If you have student loan debt in New York or anywhere else in the U.S., it’s extremely difficult to discharge your debt through a bankruptcy filing. The standard for being able to discharge student loan debt is “undue hardship.” This means you have to prove that you are physically unable to work and/or you’re unable to find any substantive employment.
But there is hope.
Recently a Congressional subcommittee held hearings on the topic of making student loans dischargeable. The gist of the hearings is well summed up by a quote from John Conyers (D-MI) (courtesy of an article on True/Slant by Amanda Becker):
Your yacht is dischargeable in bankruptcy, your vacation place is dischargeable in bankruptcy, your second or third homes are all dischargeable in bankruptcy… then you run into these people trying to get an education who go to a bankruptcy judge and no, the door is closed.
What does all of this mean? Perhaps in the near future, you may finally have the option of discharging your student loans in a bankruptcy filing. This would be a huge help to a good number of people, especially as the earning power has decreased relative to the cost of a college education these days.
Of course, the operative word in all of this is “perhaps.” Assuming it gets through the House, it still would also have to get through the Senate, which is perceived to be a bit more of a challenge. Plus, there is a large contingent of banks in the private student loan business out there who have every intent to prevent such a change.
Still, it is a potentially positive development for anyone contemplating bankruptcy who is concerned about their student loan debt.
If you have additional questions about student loans and bankruptcy, or if you’re simply considering bankruptcy attorney Brooklyn NY and need some answers, feel free to contact me for a free initial consultation to discuss your situation and learn about all of your options.
