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Bill to help discharge student loan debt through bankruptcy
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Bill to help discharge student loan debt through bankruptcy

On Behalf of | Aug 13, 2021 | Bankruptcy & Asset Protection

Locals and out of state students come to Florida for the environment and the quality of their higher education. The one setback for these young students is the student debt that will continue with the long after they achieved their degree and obtained a career. This debt can be tremendous and crippling. One can find it challenging to stay on top of these payments while also managing their monthly bills. However, this may come to an end if proposed bill passes, allowing for student debt to be discharged through the bankruptcy process.

Student loan debt

Student loan debt is commonly knowns as a debt that is very difficult to discharge through the bankruptcy process. However, there is currently a bipartisan effort that would not only overhaul the student loan system but also make bankruptcy discharges more accessible for those with student loan debt.

The bill is called FRESH START, and it would help better enable borrowers to seek student loan debt discharge through the bankruptcy process. The idea behind this bill is the fact that too many people are haunted by student debt. This debt will often follow individuals to their grave, with the vast majority of these individuals being misled into taking out costly loans to attend for-profit colleges.

Discharging student debt

If this bill passes, it will allow individuals with federal student loans to become eligible for a discharge of student debt through bankruptcy after 10 years have past since the borrower’s first loan payment was due. For those with loans less than 10 years, they will have to go through the current process. The overall goal of this bill is to provide a fresh financial start for individuals you have struggled to repay their student debt for at least a decade.

Struggling with debt of any kind can be difficult. Financial hardship can impact all areas of a person’s life. Thus, it is important that one takes the time to explore options when it comes to addressing these debts and obtaining a fresh financial start.