The Risks of Defaulting on Student Loans
The cost of college tuition has been rising significantly in recent years. Even public universities are experiencing the need to raise their fees, and students are taking out more loans than ever before. The majority of students have had to turn to financial institutions to cover some or all of their tuition or living expenses.
Unfortunately, more people borrowing money also means that more people are likely to default on their payments. It is important to understand the risks associated with failing to pay off debts and the specifics of student loans. If you have questions regarding your student loan, other debts, or potential bankruptcy options, contact a Cincinnati bankruptcy attorney from the law office of Ryan J. Ruehle at 513-777-0880.
Risks Associated with Student Loan Default
Any failure to pay the debts associated with a student loan may result in penalties such as:
- A percentage of earned wages may be subject to federal wage garnishment
- Part or all of tax refunds may be garnished by the Treasury Department to pay back debt
- Your debt may grow because of additional fees or penalties
- You may be sued by the Treasury Department for the remaining balance of your loan
- Your credit score will suffer from the failure to repay your debts
Bankruptcy will not eliminate student loans, but it may help to relieve other financial pressures that have made it impossible to pay back school debts. Filing for bankruptcy may help individuals facing several types of debt to reduce the amount owed and get their finances back on track.
If you or someone you love is facing mounting debts associated with student loans or other outstanding payments, bankruptcy may be a helpful option. Contact a Cincinnati bankruptcy attorney from the law office of Ryan J. Ruehle at 513-777-0880 to speak to a member of our legal team about your case today.