Student Loans and Bankruptcy: A Game-Changer in Debt Discharge
The Looming Student Loan Payment Deadline
As we edge closer to October, millions of Americans are bracing themselves for the resumption of their student loan payments. This looming deadline is set against a backdrop of rising financial distress. A recent survey by Morgan Stanley found that an alarming 34% of respondents said they would not be able to make any payments at all on their student loans.
Uncertainty Around Biden's Loan Forgiveness Plan
The situation is complicated further by the uncertainty surrounding the Biden plan to forgive up to $20,000 in student loans. The proposal is currently being challenged and awaits the Supreme Court’s decision, anticipated to be released this week.
Discharging Student Loans Through Bankruptcy: A Silver Lining
While these may be unsettling times for borrowers, a significant silver lining emerged in November of last year. Many are unaware that a crucial policy change has made it easier for federal student loans to be discharged through bankruptcy.
Criteria for Discharging Federal Student Loans
New policies from the Departments of Justice and Education now allow for federal student loans to be discharged if specific criteria are met:
- The loan must be federal.
At least one of the following five conditions must apply:
- Over 10 years have passed since the loan entered repayment status.
- The borrower didn't earn a degree.
- The borrower is over 65 years old.
- The borrower has been unemployed for 5 of the past 10 years.
- The borrower has a disability or injury.
Bankruptcy Firms Adapting to New Guidelines
This is a game-changing development for individuals with student loans. Unfortunately, not every bankruptcy firm has been proactive in adapting to this new landscape. In fact, many have yet to offer this service to student loan borrowers.
DebtStoppers: Aiding in Student Loan Bankruptcy Cases
However, at DebtStoppers, we immediately saw the potential of these new guidelines to help our clients. We began filing cases on behalf of student loan borrowers as soon as the new guidance was published. For many people, student loans are the largest financial hurdle they face. We believe that these new bankruptcy options can be a life-altering solution for many borrowers.
Success Stories: New Opportunities for Borrowers
We are now starting to see successful conclusions to the cases we filed in November. These cases represent a new opportunity for borrowers to resolve their student loan issues and start afresh financially.
Bankruptcy: A Viable Option for Those Struggling with Student Loans
In closing, if you are struggling with student loan debt and meet any of the criteria above, filing for bankruptcy could be a viable option for you. At DebtStoppers, we are experienced and ready to help navigate this new territory.
Staying Informed on Changes in Student Loan Policies
While this new policy presents a ray of hope, it's essential to stay informed about ongoing changes in student loans, including refinancing options, Public Service Loan Forgiveness, how to pay off student loans, current student loan interest rates, and other student loan forgiveness programs.
Achieving Financial Independence Through Debt Management
Remember, financial independence isn't just about making money; it's also about managing the money you owe. It's time to stop feeling overwhelmed by your student loans and start exploring your options. Reach out to us at DebtStoppers today.