Under the current bankruptcy laws, student loans cannot be discharged after you file for bankruptcy. However, a new bill aims to help people in New Jersey and beyond who have student loan debt. If this bill passes, it would allow people to discharge their student loans when they file for bankruptcy.
A new bill could relieve people of their student loan debt
In 2020, the overall student loan debt has reached trillions of dollars. Thousands of people have six figures of student loan debt and no reasonable way to pay it off. While filing for bankruptcy allows you to discharge certain debts, student loans will remain on your record until they’re finally paid off.
To alleviate some of the trillions of dollars in student loan debt, a new bill would allow people to discharge their student loan debts when they file for bankruptcy. While they’d still have to deal with the impact on their credit score and other issues associated with bankruptcy, they could eliminate one of their biggest debts and get their finances in order.
If the bill passes, the Consumer Bankruptcy Reform Act of 2020 would also make it easier for people to set up payment plans so that they can pay back their non-dischargeable debts. The bill would also prevent creditors from seizing people’s homes and vehicles to pay back their debts.
What can you do in the meantime?
If you’re thinking about filing for bankruptcy, it’s never too early to talk to an attorney. Even if you’re not ready to make the final decision, an attorney could answer your questions and help you decide which form of bankruptcy is right for you. When you’re ready, your attorney could help you file for bankruptcy and start paying off some of your debts.