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Student Loan Debt in Bankruptcy

student loan debt crisis
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Student Loan Debt Crisis still has not been resolved.    Everyone is waiting to see what the new president will do with this crisis.   It has become almost impossible to discharge these debts in Bankruptcy.    One option could be to look at an option of discharging student loan debts in bankruptcy.

Background:   How much student loan debt?

  • Approximately $1.5 trillion owed.
  • Far exceeds auto loans and credit card debts
  • Currently non-dischargeable
  • Been increasing $70 billion to $100 billion per year since 2006
  • Bureau of census indicates about 17.6% of American adults have student loans

Pending in Congress:

  • May 9, 2019, the Student Borrower Bankruptcy Relief Act of 2019 introduced House of Representatives #2648 and in Senate #1414  https://www.congress.gov/bill/116th-congress/senate-bill/1414.
  • Both of the above would make all student loan debt dischargeable in bankruptcy
  • Senate Bill referred to Committee on Judiciary
  • House Bill referred to Subcommittee on Antitrust, Commercial and Administrative Law

Many of my clients have large amounts of educational  loan debts.   If this Bill becomes law, it would help my clients tremendously.   Let’s continue to watch and see what happens next. 

In bankruptcy, student loan debt is looked at case by case:   https://njbankruptcylawfirms.com/student-loans-can-be-dischargeable-in-bankruptcy-case-by-case-basis/