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Looking out for loan scams

Recent South Carolina college graduates who are struggling with student loans may be eager to accept debt relief from wherever it may come from. However, many companies may only be looking out for their own best interests. For instance, they may offer to file loan consolidation paperwork for hundreds of dollars even though debtors can do that on their own for free.

There are also companies that offer to help student loan borrowers get some or all of their debt reduced or forgiven. However, only the Department of Education can approve any sort of federal loan reduction or forgiveness request. Therefore, it may be best to go straight to its website as opposed to for-profit organizations offering to help with loans without having the ability to do so.

Shady companies or those that are running outright scams will place advertisements for keywords such as student loan forgiveness or student loan default. They may make conflicting statements or offer vague information designed to confuse student loan borrowers. Similar tactics were used during the home loan crisis, and the Consumer Financial Protection Bureau has regularly warned borrowers about these potentially fraudulent companies.

While Chapter bankruptcy is a process that can offer debt relief from and a resulting discharge of certain types of unsecured obligations, student loan debt is usually not subject to discharge, although there are some exceptions including hardship. However, such debt is treated just like credit card and medical bills in a Chapter 13 bankruptcy, which means that in some cases it could be possible to reduce the amount paid each month under the court-approved repayment plan that lasts from three to five years. Attorneys will tell their clients, though, that once the plan has been completed, the remaining student loan debt must still be repaid.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
Fax: 803-764-1563
Columbia Bankruptcy Office

Columbia Office

Charleston Office
925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
Fax: 866-481-2325
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