When it comes to paying off your debt, federal student loans can be one of the most difficult debts to deal with. Not only can the high interest cause your repayment amount to climb into the hundreds of thousands, but bankruptcy will not help with them. While bankruptcy can help you settle your other debt, federal student loans will not be included. Thankfully, there are some things that you can do to make your student loan debt somewhat affordable and pay them off as soon as possible so that you can get completely out of debt.

Ask About Hardship Programs

One of the first things you can do is ask about hardship programs. These are typically only offered to those as a last resort. This includes arrangements such as forbearance, deferments, and income-driven repayment programs. These can help defer your payments while you work to pay off other debts so that you can afford your student loan payments.

Student Loan Settlements

Student loan settlements are very rare and only an option after all other repayment options have been exhausted. In settlement situations, the creditor is going to require a lump sum payment in order to be approved.

One settlement is a full repayment of the principle, the accrued interest, minus collection charges. This can save you some money because collection charges can get very expensive. Your other option will be to pay the principle of the loan plus half of the accrued interest. Any other settlement options will require an approval from the federal government.

Keep in mind that if you happen to come into a large sum of money from an inheritance or other means, a settlement is no longer an option. This is because any money held in bank accounts in your name become available in collection cases. But if you have a relative who offers to pay the settlement for you without putting the money in your name, then you can be eligible for a settlement because the money is not a personal asset.

After The Settlement

Once a settlement is agreed upon, make sure you get a paid in full statement. This will lock in the terms that you and the lender discussed while negotiating the settlement. You will receive this statement once you have actually paid the money to the lender. After that, you should not have any further communication with the lender or a collection agency.

If you are able to successfully get a settlement for your student loan debt, consider having your attorney review the terms of the offer that is provided to you. Also, request all copies of any documentation regarding the settlement to keep on file in the event the loan suddenly reappears for any reason. If the bulk of your debt are student loans, one or more of these options may help you avoid bankruptcy altogether. Contact a business such as Dunbar & Dunbar for more information.