When it's a challenge for the most seasoned business professionals to land a well-paying job, you can only imagine how difficult it is for today's recent college graduates.
Gone are the days when a four-year education equaled job security. More than a shiny new degree or passion for one's particular field, employers are looking for solid work experience.
Tennessee bankruptcy lawyers have seen an increasing number of well-educated young people struggling in today's economy. Foreclosures are on the rise in Tennessee neighborhoods, and so is unemployment. As a result, many recent college grads quickly end up over their heads with debt.
In many cases, considering bankruptcy in Tennessee may be a smart idea.
That said, bankruptcy doesn't work for everyone. That's why consulting with an experienced bankruptcy lawyer should be your first move if you're experiencing debt trouble.
Bankruptcy's effectiveness depends on factors that include income level, types of debt, amount of current and expected debt, and your personal situation. A bankruptcy lawyer can evaluate this information to determine your best course of action.
Perhaps the most appealing aspect of bankruptcy is that it was designed to help the consumer. Nonprofit credit card counseling programs may offer some guidance, but they do nothing to legally lower debt. For-profit programs often make the problem worse by requiring substantial fees.
Debt settlement companies also cost money and may make your credit worse by recommending that you stop paying your debts. The truth is, getting a lender to sit down with you and negotiate a repayment plan is not likely to happen.
Student loans are a difficult debt burden to unload. In fact, the only way to discharge student debts is to prove you have an "undue burden" or are otherwise physically unable to work due to injury or illness. But that's not how bankruptcy works.
What bankruptcy can do is relieve pressure from unsecured debts - i.e., your credit card balance, medical bills, and other types of loans. Many young Tennessee bankruptcy attorney clients have high unsecured debt because student loans and car payments have left them with little cash leftover to pay other bills. Filing for bankruptcy can free up money for your loan payments, making the rest of your bills more affordable.
If you're unemployed or underemployed, an underutilized two-year-old federal provision known as the Income-Based Repayment program may also help, according to the Associated Press.
Aimed at grads with little or no income that are stuck paying off federal loans, the program lets enrollees pay back debt over either 10 or 25 years if they take a public service job. Eligibility can be determined with a debt vs. income calculator on the Department of Education's website.
There are some cons, however. If your student loans came from a bank, not the Fed, you're out of luck. Also, it's possible that repayment plans can be recalculated based on your annual tax returns - perhaps resulting in higher payments. Selecting the 25-year repayment option will also result in higher interest rates, though remaining debt will eventually be discharged.
Regardless of whether you determine the federal program is right for you, Tennessee bankruptcy remains a viable option. Bankruptcy is the only program guaranteed to discharge debts and help struggling consumers find a fresh financial start.
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For struggling graduates, help with student loans, by Candice Choi, Associated Press