How to Avoid Defaulting on Student Loans After Job Loss

You could suffer far-reaching and devastating consequences if you default on your student loans. Your balance will become due immediately. You could face thousands of dollars in fees, damaged credit scores and wage garnishments. These are only a few of the many consequences that may result from a student loan default. Job loss is a common reason why people default on their student loans. After a job loss, many people find they are unable to make payments. Fortunately, there could be several options that may help you avoid a student loan default until you can find another job. Enroll in an income-driven repayment plan. If you have federal student loans, then you may be eligible for an income-driven repayment plan (IDR plan). These are plans that limit your monthly payments to a percentage of your household income. If you do not have income, then you could owe $0 a month until you recertify your income with a new job. Income-driven plans are not available for borrowers with…

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