Can bankruptcy protection help with old or unknown debt? It is now a growing trend to see older Americans facing debt from student loans, even from decades ago, that may have been neglected, forgotten or not known. As this becomes more common, some of these individuals may explore the option of bankruptcy protection to discharge certain debts.
There are a growing number of people who are facing garnishment of their Social Security checks. In 2013, this number totaled 156,000 Americans, including those in Maryland. Retired Americans depend on this income, and any decrease from garnishment can cause financial difficulties. Sadly, many student loans cannot be refinanced for a lower interest amount.
One of the problems with student loans is that, even if the original balance was a small amount, compounding interest over the years can result in a startlingly high amount that is owed. Many parents or grandparents are caught off guard when they learn that they are responsible for defaulted student loans that they cosigned for family members. This is especially difficult if they owe other debts.
Maryland residents depending on Social Security income know that the full amount is needed to support their needs. Garnishment can have a direct impact on their ability to pay for medicine and other needs after retirement. However, bankruptcy protection may offer a solution. The bankruptcy process does not include the discharge of student loan debt, but eliminating other debts can free up income to pay other balances. When facing debt that cannot be managed, it is useful to consider all available options for retirees dealing Social Security garnishment.
Source: clickondetroit.com, “Retirees’ Social Security checks garnished for student loans”, Patrick M. Sheridan, Aug. 24, 2014
Source: clickondetroit.com, “Retirees’ Social Security checks garnished for student loans”, Patrick M. Sheridan, Aug. 24, 2014
