People continue to struggle with student loan debt. The only form of debt that causes more hardship is mortgage debt. Student loans beat out credit card debt and surpass health care expenses. Unfortunately, unlike credit card debt and health care expenses student loan debt is not as easy to manage.
This point brings us back to our original question: is student loan debt eligible for relief through a successful petition for bankruptcy? The answer: sometimes.
First, we will cover the way it currently works. In some cases, the bankruptcy court will allow student loan debt to qualify for relief. In order to qualify, the person petitioning for relief must generally show they suffer extenuating circumstances that face a hardship and that this hardship is not likely to resolve in the near future. The court also generally requires the petitioner to show that they have made good faith efforts to make payments in the past.
Next, a look into the future. Lawmakers have heard complaints from their constituents. They hear how much we struggle to manage this looming debt and start a fresh life and some are taking action. Senator Elizabeth Warren, for example, has introduced a bill that would remove a portion of the bankruptcy code that makes it so difficult to discharge, or forgive, student loan debt.
If you struggle with student loan debt you are no alone. There are options. Contact an attorney to discuss the best way to get a fresh financial start and move on with your life.