Legislation has been introduced in both the?
House and Senate to create private student
loans dischargeable in bankruptcy, turning the
clock back on that issue to pre-2005 bankruptcy law.
As We have done for the last 7 or 8 years, I joined fellow NACBA members to advise Congressional members and staff on important consumer law topics.
The student loan bubble is topical.
We explain, whether you change the bankruptcy law on student loan debt or ?not, the $1.2 TRILLION will not be re-paid.
So, what is plan B?
Better get one.
The current proposals HR 449 in the home, and Senate Bill 279, would at the very least put the $150 billion of private student loan debt back on the bankruptcy dischargeability table.
From our NACBA talking points:
According to data from your Consumer Financial Protection Bureau (CFPB), total student loan debt (both federal and) in the United States surpassed $1.2 trillion in July of 2013, rendering it second only to mortgage debt as the largest of all the types of debt that Americans hold.?Roughly 40 million Americans have college loans, and owe an average of $30,000 each. A share with the total $1.2 trillion debt is made of more than $150 billion in outstanding private student loan debt.?The CFPB estimates there are 850,000 private figuratively speaking, or 7 million borrowers in default on a federal or private education loan, with many more in distress.
As we argued, why would student loan debt be more tough to discharge in bankruptcy than tax debt?
That’s right. ?When it is income tax liability for your income, no employee, et cetera, and it is the right age, it is discharged in bankruptcy.
Student loan debt? ?Oh, no. ?It is important to file a separate lawsuit in bankruptcy court, and prove it could be an undue hardship to begin to repay the student loan debt.
My clients whorrrre managing to pay their college loans are living in their parents’ basement.
Many usually are not paying anyway, even if they settle for the folks, and, many just keep taking classes to kick the can down the road. So their student loans usually do not show up as in default, nonetheless debt grows and grows.
And the oldsters and grandparents who co-signed for figuratively speaking are also on the hook.
Contact your legislator to compliment these changes.