While the student loan forgiveness plan remains blocked – You have New Options
Some federal student loan forgiveness programs remain in place or are being expanded. And these programs can provide significant relief. One of these is something that has, in the past, been very difficult to achieve. Discharging your student loan debt through bankruptcy.
Discharging Student Loans in Bankruptcy
The Biden administration just recently announced new changes to federal student loan bankruptcy policies that may make it easier for some borrowers to discharge their federal student debt in bankruptcy.
Before it was very difficult to meet the “undue hardship” standards that would allow borrowers to eliminate their student loans in bankruptcy. Not only were the standards almost insurmountable but the process was lengthy and the litigation very costly.
The Education Department and Justice Department announced new policy guidance that will alter how the court handles undue hardship bankruptcy discharge requests by federal student loan borrowers.
Making it easier to include student loans in the bankruptcy discharge
The changes set specific requirements to prove you’re dealing with economic distress.
The government will:
- Consider whether your expenses equal or exceed your income.
- Assess if your inability to pay will continue in the future.
In order to include student loan debt in your bankruptcy discharge you will still need to meet certain requirements, but the threshold has been lowered and made more reasonable to attain.
Contact Our experience Debt Relief Team
You will need to complete an attestation form, to show the government that you meet the criteria to have your student loan discharged. It will be very important to complete this form accurately and having the help of an attorney experienced with the process will be critical. If you have any questions about discharging your student loans or any other debt relief matter, call Solvent Law for an absolutely free and confidential consultation 651-374-8881 or email us through our website.
