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For people struggling with student loans, Chapter 13 bankruptcy could be a viable solution

Liviakis Law Firm

Filing for bankruptcy is often considered a last resort for those under the burden of insurmountable debt. However, for people struggling with student loans, Chapter 13 bankruptcy could be a viable solution. While it is often misunderstood, the process can offer a strategic pathway to financial freedom if navigated correctly. This article will delve into why individuals with student loans should consider filing for Chapter 13 bankruptcy.

Firstly, it’s essential to understand what Chapter 13 bankruptcy entails. Unlike Chapter 7 bankruptcy, which liquidates your assets to pay off debts, Chapter 13 allows you to reorganize your debts into a manageable repayment plan. This plan typically spans three to five years and is based on your income, expenses, and types of debt.

While it’s true that student loans are not typically discharged in bankruptcy, Chapter 13 provides a way to manage these loans more effectively. Under a Chapter 13 plan, your student loans are classified as non-priority unsecured debts, meaning they’re often paid last and usually don’t need to be paid in full. This can significantly ease the financial burden and allow for more manageable monthly payments.

Moreover, the automatic stay provision in bankruptcy law prevents creditors from collection efforts while you’re under the protection of bankruptcy. This means that during your Chapter 13 repayment plan, student loan creditors cannot sue you, garnish your wages, or even contact you about your debt. This relief from relentless collection efforts can provide invaluable peace of mind.

One of the unique benefits of filing for Chapter 13 bankruptcy is that it can help you regain control of your financial future. It’s a proactive step that demonstrates your commitment to addressing your financial challenges. While your credit score will initially take a hit, over time, regular, consistent payments can start to rebuild your credit.

A significant caveat to remember is that bankruptcy laws are complex and navigating them requires a thorough understanding. It’s crucial to seek professional legal advice before making any decisions. At Liviakis Law Firm, we have a comprehensive understanding of bankruptcy law and can provide the guidance you need.

In conclusion, filing for Chapter 13 bankruptcy can be a strategic tool for those struggling with student loan debt. It offers an opportunity to reorganize your debts, halt aggressive collection efforts, and work towards financial stability. If you’re considering this route, reach out to our team at Liviakis Law Firm on 916 459 2364. We’re here to help guide you through the complexities of bankruptcy law and towards a brighter financial future.

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Former Office
1215 K St

Sacramento, CA 95814

Phone: 916 459 2364
New Office
2377 Gold Meadow Way
#100

Gold River, CA 95670

Phone: 916 459 2364

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Mr. Liviakis is extremely knowledgeable and answered all of the questions that we had about our situation. He made a really difficult time manageable with his help and expertise. I would definitely recommend...

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Mik is a great attorney. Very friendly & professional. Price is was bit high compared to other firms. Probably the highest I've seen. If price your thing, checkout other firms. Other than that, Mik will get the...

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Mr. Liviakis was timely and professional. He patiently answered questions and explained the process. He provided handouts that clearly outlined due dates. The firm's paralegal was very easy to work with. I...

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