It is no secret that student loan debt has supplanted other forms of debt
as a leading concern for millions of America. Today, student loan debt
exceeds all other forms of consumer debt, including credit card debt.
Unlike credit card debt, however, student loans are not dischargeable
in bankruptcy cases (except in rare circumstances), meaning that consumers
will nearly always still be on the hook for student loan debt even after
they complete the bankruptcy process and receive a debt discharge.
As the student loan debt crisis has unfolded over recent years, its impact
has been felt by countless individuals and families, many of whom are
younger Americans looking to make a life of their own. Unfortunately,
they often find that student loan debt becomes a significant barrier to
financial stability, as well as the financial milestones that traditionally
typified American life, such as car and home purchases.
In an effort to address the growing crisis, advocates and lawmakers have
worked aggressively to identify solutions. Among these are efforts to
pass laws that make it easier for consumers in debt to discharge student
loans during bankruptcy. This is the primary goal of a bill introduced
in Congress earlier months: HR 2366: the Discharge Student Loans in Bankruptcy
Act of 2017. As its straightforward name implies, HR 2366 would amend
Title 11 of the U.S. bankruptcy code to make student loans dischargeable.
HR 2366 may still be in the early stages of wading through the legislature,
but it is important to raise awareness about the bill. Although student
loan debt is a complex problem that requires many different solutions
to fully address, ensuring that real people in need have full access to
the benefits of bankruptcy is an essential focus. Most importantly, Americans
should understand that bankruptcy is intended to help consumers with insurmountable
debt, which can be incurred in part when young people have hopes of gaining
an education and good job.
As we have seen, however, student loans don’t always provide the
catalyst for strong financial health, and in the worst cases, can become
life-altering financial and emotional burdens. In fact, the problem has
kept the American dream a dream for a substantial part of an emerging
generation, and has also served to impede economic growth for the entire
country. As proponents of the bill state, it simply doesn’t make
sense for debtors with student loan debt to be in a worse position than
those who have mortgage or credit card debt. They too deserve the opportunity
to receive help when they feel there is little hope in sight.
As Worcester bankruptcy attorneys who represent men and women throughout
Massachusetts, we have seen the student loan debt crisis up close and
personal, and know that it can be a profound challenge for people who
want simply to succeed in life. By eliminating the barriers in our bankruptcy
code to allow those with heavy debt burdens to find relief, we believe
there will be fairness in the system, and renewed hope for people who
Our legal team regularly works with clients who have student loan debt,
and we have accumulated the insight and experience to help clients navigate
these and other relates debt issues. If you have questions about student
loan debt, debt relief, and how bankruptcy may work for you, do not hesitate
to reach out for a free case evaluation. You have rights and options,
and the Law Office of Robert W. Kovacs, Jr. is passionate about helping
you explore them. Contact us today to get started.