In a post by Market Watch, it seems the push to allow bankruptcy for student loans continues to gain momentum.
With recommendations from the Bankruptcy Institute’s Commission on Consumer Bankruptcy, a 274-page report was released with the proposed rule change to the bankruptcy code to discharge private student loan debt in bankruptcy.
Co-Chair American Bankruptcy Institute’s Commission on Consumer Bankruptcy retired Judge Elizabeth Perris said “the debt hanging over the debtor forever has a cost,”adding that “it’s a cost in terms of lack of purchase of houses, cars, having children and we just recognize that at a certain point for those people who want to avail themselves of bankruptcy, they ought to be able to get the fresh start and move on with their lives.”
Student loan debts are at an all time high at more than $1 trillion.
As a general rule, I advise my clients it is virtually impossible to wipe out student loan debt in a bankruptcy.
While it is unlikely that Congress would act soon, it is another step in the right direction as the report from the bankruptcy committee also offers suggestions on interpreting the current bankruptcy code for those saddled with student loan debt.
Alexander Hernandez has been representing clients since 1999 in the areas of bankruptcy, family law, and personal injury.
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