In my non-legal, non-expert opinion I would advise him to declare Chapter 13 bankruptcy. I am pretty sure you can't wipe-out student loans with Chapter 7.

The bankruptcy attorney can negotiate with the courts to get amounts reduced, restructured, and put on a payment plan. All interest and fees stop, and the payment plans usually run for 5 years.

The payments are typically made as a payroll garnishment to the bankruptcy trustee and it's a fairly straightforward and simply process.

The good thing about a Chapter 13 is it is considered credit and the payments toward the plan help to rebuild the filer's credit.

I would advise your friend to speak with an attorney; most bankruptcy attorneys offer a free consultation.

Two cents: my partner works in collections, and he hates talking to debt consolidators. They waste everyone's time, including the debtor's, by tossing out ridiculously low settlement numbers that no one is going to accept. Plus, my partner's received more than one call from a debtor wondering why their debt consolidator hasn't managed to stop collection actions or negotiate payment plans for them. The answer? Only bankruptcy does that.

If your boyfriend has called his creditors himself, told them the absolute maximum he can pay, and they still haven't accepted that offer, he should file for bankruptcy. Bankruptcy was invented for situations like this. Stop the interest clock, make a doable payment plan, and rebuild from there. Good luck to him.

No matter which route he chooses, he should verify that the service provider is legit.
- In the case of debt consolidation, the WA Dept. of Financial Institutions' (DFI) website provides advice to consumers, as well as links to DFI Financial Fraud Alerts, Consumer Alerts from the Attorney General, and BBB Alerts.
- For a bankruptcy attorney, he should verify that the attorney is licensed by the Washington State Bar Association. A good attorney will usually provide a free consultation to present the pros/cons of bankruptcy and whether it makes sense for an individual's financial situation.

In bankruptcy, a debtor can usually discharge unsecured debts. However, student loans are not dischargeable, except in cases of extraordinary hardship. Bankruptcy can stop collections actions and provide a fresh financial start. A bankruptcy attorney will often offer payment plans, and the cost is usually a fraction of the amount of the discharged debt.

In debt consolidation, debt may not be erased but rather repackaged (hopefully into a lower interest loan). The decision whether to forgive a debt or enter a repayment plan is in the hands of creditors (as opposed to the court, in a bankruptcy). If a debtor does receive debt forgiveness, there may be tax implications (forgiven debt may be counted as income by the IRS).

Of course, without knowing your boyfriend's specific financial situation, I cannot provide legal advice. However, I do hope this helps him decide how to proceed.

To be honest, I wouldn't do either. Bankruptcy looks horrible as does Debt consoladation places. I have done the debt places, and my credit got worse. He only has 10K in credit card debt and 12k in student loans. It really isnt that much. Student loans are debt that will be paid for the rest of his life. Go to IBR.com and sign up there. I would also pay as much as you can to the credit card companies. The thing they dont tell you is that they have to take what you pay, regardles of if they say they are going to sue you or garnish wages, they cannot, because you are paying them something each month. Also on the car thing, my car was repo'd as well and I said forget it, I am not going to be paying on somehting that I am not driving. Which is funny, because the bank agreed. (anything after 7 years will disapear from your credit) Maybe it is time to get a 2nd job to pay extra fees and pay off debt?

-cheers