Bankruptcy Answer To Private Student Loan Debt May Be Here By The End Of This Year!

On behalf of Bankruptcy Law Firm of Clare Casas on Saturday, September 18, 2010.

This past week, the House Judiciary Subcommittee on Commercial and Administrative Law took the first steps in reversing language in the 2005 bankruptcy law related to private student loan debt by approving on a 6-3 party line vote H.R. 5043, the Private Student Loan Bankruptcy Fairness Act.

The proposed legislation will restore fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt. Under the bill, privately issued student loans will once again be dischargeable in bankruptcy.

The bill now goes before the full Judiciary Committee. Though time is short in this legislative session, we are hopeful that the bill will see full Committee action before the end of the year. Similar legislation has been introduced in the Senate (S. 3219) by Senators Durbin (D, IL), Whitehouse (D, RI) and Franken (D, MN). Call or write to your congressional representatives today to voice your support for this bill and for a bill to allow bankruptcy judges the right to cram down mortgages on primary residences.

Many people who I meet with to discuss their debt relief options have substantial student loan debt, both private and government-issued. The Judiciary Committee’s action was the first step in restoring fairness to the bankruptcy process by eliminating private student loan debt.

If you’d like more information about this proposed change to the bankruptcy law and how it can benefit you, call or email today for a free consultation! Keep checking back for updates on this bill’s passage!