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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > Data Shows Most Student Loan Discharged Approved in Bankruptcy Cases

Data Shows Most Student Loan Discharged Approved in Bankruptcy Cases


Is the new process for discharging student loans in bankruptcy working? According to a press release from the US Department of Justice, the new process that was unveiled in 2022 has resulted in most student loan debtors who have sought a discharge receiving a discharge of their student loans. Although recent data suggests that only a small percentage of debtors with heavy student loan burdens have actually sought a discharge of those loans in bankruptcy cases, the information presented by the Department of Justice suggests that more borrowers may want to consider bankruptcy if they are struggling with student loans. What do you need to know? Our West Palm Beach bankruptcy attorneys can tell you more.

Nearly All Debtors Who Sought a Discharge Were Successful

 If you have been reading about the new process for discharging student loans in bankruptcy, you may be wondering if it is actually working, and if more debtors are in fact receiving discharges of their student loans. Given the long-held — although incorrect — assumption that discharging student loans in a bankruptcy case was nearly impossible, many debtors have wondered just how much easier it is now, with the new process in place, to have student loans discharged. According to the Department of Justice press release, nearly all debtors who sought a discharge of student loans and used the new process were successful.

Indeed, “in 99 percent of cases where courts have entered orders or judgments to date, the government recommended, and the court agreed to, a full discharge or partial discharge.” In other words, the new process appears to be working — making it significantly easier for debtors to seek a discharge of student loans and to have the discharge approved.

Understanding the New Process for Discharging Student Loans in Bankruptcy 

What is the new process, and what makes it so much easier for debtors? With the new process, debtors still must prove that continuing to pay their student loans would impose an undue hardship, but the system for meeting that “undue hardship” requirement is significantly easier and streamlined.

Now, debtors simply work with their bankruptcy lawyer to complete a 15-page attestation form that provides detailed information about their financial circumstances of the past, present, and future to the Department of Justice. Attorneys at the Department then review the attestation form to determine whether the debtor has the 1) present ability to pay, 2) future ability to pay, and 3) good faith efforts to manage student loan debt in the past. The Department attorneys then make a recommendation to the bankruptcy judge, which can include a recommendation for a full or partial discharge.

Contact Our West Palm Beach Bankruptcy Lawyers Today 

Are you struggling with student loan debt? You could be eligible to have your student loans discharged in a personal bankruptcy case. An experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller can speak with you today about the new process and how it could help you. If you do want to file and seek a discharge of your student loans, our lawyers are here to assist you.



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