Most Americans associate student loans with students. Recent research by the Federal Reserve of New York, however, has revealed that student loans are wrecking havoc with not just former students, but with their parents, too.
For many families, college students simply don’t have the money or credit rating to fully fund their education. To supplement the student’s credit worthiness, parents will co-sign on the obligation, thus binding their future to their child’s post-graduate fortunes.
Other senior citizens take out education debt for themselves. Either looking to improve their professional prospects or simply to learn something new, these adults take on debt with an assumption – higher future earnings – that simply doesn’t materialize.
Whatever the reason for the senior citizen-held student debt, the bottom line according to the New York Fed is that senior citizens currently hold a staggering $36 billion in student debt. And it’s growing every year.
In general, student debt is non-dischargeable under the Bankruptcy Code. However, other forms of unsecured debt may be discharged, such as credit card debt, home equity lines, and other “second-position” credit products. By clearing these obligations off your family’s balance sheet, you may be in a better long-term position.
Want to know more about whether bankruptcy is right for you, your family, and your retirement plan? The conversation may be more fruitful than you might first imagine. To find out how the professionals at Fears Nachawati can help you, contact us today.