Student Loans

An Overview of Student Loans in Memphis

It is not unusual for someone to come into our office owing more than $100,000 on their student loans. Can a bankruptcy include student loan debt? Most student loans are non-dischargeable in a bankruptcy but a Chapter 13 bankruptcy usually stops collection efforts and garnishments.

Student loans are considered general unsecured debts. In a proposed Chapter 13 bankruptcy plan filed in the Bankruptcy Court for the Western District of Tennessee, Debtors are often allowed to pay as low as 10% towards his or her unsecured debts (the proposal of a lower percentage than 10% will likely be met with an objection by the Chapter 13 Trustee).

This means that if you have $100,000 in student loan debt, you may be able to pay an approximate total of $10,000 (10%) over the 60 months of your Chapter 13 plan. Your payment on $100,000 of student loan debt would only be about $167.00 per month.

Please note, while you may get a 60 month reprieve on your student loan payments, you may owe more on your student loans after your Chapter 13 plan is over than when you filed your Chapter 13 bankruptcy.

Do not act on anything you read on this site without hiring an attorney. This is why we offer, for free, to prepare a bankruptcy petition for you to see what works best in your personal financial situation. We provide representation for individuals who live in Lauderdale, Tipton, Fayette and Shelby County, Tennessee, who qualify to file bankruptcy in the Bankruptcy Court for the Western District of Tennessee located in Memphis, Tennessee.

Sincerely yours,

Arthur Ray

Arthur Ray Law Offices

^*For those who qualify under federal law.