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Defending a student loan default

When a borrower of a student loan falls behind on the payments and remains delinquent for a period of nine months, the student loan enters default. Because the Department of Education can then take steps to collect the debt, borrowers in Miami-Dade County and elsewhere across the country who are facing the consequences of a student loan default may be interested in knowing how the situation might best be navigated moving forward.

The best possible course of action may be dependent upon the process that the Department of Education has chosen to use in order to collect the debt. A number of avenues are available to the department, which could include revoking the borrower’s professional license, suing the borrower, or taking a portion of the borrower’s Social Security benefits as allowed by law.

If authorities choose to take the borrower’s tax refund or garnish that individual’s paycheck, the borrower may be able to appeal the offset or base an objection by asserting any one of a number of defenses. A bankruptcy case that has been filed but remains pending constitutes one such defense that could ultimately help resolve the matter in the borrower’s favor.

When a resident of Miami-Dade County has a good income but is struggling to stay on top of student loan payments and other financial obligations, pursuit of a Chapter 13 bankruptcy could ultimately provide a measure of relief to the borrower and pave that individual’s way to a more stable financial future. Because there may be both advantages and disadvantages to filing bankruptcy for the purpose of resolving an outstanding student loan balance, borrowers may find it beneficial to seek legal counsel concerning all potential defense strategies well before any such loan deficiency might escalate to a default.

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