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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > More Student Debtors Are Filing for Bankruptcy in First Year of New Process

More Student Debtors Are Filing for Bankruptcy in First Year of New Process


Anyone who is struggling with student loan debt should know that there is a new process in place for having student loans discharged in bankruptcy, and that new process has been in place since November 2022. According to a recent press release from the US Department of Justice (DOJ), the new process has proven successful. Indeed, as that press release states, “one year after Associate Attorney General Vanita Gupta announced the process in November 2022, data and information show that the process is achieving its goals of ensuring consistency and equity in the evaluation of student loan discharge requests, and that the process has translate into increasing numbers of eligible federal student loan borrowers seeking and obtaining debt relief under the Bankruptcy Code.”

In short, more student debtors have filed for bankruptcy since the new process was announced, and the new process appears to be working for borrowers. Our West Palm Beach bankruptcy attorneys can tell you more, and we are here to speak with you about any questions you might have about the process.

Easier Process for Discharging Student Loans 

The new process makes it easier for debtors to prove that they are eligible to have student loans discharged in bankruptcy. Debtors must still meet the “undue hardship” requirement that existed in the past, which requires proof that, for the debtor, continuing to make student loan payments would constitute an undue hardship. Yet the general process for providing proof of “undue hardship” has become much easier.

Now, with the new process, debtors complete a single “attestation form” that DOJ attorneys review. In their review, DOJ attorneys consider the debtor’s present ability to pay, future ability to pay, and good faith effort to handle their student debt in the past. Based on those factors, DOJ attorneys make a recommendation to the bankruptcy judge about whether the debtor should receive a full discharge, a partial discharge, or no discharge.

Data on the New Discharge Process 

The new process has resulted in an increase in bankruptcy filers and, according to a CNBC article, “the vast majority of borrowers seeking discharge have received full or partial discharges.”

Here is some data from the DOJ:

  • In the first year of the new process, 632 cases were filed, which represents a significant increase;
  • In 99 percent of the cases filed, the DOJ recommended a full or partial discharge and the bankruptcy court agreed; and
  • DOJ expects rise in cases filed to continue.

Contact a West Palm Beach Bankruptcy Attorney Today 

The new bankruptcy process is leading more consumers with student debt to file for bankruptcy. If you are in a position where your loans could be fully or partially discharged, we can begin working with you to file a bankruptcy petition. Do not hesitate to reach out to us to learn more about the ways we assist debtors with educational loans in South Florida. You should not have to be burdened by insurmountable student debt, and we have the experience to help you get there.  Do not hesitate to contact one of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller for more information and to get started on your case.





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