Can I Help my Children get Student Loans if I File Bankruptcy in New York City?
Filing for bankruptcy in New York City is a big decision already. Many of our clients are concerned that the consequences of their bankruptcy could extend to their children in some way, and we are asked a lot if bankruptcy will somehow prevent our clients from helping their children with student loans in the future. Fortunately for our clients student loans are quite different from other loans and your student loan application will likely not be affected if you file for bankruptcy.
Student loan debt is one of the few types of debt that is not generally dischargeable in bankruptcy. You cannot eliminate student loans as easily as medical debt, credit card debt and personal loans through the bankruptcy process. Most people successful in bankruptcy will still be on the hook for their student loans. Because these loans are so difficult to eliminate student loan agencies are generally unconcerned by applicants with a bankruptcy in their past. They know that a future bankruptcy will not affect the repayment of their loan.
What many of our clients don’t realize until after they have come into our office is that filing for bankruptcy can often times help with the burden of student loan payments. Bankruptcy won’t affect your ability to acquire student loans, but it can also help pay for student loans by eliminating vast amounts of your other debts. With no credit card or medical bills to pay, monthly student loan payments become more affordable. If you file a Chapter 13 in particular you will not even have to begin repaying your loans for 3-5 years from the time you file, however your co-signing children will need to continue making any payments they are responsible for during this time. If you need new student loans during this time period proof of your bankruptcy filing will usually be sufficient to secure additional funds. With all of your toxic debt eliminated your credit score will also begin to improve again in about 15 months restoring your overall financial situation as well. Unlike a Chapter 13, if you file for Chapter 7 you will need to continue making your regular student loan payments, as will your children that may be co-signers on the loan but Chapter 7 has its own benefits that might still be right for your financial situation.
If you are struggling to make ends meet, and need to find a way to get the student loans your children need it will probably be helpful to speak to a bankruptcy attorney. Filing for bankruptcy will often improve your chances of receiving student loans and your ability to comfortably repay them in the future. Your child’s education can be secured while you eliminate the toxic debt that has had you worrying about helping pay for their education in the first place. If you would like to learn more about how bankruptcy can help with student loans and live in New York City please contact the Law Firm of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today. We only practice bankruptcy law and have a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.
This article is for educational purposes. By reading no attorney-client privilege has been created.