Student Loan Bankruptcy Success: A New Hope
In the past, student loans were seen as nearly impossible to get rid of through bankruptcy. But things are changing.
A Significant Increase in Success Rates
A recent study shows that the success rate for people trying to discharge student loans in bankruptcy has gone up to 87%. This is a big jump from:
- 61% in 2017
- 40% in 2007
What's Behind This Change?
New guidelines from the Biden administration make it easier for borrowers to show their financial struggles and make their case. The process now involves a 15-page form, which is simpler than before.
The Burden of Student Loans
Over 42 million Americans have student loans, with a total debt of over $1.6 trillion. For many, this debt is a huge burden. The new process has been life-changing for some, allowing them to finally see a way out of their debt.
Debunking the Myth
There's still a myth out there that student loans can never be discharged in bankruptcy. This myth stops many people from even trying. Only a small number of borrowers who file for bankruptcy actually take the extra step to request a student loan discharge.
A Streamlined Process
The new process is streamlined and easier. Bankruptcy attorneys should be recommending it to all their clients with student loans. For many, bankruptcy might be the only real way out of their debt.
