If you are like many recent graduates across the country, you are feeling overwhelmed by your student loan debt. Unfortunately, there is no easy way out of repaying student loans. Below are three common mistakes student loan borrowers make when it is time to repay their loans:
- Ignore them. This may seem silly, but many graduates believe they can simply ignore their student loans until they are in a better position to deal with them. The logic is that there isn’t much the lender can do to them, but they are wrong. If you don’t start making an effort to repay your student loans, penalties and interest immediately begin to accrue, which only increases the amount you owe. Your credit score will start to sink, which impacts your ability to obtain a mortgage or other important loans. And, with it being extremely difficult to discharge student loans in bankruptcy, your situation will only continue to get worse. For more information, please read our blog titled “Avoid Default on Your Student Loans.”
- Pay with home equity. If you borrowed your student loan later in life and you have equity in your home, you may think consolidating your loans will help you obtain lower payments. While this could work, it could also have dire consequences. In exchange for a slightly lower interest rate, you are linking additional debt to your home which could put it in jeopardy if you miss a payment on your student loan.
- Pay with credit cards. Don’t get “creative” and think you can out-smart the system. In other words, don’t attempt to pay your student loans with credit cards and later file a personal bankruptcy intending to discharge the credit card debt. The trustee will figure it out and, aside from potentially getting you into trouble with the court, you will still be liable to pay your student loan debt.
If you are feeling overwhelmed by your student loan debt, call us to schedule an appointment. We will explain your options and help you find a manageable plan for repaying your loans.
If you would like a down-to-earth approach and a lawyer who will listen carefully to all your questions and concern, call DeLadurantey Law Office, LLC,at (414) 377-0518. We serve clients primarily in the areas of student loan law, Chapter 7 and Chapter 13 bankruptcies, debt negotiations and defending foreclosure actions. If you live in the area of Milwaukee, Wisconsin, call us for the debt relief assistance you need. Visit our web site and like us on Facebook.