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New bill seeks to provide a way to discharge student loan debt

On Behalf of | Jul 1, 2019 | Uncategorized |

Maryland residents help make up the millions of Americans who struggle under crushing student loan debt. According to NBC Universal, more than $1.5 trillion dollars is owed by more than 44 million Americans. It is extremely difficult to discharge student loan debt through bankruptcy, but many graduates struggle to find work that allows them to make their payments. Recently, a United States senator introduced a bill that would help wipe away student loan debt when a consumer filed for bankruptcy.

Although the senator stated that bankruptcy should be the last resort, he introduced the Student Borrower Bankruptcy Relief Act of 2019 because so many borrowers lack a realistic path to paying back crushing debt caused by high tuition costs, high costs of living and lower wages. In the current bankruptcy code, medical and credit card debt can be discharged through bankruptcy, but federal student loans were made completely nondischargeable in 1998.

The senator pointed to the student debt crisis as the reasoning behind the bill, as many students are saddled with student loan debt for life with no way to repay the loans. Before 1976, private and federal student loan debt was fully dischargeable. Currently, criminal fines, overdue taxes, alimony and child support payments are not discharged when an individual files for bankruptcy.

No matter what type of debt a consumer has, bankruptcy is a viable option to provide a path to a fresh financial start and the removal of extreme distress caused by crushing debt. This particular senator believes that bankruptcy that removes student loan debt should be an option to get graduates and consumers back on their feet after a rough financial time.

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