Data pulled online regarding the Fresh Start Act suggests student debt is a big crisis. According to information published, 45 million Americans collectively owe more than $1.7 trillion in student loan debt; of that, approximately 92% is publicly backed.
Has Student Loan Debt Been Dischargeable in Bankruptcy Up Until Now?
Until now, only certain student loans have potentially been dischargeable. Ninety-two percent of the current student loan debt is backed by the American taxpayers or being public related debt. Federal and state student loans typically are exempt from discharge and, up until now, have only been dischargeable by demonstrating undue hardship.
What Is Being Proposed Concerning Student Loans in the Fresh Start Through Bankruptcy Act of 2021?
The Fresh Start Through Bankruptcy Act of 2021, in essence, is a proposal to make federal student loans eligible for a discharge in bankruptcy if certain requirements are met. The requirements include having either made payments or having made payments for a time and been unable to make further payments. It needs to be 10 years from the date that payments on the loans began and then the inability to pay would have to be factored in. This would make federal student loans potentially dischargeable without showing undue hardship, which is very difficult to show today.
For more information on the Fresh Start Through Bankruptcy Act of 2021, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (205) 506-3354 today.