The Law Office of Kim Covington

Call For A Free 1-Hour Consultation
541-393-2790 | 800-673-1891

Please Ask For Kim Directly When Scheduling An Appointment

Study finds student loans debt may contribute to bankruptcies

Some Oregon consumers who file for bankruptcy may be carrying significant student loan debt. The company LendEDU found that nearly one-third of people who filed for Chapter 7 bankruptcy had student loan debt, and on average, almost half of their total debt was student loans. Even though most student loans cannot be discharged in bankruptcy, the filings appear to be increasingly driven at least in part by these obligations.

Student Loan Hero found that those debts were substantial, with the average graduating student loan debtor in 2018 owing $29,800. In 2019, the national student loan debt reached an all-time high of $1.5 trillion. A Chapter 7 bankruptcy allows all eligible debt to be discharged without any payment. What many people with student loan debt may do on declaring bankruptcy is use the money they would have used in paying off credit card or medical debt on their student loans.

The study by LendEDU looked at data for more than 1,000 debtors who filed for bankruptcy with the assistance of a nonprofit that helps low-income consumers. It did not include figures for Chapter 13 bankruptcy. This type of bankruptcy involves restructuring debts and allows people to pay off debts over a period of three or five years.

Eligibility for a Chapter 7 bankruptcy is in part based on income, and an attorney might be able to discuss this and other options for debt relief with a client. People may also be struggling to pay bills because of medical debt, job loss, or a divorce. There may be several advantages to filing for bankruptcy. It stops creditor actions immediately, including phone calls and lawsuits. A person can also start rebuilding credit after filing.

No Comments

Leave a comment
Comment Information
email us for a response

Learn More About Your Fresh Financial Start

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

The Law Office of Kim Covington

The Law Office of Kim Covington
1445 Willamette Street, Suite 9
Eugene, OR 97401

Toll Free: 800-673-1891
Phone: 541-393-2790
Fax: 541-344-6466
Eugene Law Office Map

P: 541-393-2790

T: 800-673-1891

F: 541-344-6466