When you received your well-earned degree, you didn’t anticipate the hardships you’d experience in the years to come. The market has been anything but kind to your field and the competitive job market has left little room for opportunity. You’ve had to make difficult choices between paying student loans and the mounting medical bills. Needless to say, you aren’t alone. Over 44 million borrowers in the United States are carrying similar burdens with the graduating class of 2016 averaging $37,172 in student loan debt.
Unfortunately, you’re fearing that the only way to escape the grips of creditors is to file for bankruptcy. But it may not be too late to catch up on your payments. Here are some tips that may help you to avoid crumbling under student loan debt and declaring bankruptcy.
Inquire about other repayment options
Many federal student loans provide you the option to restructure payments based on your income, known as income-driven repayment plans. This option can make payments more manageable, especially if you are not bringing in as much money as you anticipated.
Tackle other areas of debt
If you pay off credit cards with high interest rates first, you can begin to reallocate your future income to student loan payments – but don’t neglect your student loans entirely. Personal loans may also be an option to pay off credit card debt. They often offer lower interest rates than your credit card companies. Paying off credit cards with a low-interest, personal loan may even strengthen your credit score.
Some loans qualify for consolidation. In some instances, consolidating your loans may be able to offer you a lower interest rate if you qualify. It may also be a way to lower your monthly payments making them more manageable.
Keep in mind that declaring bankruptcy does not always mean that your student loan debt will be forgiven. However, there have been circumstances in which exceptions have been made in cases of undue hardships. If you’re considering filing for bankruptcy, you may want to speak with a bankruptcy attorney to discuss your financial options.