additional federal financial aid won’t be given until loan is repaid or some type of arrangement is made to pay in installments;
- state and federal income tax refunds could be confiscated; and
- if you receive Social Security disability benefit payments, these may be withheld.
In the end, you could not only face these consequences but you will still owe the money.Alternatives to Defaulting on a Student Loan
The good news is that there are alternatives. If you absolutely cannot pay your loan off, you may be able to defer payment. For a set period of time, the principal payment of your loan can be postponed.
Another alternative is forbearance. Your payments may be reduced or postponed, however the interest charges will continue to grow. You aren’t automatically guaranteed either of these options. However, it may be worth looking into and is certainly a better way of handling your student loan debt than defaulting on it.
Contacting a Fort Lauderdale Bankruptcy Attorney
When you owe money, there is the possibility of it being discharged through bankruptcy. The team of bankruptcy attorneys at the Neustein Law Group, P.A. serves residents of the Miami-Dade County, Broward County, Palm Beach County and other areas throughout the state of Florida.
A Broward County Bankruptcy attorney can help you determine if bankruptcy is for you. They may even be able to help avoid the necessity of filing for bankruptcy. To learn how an attorney may be able to help you in your dire financial situation, contact us today: (954)-606-0747 (Broward Office), 888-400-ATTY (2889) (Toll Free) or 305-531-2545 (Direct Headquarters).