Is student loan discharge in bankruptcy now within reach?

[Demovictory9]

https://mooresvilletribune.com/business/investment/personal-finance/is-student-loan-discharge-in-bankruptcy-now-within-reach/article_7c80eac1-8f46-5805-9531-f3816167ad63.html

Anna Helhoski, NerdWallet
Student loan borrowers who seek to have their debt canceled in bankruptcy — what's known as discharge — typically find it an expensive process with standards that can be difficult to meet. But recent bankruptcy court rulings and lawmakers' support of relief for overburdened borrowers may signal a change is coming.

In January, a New York court discharged over $200,000 of student loan debt for one borrower. Then, in August, a federal appeals court ruling eliminated $200,000 for a Colorado couple who held 11 private student loan accounts. And in September, a New York judge ruled to enforce a prior bankruptcy discharge of a borrower’s $400,000 of federal student loans that a servicer had failed to carry out.

These decisions could serve as a precedent for future bankruptcy cases involving student loans, says John Rao, an attorney with the National Consumer Law Center.

"A lot of people, even some of the lawyers who represent consumers, thought for years that you really shouldn’t even try because there's not a chance you’ll win, but I think everyone is looking at it now with sort of a fresh look," Rao says.

Courts aren’t the only example of potentially easing standards. The House of Representatives recently took up a bill that would expand bankruptcy relief to more student loan borrowers. And the platform of former Vice President Joe Biden, the Democratic presidential candidate, included a bankruptcy reform proposal to end rules that make it "nearly impossible" to discharge private student loan debt.


A possible reason for a shift toward dismissing these loans in bankruptcy is the student loan debt crisis in the U.S.

[smirkymonkey]

1. K&R

I would be more than happy to pay back what I have borrowed What I have a problem with is the extreme amount of compounded interest that they have charged me on those loans which have ballooned them to almost three times what I borrowed. It's insane. Who gets that kind of return on an investment?

We need debt relief NOW! As I have said, I don't expect my original debt to be wiped out, but I do want them to do something about the usurus rates of interest we have been force to pay, especially when they have never given us a break for unemployment or under-employment. They should not be getting rich off of our misfortune.

[mopinko]

2. i knew a dude who was a lawyer.

he lived in cali, and got busted growing weed right before it was legal there.
lost his license. lost his practice.
went bankrupt.
still owes $100k in student loans.

he works as a paralegal and he likes it better than practicing law. less stress.
but yeah. northwestern law school.

[Buckeyeblue]

3. It's been a few minutes since I've been in college

But how does $400k in student loans happen?

As I told my daughter, get your degree at the most inexpensive state school. If you need to go to grad school only go full time if you can get a TA with a stipend. Otherwise find a job that has tuition reimbursement and let your employer help pay for it. It might be a tad slower but at least you aren't buried in student loans.

In Michigan, UM is a great deal more expensive than say a Wayne St. But I would argue you get just as good an education at Wayne St. Maybe better considering the more diverse student population.

The opportunities you get to learn and gain experience as an undergraduate are based on your desire to seek them out and participate.

[MissB]

4. Probably private loans

I always assume grad school- doctors or lawyers.

Both of my kids had their undergrad covered (youngest graduates this spring). Oldest has his 5-year PhD program fully covered including a generous monthly stipend.

The youngest is considering law school. He’d have large loans. I’m rather hoping he doesn’t go that route but he’s an adult. We’d help him out with the cost but he’d be going right around the time Dh retires. Not sure Dh wants to stay in the workforce to cover those costs.

[Buckeyeblue]

5. I almost went to law school

It's a great degree to have. It can be very versatile. Lots of businesses need lawyers to keep them compliant with state, federal laws and regulations. Very few lawyers ever see the inside of a courtroom.

But if you can find a good place to work, paying off student loans may be a perk the employer offers.