Although there are many important policy differences between the Republican and Democratic candidates this fall, one issue, in particular, could have a huge impact on thousands of student loan borrowers. Currently under the Bankruptcy Code, student loans are nondischargeable — meaning they do not go away in bankruptcy — unless you can prove that repayment would be an “undue hardship.” The legal standard for proving an “undue hardship” is extremely difficult to do. Additionally, it requires an “adversary proceeding,” which is essentially a lawsuit inside a bankruptcy case. It is time consuming and very costly. As a result, the vast majority of people who file bankruptcy do not receive a discharge of their student loan debt.
Currently, House Democrats have proposed H.R. 2648, titled the “Student Borrower Bankruptcy Relief Act of 2019.” That bill provides that student loans would no longer be on the list of nondischargeable debts. Instead, student loans could be discharged, or wiped out, just like credit card debt and medical bills. The bill is currently before the Judiciary Committee for markups and debate.
In the United States, student loan debt has risen to an astronomical $1.6 trillion. This debt load arguably prevents people from buying a house, opening a business, or staying home to raise children. People are forced to work just to afford their student loan payments. We can, and should, provide additional relief to those who have pursued an education in good faith and cannot afford to pay their student loan debt.
So when you cast your ballot this November, consider the millions of Americans struggling with student loan debt and vote wisely. If you’d like to discuss your options under the current Bankruptcy Code, contact attorney Aubrey Thomas, an Arizona State Bar certified bankruptcy specialist at (928) 233-6800 and schedule your free one-hour consultation today.