Student debt is currently among those types of loans which are not allowed to be discharged in a bankruptcy case. A few lawmakers are trying to change all of that. The two representatives, one Republican and one Democrat, are working together to try and reform the rules of federal bankruptcy so that people can have some type of student debt relief when they file for bankruptcy. This could be good news for many Florida residents.
Aptly known as the Discharge Student Loans in Bankruptcy Act, the bill would allow those who are filing for bankruptcy to discharge their student loans. As it stands, when someone files, they are still expected to make all of their student loan payments separate from the bankruptcy. With the high costs of a college education, student loans are often the reason that someone may be in debt, and they may need those loans discharged in bankruptcy.
According to the report., the nation’s economic growth is being hindered by student loan debt. This keeps the dream of having a home too far for many to reach. Reaching a whopping $1.3 trillion last year in the United States, student loan debt has gone 18 years with a cumulative increase. One of the representatives says that there is a loophole in bankruptcy law that hurts a lot of Americans.
While one cannot get student loan debt relief through bankruptcy at this time, it could soon be a real possibility in Florida and other states. Anyone who is considering bankruptcy could benefit from speaking with an experienced bankruptcy lawyer who is knowledgeable about new laws and regulations. Bankruptcy attorneys can guide their clients in the best way to seek a fresh start financially.
Source: financialregnews.com, “Reps. Katko, Delaney sponsor bill that would let student loan borrowers get bankruptcy discharge“, May 10, 2017