Bankruptcy Discharge May Be Extended to Student Loans

Written by Adam Peck Category: Nursing Homes January 23rd, 2013 2 min read

Bills recently introduced in the Senate and House aim to treat private student loans more like credit card and other consumer debts — meaning they would be discharged if a borrower meets the court’s strict bankruptcy criteria.

Since 2005, bankruptcy law has prohibited private student loans from being shed in all but the most extreme cases. Other types of debt in this category include overdue taxes and criminal fines.

Those who deal with bankruptcy proceedings say the debate can be boiled down to a simple maxim: “Where you sit depends on where you stand,” Los Angeles Bankruptcy attorney Steven C. Peck indicates.

“If you believe ultimately it’s the consumer’s responsibility to not take on more debt than you can handle … then you’ll come down on the side of the lender,” Peck who may be contacted toll free at 1.866.999.9085 says. “If you believe that lenders engage in practices that were predatory or misleading … then you’ll come down on the side of those who feel this is no different from any other consumer loan and should be discharged in bankruptcy.”

The discussion comes as more students are turning to private student loans to finance their college ambitions — which themselves are growing ever more expensive.
A more robust economic outlook and changes to student lending enacted as part of the health-care reform law are also thought to be encouraging private lenders back into the market.

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.