Getting a good education has its definite perks, however, it can also have its expensive downfalls. For those who are unable to get a high-paying job or who find themselves drowning in debt, the burden of a student loan can seem overwhelming. Even more difficult is the fact that student loans are rarely covered in bankruptcies and, when they are, the process is lengthy and frustrating. Thankfully, some lawmakers are lobbying to make student loans easier to include in a bankruptcy case.
Student Loans and Bankruptcy Now
Currently, student loans are exempt from traditional bankruptcies. While medical bills and credit card debt may be easier to refinance or completely wipe away through a Chapter 7 or Chapter 13 bankruptcy, this is certainly not the case with student loans. To see relief from student loan payments, the individual filing for bankruptcy has to go through a process called “adversary proceeding”, where they have to prove that they have experienced undue hardship that makes it impossible for them to make their payments. The result can be an unpleasant process where the lender fights against the individual in court, and a judge determining if the situation really is worthy of being called “undue hardship”. Not only does this process take a lot of time but it can also get expensive to fight the lenders in court — none of which helps someone who is already struggling financially.
See also: Proving Undue Hardship for Student Loans in Pennsylvania
How Things May Change
Bill H.R. 2648 is also called the “Student Borrower Bankruptcy Relief Act”. The entire purpose of the bill is to help individuals receive freedom from their crushing financial debts with as little hassle and expense as possible. The bill has the approval of House Democrats that are working to mark up and debate the bill, While many doubt that it will pass the Senate, it is still a step in the right direction for those who seek bankruptcy reform.
What This Means for You
If you owe student loans and are struggling with a heavy debt load, then H.R. 2648 is a bill that can potentially help your future. If it is passed and becomes a law, the bill will make it easier than ever to do away with hefty student loans. You might be able to see your student loans be completely wiped away or presented in more manageable payments. For now, though, there are other financial options a bankruptcy lawyer can help guide you through for current relief.
While it’s wonderful to hear that bankruptcy reform may be coming in the near future, many individuals can’t wait to file. If you are drowning under debt, then you should start taking steps toward financial freedom now by talking with a bankruptcy attorney. Let our team of experts explain the best options for your unique case and guide you through the process of an “adversary proceeding” for student loans. Contact us today!
The attorneys at Sadek Bankruptcy Law Offices have handled thousands of Bankruptcy cases in Philadelphia and the surrounding counties of Montgomery, Delaware, Bucks, and Chester. We are also licensed in the State of New Jersey. Contact us today to schedule your free consultation at 215-545-0008, or fill out the below form and we will be in touch with you shortly.