Washington, D.C. – Student loan debt is crippling and poses the threat of becoming the next economic bubble that could go bust. Members of Congress recognize this threat and are looking into meeting this problem head on.
A Senate judiciary committee heard testimony on March 20th about the looming crisis of student loan debt and bankruptcy.
For the past two decades, debtors and bankruptcy attorneys have been unable to have student loans discharged unless they can prove undue hardship which is nearly impossible to do.
Sen. Dick Durbin (D.-Ill.) believes the bankruptcy laws should be changed and introduced legislation in 2011 that would make it possible for people to have their private student loans discharged through bankruptcy.
In the hearing, Durbin said, “There is no reason why private student loans should get treated differently from other private debt in bankruptcy. And it is especially egregious that these private loans are non-dischargeable in cases where a student was steered into a loan while the student was eligible for safer federal loans.”
Bankruptcy lawyer can a number of debts such as mortgage and car loans discharged or reduced, but an obscure law prevents a person from doing the same with student loans. Currently, student loans have surpassed credit card debt in the U.S.
Anyone who has debt that they are unable to pay off can seek out the advice of a bankruptcy attorney to detail their options for getting out from under the debt and return to a better financial state.