Does consolidating student loans affect credit score

It is theoretically possible to have all of your debts wiped out except for your student loans when you file for bankruptcy.Although it is difficult to get your student loans discharged through a Chapter 7 bankruptcy, it is not impossible.The type of bankruptcy that you file will determine what happens to your debt once you file.If you file for a Chapter 13 bankruptcy, you will get started with a repayment program that is administered by the court.

This type of bankruptcy makes it possible for most of your consumer debt like credit cards, store accounts and medical debt to be completely wiped out.However, this market is so big and backed by the government that it may be too big to fail.When you file for bankruptcy, you can sometimes get rid of the majority of your outstanding debt.For example, if you took out the loans and then immediately after you got out of college, you filed bankruptcy, this does not show good faith.In that case, the bankruptcy court would probably make you keep the student loan debt.

Leave a Reply