The Student Loan Discharge Dilemma
President Obama has recently been considering measures that might allow those with enormous student loan debt to have those debts discharged under bankruptcy. Currently, student loans are not dischargeable under bankruptcy, but a new law might allow debtors to include these loans in their unsecured debt amounts. However, there is fear that this measure might spark a downward spiral for an already struggling economy.
The Student Loan Dilemma
Currently, American students owe upward of $1.3 trillion in student loan debt. These debts are crippling for many who are unable to find jobs in their fields or can only find part-time work. However, individuals are currently prohibited from discharging these debts as part of a bankruptcy. If the new law is passed that allows student loans to become dischargeable like any other unsecured debt, it is likely that there would be financial repercussions aside from the effect on debtors. Critics argue that making student loan debt dischargeable might have the effect of stifling student loan availability to students, as lenders would become wary of any borrower who could not display creditworthiness. Further, discharging student loans may have the effect of sending taxes soaring and the American economy into a financial downward spiral. Most student loans are guaranteed by the federal government, so defaults would ultimately be remedied by taxpayer funds. If the government refused to honor these debts, then lenders could face bankruptcy themselves.
Can I Discharge My Student Loan Debt?
While the future of student loan debt discharges are uncertain, there are things you can do right now if you are suffering from insurmountable student loan debt. While most student loans cannot be discharged except in cases of extreme hardship, you can discharge your other debts so that you can repay your student loans in a timely fashion. You may also be able to use a bankruptcy as proof that your student loan debt payments should be reduced to a more manageable sum. If you are facing crushing debt, whether from student loans or any other source, contact the bankruptcy attorneys at the Oswalt Law Group. There is hope for the future if you manage your debt correctly. We can help you file bankruptcy and achieve a fresh financial start for your life without the burden of unpayable debt. Call us today for a consultation and learn how we can help you take control of your financial future.