If an idea by several U.S. Senators and U.S. Representatives turns into law, those considering bankruptcy in Modesto with tens or hundreds of thousands of dollars in student loans may soon be able to shave off the debt.
A Modesto Bankruptcy Attorney should be consulted by those who have a great deal of student loans. While these loans are often not subject to dishcarge, there are a number of ways bankruptcy can hel. With jobs scarce right now and the economic recovery slow, bankruptcy may be a good option for those who qualify.
According to a recent article published by U.S. News & World Report, three Democratic senators and four Democratic representatives introduced parallel bills that would allow people with burdening student loans to be relieved of that debt through the bankruptcy process. One of the sponsors is George Miller, whose district includes an area northwest of Modesto.
The bills would reverse a law change that went into effect in 2005, which made student loans ineligible for bankruptcy relief, unless the person is physically unable to work to pay them off and the loans are an undue burden.
The bill comes on the heels of a student by the John. J. Heldrich Center for Workforce Development at Rutgers University, which found that 56 percent of 2010 graduates were unable to find work. That number is down significantly from the classes of 2008 and 2009. A recent New York Times article stated that student loan debt outpaced credit card debt for the first time last year and is likely to top $1 trillion this year.
"Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans were protected during bankruptcy, said Sen. Dick Durbin, D-Ill. in a press release. "This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. Today's bill would restore the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy."
With the economy slow to recover after the Great Recession, many recent-grads are struggling to find work, or are having to look to other areas outside of their field of study simply to be getting a paycheck. Coupled with having to live off of credit cards to get by in the mean time, many people are stuck in a tough spot.
Even if they've recently found work, they may have piles of credit card debt on top of student loan debt, making for a difficult time financially. If these bills become laws, many people who are struggling to get by and are considering bankruptcy in Modesto and throughout California will be significantly aided in the process. The bill has the backing of several educational organizations, the article states.
If you or someone you know needs to speak to an experienced and knowledgeable bankruptcy lawyer in Modesto or Stockton, contact the Law Offices of Ben Roberts for a free and confidential appointment. Call today 1-209-522-7500.
More Blog Entries:
Those Considering Debt Solution Agency should speak with Modesto Bankruptcy Attorney: June 13, 2011
Additional Resources:
Burden of College Loans on Graduates Grows, by Tamar Lewin, The New York Times
