Chapter 7&13, means the bankruptcy court controls your debt repayment

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Take Control of Your Student Loan Debt (Paperback) Bankruptcy:

1. Many former students consider filing for bankruptcy to get rid of their student loans. Filing for bankruptcy seldom forgives you from paying your student loan. The student loan is guaranteed by the government and the debt is usually not dischargeable. Before 1998, you get rid of student loan debt by filing bankruptcy, but Congress eliminated the seven year limit to debt forgiveness. If you can show extreme hardship to the bankruptcy court rare exceptions may be made for debt forgiveness. Undue hardship is defined as, your present income is not adequate to pay the loan payments and your potential earning will not change the situation. Poverty or Health handicaps could cause this situation. The courts do not define what is undue hardship, so the rule may be very subjective.
2. Most courts have held that a school must release college transcripts upon the act of filing bankruptcy.
3. Bankruptcy is not a process by which the court has your debt erased. To fill out for Chapter 7 bankruptcy, you fill out a two page petition and several forms describing your money, property, expenses, debts and income. Most states let you keep clothing, house furnishings, an inexpensive car, social security payments. A few states let you keep your house.
4. Chapter 7 bankruptcy puts into effect an automatic stay. The automatic stay stops your creditors from trying to collect what you owe them. The bankruptcy court is in control of your case file. The bankruptcy court is in legal control of your debts and the property you own, except for your exempt property. Nothing can be bought or sold without the permission of the court. You must obey the bankruptcy rules and conform to advise by the bankruptcy trustee. The trustee's primary duty is to make sure the creditors are paid.
5. If you pledge property for a debt, this is called secured debt. In most cases, if you default on the debt you will have to surrender the collateral or make arrangements to pay for it during or after bankruptcy. The creditor can record a lien on the property, claiming a financial interest in the property.
6. If you change your mind and want to dismiss the bankruptcy case , you can ask the court too dismiss your case. The court will decide whether to keep or dismiss your case. The court looks to see, if you have done harm to your creditors.
7. At the end of chapter 7 bankruptcy, your debts that are qualified are wiped out. You no longer legally owe these creditors.
8. Most student's seeking bankruptcy are forced into Chapter 13, reorganization bankruptcy, a more expensive option. In Chapter 13, you discharge most debts by paying all or a portion of them over period of time. If you have a regular income chapter 13 may be a good option. The minimum amount you must pay is equal to the value of your nonexempt property. You make payments for three to five years. In addition you must pledge your disposable income - net income less expenses. Chapter 13 stops your creditors from taking further action against you. During Chapter 13, interest and collection costs stop accruing, including wage garnishments, tax refund interceptions and lawsuits. In Chapter 13, you specify a plan on how your creditors will be paid. You will need to separate into classes the type of creditors and the priority of who gets paid first. One suggestion to pay all the unsecure debt an equal percentage.
9. Don't file for bankruptcy automatically. If you health keeps you from working and paying your student loans, you may qualify for a loan cancellation directly from the holder of the loan.

Loan Repayment Options:

1. You will be required to pay off your student loans. You may be able to postpone payment for a time, but after a maximum of three years deferment, the loan grind will resume.
2. Private loans offer fewer repayment options.
3. Your loan can be sold on the secondary market.
4. The best advices is, pay your loan off quickly.
5. Stanford loans have a repayment time period of ten years.
6. Standard repayment schedule or accelerated repayment have the lowers resulting interest accumulation. Other options and include higher interest accumulation. The gradual play start with a lower payment and increases every two to three years. The gradual plan ranges from ten plus years. The extended repayment plan, stretches your repayment time period to 12 to 30 years, resulting in an amazing amount of paid interest. The extended plan should be consider criminal in its oppressive interest burden on the unsuspecting victim. Extended repayment plans are available for most federal loans, PLUS loans, and Stanford loans. The Income contingent loan bases the monthly payment on annual income, family size, and loan amount.
7. Consolidation reduces your monthly payment, increase repayment time period, and compounds total payout.
8. If you borrow 20k, at 6%, $222 monthly payment for ten years, 6k interest paid . $20k borrowed at 8%, $243 monthly payment and 9k interest paid. If you borrow $50k at 6% for ten years, expect a $555 month payment and 16k interest paid. Borrowing $50k at 8% for ten years results in a $607 monthly payment and $22k in interest paid. Borrowing $100k at 6% for ten years results in a $1,110 month payment and $33k interest paid verses 8% and a $1,213 month payment with $45k interest paid.
9. Lenders are adapting to the rising number of student defaults.
10. Flexible payment plans are deceptively accommodating. Always make sure you get the total interest paid numbers from the loan officer.
11. Balloon payments are the most dangerous type of loan.
12. Earnings based adjusted loan reduce monthly payments, but extend the loan duration and charge more interest paid.
13. You can't run from your loans. If you default the Department of Education will get them and if it fails to gather monies, it will be given to a collection agency which will tack on 28%.
14. Extended Repayment plan: Suppose you owe $10k at 8% and extend to 15 years. Your cost of the loan will be $17k verses $14k.
15. Income contingent loan: You go to law school and borrow $55k at 8.25% and after graduation earn $24k. Your initial payments drop from $603 monthly bill to $271 monthly bill. By the end of the 25 year repayment period, your payments have returned to $603. You pay $146k verses $75k for standard.
16. Consolidate loan: You borrow $49k at 8.25% expecting a $600 month bill. The consolidated loan lowers your monthly bill to $411 per month. Over the next 25 years your total payout is $123k verses $90k.