A student loan after bankruptcy is still a viable debt that needs to be repaid since these contracts aren't erased like other debts. The only way a borrower can dismiss these types of contracts is if his income possibilities are so limited that he cannot now, or ever (because of dire misfortune) pay the debt even though he's sincerely tried---and can prove all of this to an inquiring judge. Hopefully, the borrower's circumstances are not so severe because he can use student loans after bankruptcy to regain a better credit rating. The trick is to make the payments on time, every time, and even try to pay down the balance by making extra payments. If the contract has not been consolidated or negotiated or discussed with a financial counselor, then not all avenues of effort have been fully addressed. No matter what, young borrowers need to work closely and forthrightly with a trusted lender.
If the coed is able to double or even triple the minimum payments, success is on the horizon. Student loans after bankruptcy that are paid down will have the advantage of improving a person's FICO score, the three digit number that identifies that person as a credit risk or a credit star. It is worth the effort since this one commitment to "pay more" may mean that additional student loans after bankruptcy--even car and home loans--will not come with excessive, budget-killing interest rates later. Even making a year's worth of consecutive low payments on time shows good faith. Any effort to regain credit worthiness will play a significant part in a lender's decision. Bankruptcy itself may or may not have an impact on eligibility for federal student aid. By law, Title IV grants and loan aid cannot be denied just on the basis of a previous bad financial history.
Seeking a student loan after bankruptcy is an important step towards financial freedom. Federal contracts are especially helpful to borrowers because no repayment is required until 6 months after graduation. If there is still a question of delinquency or default, any school would be reluctant to add more financial risk to a young borrower, not to mention the financial risk it brings to the school. If parents are turned down for a federal contract because of bad credit, the coed can apply for an increased student loan after bankruptcy through an unsubsidized Stafford loan. The parents' credit history is not a problem for coeds unless they have parents co-signing the documents. If bankruptcy was caused by extraordinary circumstances, most lenders will try to find a way to grant a student loan after bankruptcy, if at all possible. No believer is exempt from handling money wisely. Proverbs 16:20 says, "He that handleth a matter wisely shall find good: and whoso trusteth in the Lord, happy is he." Our first source of wisdom is God. We must search His Word to help us find our way in the world, even as we apply for student loans after bankruptcy.
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