Ever chatted with someone who has so much debt they feel overwhelmed?
Maybe Ill just file for bankruptcy, they might say.
But then, the inevitable caveat: Id still have my student loans, though.
And in the coming years, it may actually get easier.
You must pass whats called the undue hardship test.
There is evidence that this hardship will continue for a significant portion of the loan repayment period.
You made good faith efforts to repay the loan before filing bankruptcy.
And that rate is going up, he toldNPR.
Is the system broken?
Student loan borrowers versus bankruptcy goes all the way back to the 1970s, according toCNBC.
In the 1990s, that waiting period was increased to seven years.
Since 2005, theres beenno waiting period at all: just the requirement that you prove your undue hardship.
But that method may not work for todays student loan borrowers who are mired in debt.
Warren, for one, doesnt want to wait for Congress to relax the rules for discharging student loans.
In 2005, after he consolidated his loans, he had a balance of about $116,000.
By 2019, his loans had grown to more than $221,000.
The judge discharged the loans.
This Court will not participate in perpetuating these myths, she wrote.
The case makes a major statement about the relationship between student loans and bankruptcy, Tayne said.
Thats not to say that hordes of borrowers will turn to bankruptcy to have their student loans discharged.
If youre considering bankruptcy, you should consider consulting with a financial attorney.
