New Discharge Process Presents “Opportunity” Amidst Student Loan Crisis
Floridians, along with many Americans across the rest of the country, have been struggling with student loan debt. While many of those borrowers received a reprieve during the lengthy federal student loan payment pause, that pause ended recently and borrowers again owe monthly student loan payments. In the past, before the student loan payment pause, debtors often had difficulty discharging their student loans in bankruptcy or decided against even trying to do so given the noted complexity of the process. Yet things have changed since then.
Indeed, a new process is now in place for proving eligibility to have student loans discharged in a bankruptcy case. And according to a recent BBC News report, that new process means that personal bankruptcy presents an “opportunity” to debtors amidst the student loan crisis. Our experienced West Palm Beach bankruptcy attorneys can tell you more.
Many Americans Could Be Eligible to Have Student Loans Discharged
The recent BBC article outlines how student loan borrowers across the country often have monthly payments on student loans that are higher than what they can reasonably afford, even when they have steady jobs and earn a relatively decent income. Currently, that article reports that the student loan crisis in the US remains a serious issue due to the sheer amount of collective debt that borrowers hold. In total, Americans have a student debt total of greater than $1.7 trillion and, as the article underscores, “borrowers often face heavy monthly bills decades after they have finished their education.”
Yet with the new process in place for having student loans discharged through bankruptcy, more debtors may want to consider a bankruptcy filing in order to have their student debt discharged. As the article points out, “for decades, student loans in the US have faced a higher bar for forgiveness than other debts,” and borrowers who have tried to have their loans discharged often have become involved in “contentious court battles” about the discharge. Yet the new process has changed that, and it is now much easier for debtors to prove their eligibility for a discharge.
Getting Your Student Loans Discharged through Bankruptcy
According to the BBC, as many as 100,000 student loan borrowers, out of a total of 250,000 borrowers in the US, could be eligible to have their loans partially or fully discharged through bankruptcy.
Now, debtors will go through a simplified process in their bankruptcy that involves filling out an attestation form, which will be assessed by Department of Justice attorneys who will then make a discharge recommendation to the bankruptcy judge.
Contact a West Palm Beach Bankruptcy Attorney Today
For many debtors in South Florida, the possibility of having student loans discharged in bankruptcy is a key reason to file. As the BBC article highlights, the new process really is presenting an opportunity for debtors who previously believed it would be nearly impossible to get a fresh start financially that involved a discharge of their student loans. If you are struggling with debt and a big part of the reason is student loans, you should talk with one of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller about your circumstances. You may be able to file for bankruptcy to have your student loans discharged. Contact us today to learn more.