What is the effect of Chapter 13 Bankruptcy on student loans?

In New York, Chapter 13 bankruptcy law has an effect on student loans. This type of bankruptcy is considered a repayment plan and is sometimes referred to as a ‘wage earners’ bankruptcy. Under Chapter 13, a debtor may propose a repayment plan to creditors that can last up to 5 years and is typically used to eliminate certain secured debts or stop foreclosure. When it comes to student loans, Chapter 13 bankruptcy offers a number of advantages. The repayment plan can reduce the amount of money that needs to be paid back on student loans. Additionally, interest rates can be kept at their original levels, rather than increasing. This can save a debtor money in the long run. Chapter 13 bankruptcy can also prevent a student loan from going into default. It can stop garnishments from being applied to a debtor’s wages and protect a debtor from lawsuits concerning the loan. Additionally, the repayment plan may also allow a debtor to extend the repayment period for a student loan, allowing them the opportunity to pay off the loan over a longer period of time. Overall, Chapter 13 bankruptcy can be beneficial for those who are struggling to pay back their student loans. It can provide a way to reduce the amount owed and protect a debtor from lawsuits or garnishments. Additionally, it can help to prevent the loan from going into default and may also offer a chance to extend the repayment period.

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What is the effect of Chapter 13 Bankruptcy on student loans?

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