If you have an undergraduate degree and a professional or graduate degree, chances are you are probably paying off student loans. Since 2008, the economy has not been the best for finding jobs that help in that payment process. Consider that a small amount of debt can snowball into hundreds of thousands of dollars in a period of ten years, and you could be facing financial ruin.
Do not wait if you find yourself facing default on a loan. The worst case scenario for that professional who is not making the income needed to pay off debt would be for him to go into default, be foreclosed on, and then ultimately file bankruptcy. By being proactive about your debt situation, you can protect your credit score from undue harm and get out of debt faster.
There are steps you can take if your income is not high enough to service the debt from student loans, mortgages, and consumer credit. The first would be to consult a financial or credit counselor and evaluate your options for refinancing. You may be able to find better rates by consolidating loans or restructuring.
The next step would be to consult a student loan debt lawyer. It may be that your circumstances make you eligible for student loan discharge through filing for bankruptcy. Even if filing wouldn’t eliminate student debt completely, the court may be willing to work with you on a repayment plan that makes sense for you.
By being proactive, the inevitable credit score slide that comes from defaulting on a loan and the amount of debt you face could be greatly diminished or completely eliminated.