Most alumni and students have a loan debt of at least five figures, with the average student debt in the country reaching over $32,000. Some individuals in Iowa and other states even report loan debt that reaches six figures. This is a crippling amount of debt that may even lead some to devastating circumstances. The United States government is in the process of taking steps to alleviate some of this debt and to give you the relief that you need.
Members of the U.S. Senate and House of Representatives introduced a measure that would treat student loan debt the same way as other debts. The measure is part of the Consumer Bankruptcy Reform Act of 2020, and it would allow students and alumni to file for chapter 10 bankruptcy due to student loans.
The truth of bankruptcy
It is important to realize that bankruptcy should only be a last resort for your student loan debt. The bankruptcy will remain on your credit report for at least seven years, making it difficult to get approval for loan and credit card applications. With that being said, filing for bankruptcy can provide relief by enabling you to set up better payment arrangements and have some or all of your student loan balance erased.
How to file for bankruptcy
You do have to take specific steps under bankruptcy law to file for bankruptcy. Among other things, you must pay a fee and fill out various documents, including the petition for bankruptcy. You must file the documentation with the courts and give the documents to a bankruptcy trustee for review. Filing for bankruptcy also requires that you take a credit counseling and debtor education course.
There may soon be a relief for your student loan debt. Filing for bankruptcy is a difficult choice to make, but it can give you the relief you need when debt has become too much to handle. You can contact a lawyer with experience in bankruptcy law and compassion for your situation to help make the bankruptcy process go as smooth as possible.