“Never give up and good luck will always find you…” – Falcor
The Neverending Story is probably my favorite childhood movie and the book (quite different from the movie) was not so bad either.
It is the story of Bastian, a young, tormented boy who finds a well needed escape in a fantasy book called “The Neverending Story.” The book transports him to a land called Fantasia.
Fantasia is being slowly destroyed by “The Nothing” and desperately needs a hero to save the land from complete destruction.
Okay, back to reality.
In revisiting this story, I was struck by parallels. The main theme explored in the story closely resembles the financial crisis we are going through today. More specifically, I related “The Nothing” to the snowballing student loan crisis.
When things look hopeless, you need a luck dragon.
Student Loan Solutions
Unfortunately, I don’t have much to write here. Sure, if you have Federal Student Loans, there are assistance programs available.
Deferment, Forbearance and Income Based Repayment plans provide legitimate relief for borrowers with government loans.
Due to the increasing cost of higher education in this country, most people are saddled with extensive private loans in addition to their government loans. Private lenders are not as forgiving and not as willing to work with borrowers.
There are simply no good options for dealing with private student loans. They are not dischargeable in bankruptcy and knowing this, the lenders hold all the power.
Debt settlement is an option, but usually requires a “lump sum” payment that is not always financially feasible. Some lenders will offer deferment and/or forbearance programs but the barrier to entry on these is usually high.
When mired in the “Swamp of Sadness” that is student loan debt, chapter 13 bankruptcy may be the luck dragon to pull you out.
Chapter 13 bankruptcy can be the last line of defense against your student loan creditors. It can be used as a shield to protect you from the onslaught of creditor harassment and collection activity. It can stop lawsuits, prevent judgments, bank liens, wage garnishment and other intrusive remedies.
If nothing else, it can buy you much needed time. It takes the ball out of the lender’s hands and creates a payment schedule on your terms that you can afford.
What if five years is not enough? What if nothing has changed with your income and the creditor friendly laws in place today have not been amended?
You can file another chapter 13 bankruptcy, invoke the automatic stay and protect yourself for another 5 years.
Essentially, you could live in a “neverending bankruptcy” and protect yourself indefinitely from your student loan lenders.
This should be done with the guidance of an experienced and committed bankruptcy lawyer.
The point is, while there are no “real” solutions to get you out of that student loan swamp, never give up, good luck will find you.
Image courtesy of zero g (Flickr).