Student Loan Relief -Fresh Start Through Bankruptcy Act

Senators Dick Durbin (D-IL) and John Cornyn (R-TX) have introduced the “Fresh Start Through Bankruptcy Act,” the first bipartisan bankruptcy legislation to come through the Senate in years. The Act also has the endorsement of the National Association of Consumer Bankruptcy Attorneys. The Act would allow student borrowers to discharge federal student loans, something that has not been possible since before 1998. The Act however, does not alter the dischargeability of private student loans.

Student Loan Debt Crisis

Although a bankruptcy discharge can provide a much needed fresh start, there is one type of debt that nearly always survives, preventing the true ability to start over: student loan debt. Under the current law it can be extremely difficult to discharge student loan debt in bankruptcy, and because the lenders usually fight tooth and nail to prevent the discharge, any…