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Chapter 13 Bankruptcy and Student Loans

Sawin & Shea

Student loan debt can be crippling. Trying to put money towards a house or a car, as well as paying all of your other bills on top of student loan debt, is often exhausting and can sometimes feel impossible. In America alone, the average student loan debt in 2021 comes to around $1.7

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Will Bankruptcy Erase ALL of My Debt?

Sawin & Shea

That money will go to your Chapter 13 trustee, who will then distribute it amongst your creditors. It can also force unsecured creditors to take what the bankrutpcy law says you can afford to pay, many times cents on the dollar. Student Loans. Student loans can be particularly challenging.

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When a Company Goes Into Administration or Liquidation Who Gets Paid First?

Hudson Weir

Once a firm enters administration, it must pay every creditor group entirely, save for ‘prescribed part’ secured creditors, before funds are distributed to the subsequent creditor. This amount is then used to give unsecured lenders more chances to recoup a little of their outstanding capital.

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Dealing With Debt From COVID-19

Debt Free Colorado

Either way, you should speak with an experienced debt relief attorney about strategies for dealing with unsecured creditors. Student Loans. You should call your student loan servicers about forbearance, which will temporarily stop or reduce your payments. Experian Credit Card and Debt Relief List.

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Chapter 13 Bankruptcy Hardship Discharge: Am I Eligible?

Sawin & Shea

Chapter 13 bankruptcy involves entering into a reorganization plan to protect assets, catch up on arrears on houses or cars, and force unsecured creditors to take reduced amounts based on what the bankruptcy law requires that you pay them. A student loan is an example of a nondischargeable debt under federal law.

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What Should You Know About Medical Debts & Bankruptcy?

Sawin & Shea

Many Chapter 13 Debtors pay pennies on the dollar back to their unsecured creditors. After you have completed your Chapter 13 payment plan, if there is any remaining unsecured debt, it will be discharged with a few exceptions like some taxes, most student loans, and child support.

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What Assets Do You Lose in Chapter 7?

Sawin & Shea

If you are not, this test determines how much you are required to pay back to your unsecured creditors in a Chapter 13 reorganization. Instead, they’ll merely sell non-exempt property and assets to pay off a portion of debts to unsecured creditors. Indiana’s median income changes from year to year.