Student Loan Attorney

Trusted Legal Counsel During Challenging Times

It can be easy to fall behind on your student loan payments, especially if you are a struggling new professional in your chosen industry. Many people know that there are consequences for falling behind on payments, but sometimes the damage that can be caused can have greater impacts than we would like to believe. Sometimes, however, the consequences imposed on people are unlawful, and it may be in your best interest to seek the help of an attorney to fight these violations.

What Happens If I Fall Behind on Student Loans?

These are some of the most common consequences that you could face when you fall behind on student loan payments:

• Wage Garnishment: The government can step in and garnish your wages, taking money out of each of your paychecks. This can severely impact your livelihood and make the payment of other bills all the more difficult. Unfortunately, the government can do this without ever taking the issue to court.
• No Tax Refund: Undoubtedly, the best part of doing taxes is getting a tax refund. However, if you fall behind on student loan payments, you may find that your tax refund never reaches you; your tax refund may be intercepted to cover delinquent payments.
• Collection Fees: In addition to having your wages garnished and your tax refund taken, you may also have collection fees tacked on to your balance.

These repercussions can have lasting effects on your financial security. It is important that you do what you can early on to ensure that you do not face wage garnishments or seized tax refunds, and that you do not end up paying more than you have to for your education. Seeking the assistance of an attorney before you lose control of the situation can save you time, energy, and money.

Can Student Loans Be Discharged in Bankruptcy?

Normally, student loans are not dischargeable in bankruptcy. It is not only a very difficult process, but near impossible. But there are limited circumstances in which an individual can sue the student loan lender in bankruptcy court (called an adversary proceeding) and prove financial hardship.

There’s no specific test to prove financial hardship, but considerations taken by the court are as follows:

• If repaying the loan would force you to maintain a less than a minimal standard of living.
• If your hardship will last for most of the loan repayment period.
• If good faith efforts were made to repay the loan before filing bankruptcy.

Courts and judges may differ on whether these considerations are met or not, and the student loan company has the opportunity to challenge each of these. Individuals can expect a long lengthy adversary proceeding with additional fees and costs due to the litigation involved. The bankruptcy and discharge will also be prolonged and delayed until there’s a decision on the student loans.

Non-Bankruptcy Options for Student Loans

If bankruptcy is your last resort, there are other options available to help manage your student loan debts.

• Refinancing. Refinancing is an option on student loans if a new lender is willing to take over the loan.
• Consolidation, deferment, and forbearance are other options that may reduce or push back your payments.
• Reduced monthly payments and interest rates based on your financial situation and economic hardship can also be options.

How Our Attorneys Can Help with Student Loan Debts

Working with a professional can help ensure that your situation receives the best possible outcome. When you work with our student debt lawyers, we can guide you in the following ways:

• Explore your options. If you seek assistance early enough, an attorney can help you explore alternative options, including income-based repayment plans.
• Reduce overall debts. Our attorneys work to minimize your payments to a manageable rate, and even work to reduce the amount of your loans entirely.
• Legal guidance throughout the process. Navigating student loan plans, default and bankruptcy options, and wage garnishments and other negative repercussions can be stressful, but having a professional working with you will hopefully give you some peace of mind about your situation.
• Defend against abusive creditors. We can help you fight back against the seizure of your wages and the often-relentless advancement of collections officers. It is difficult to respond to the abuse of collections agencies, and you may wish to seek a lawsuit against such agencies under the Fair Debt Collection Practices Act, which was enacted to protect consumers from unfair practices subscribed to by debt collectors.

Whether you are trying to prevent further financial hardship or fighting against an abusive collection agency, contact our offices today to schedule a consultation. Our Los Angeles student loan attorneys are experienced in protecting and guiding customers in regards to their debt; we can help you with your student loan, and can advise you on the steps you should take both now and in the future with regards to your student debt.