Dischargeability of Student Loans in Bankruptcy: Will the Law Change?

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

The issue is the treatment of student loans in the federal bankruptcy code and whether this treatment ought to change. Currently, it’s nearly impossible for people to get rid of student loans in bankruptcy court, even though people in over their heads with credit card or gambling debts can often discharge those loans.

At the moment, a few members of Congress are trying to change the rules, so that people with loans from for-profit student-loan providers like Sallie Mae would be able to rid themselves of the debt in bankruptcy, as they were able to do before 2005 when the law changed says Los Angeles Bankruptcy Attorney Steven C. Peck.

So who is right here? Should private student-loan debt sit in the same category as things like criminal fines and back taxes owed, since those obligations are also nearly impossible to discharge in bankruptcy court? After all, lenders accept a fair bit of risk underwriting five-figure loans to 19-year-olds.

Or is it madness that people who merely want to educate themselves and improve their income and prospects can get stuck with the loans forever, while others who buy too big a Lexus can get rid of that debt when they file for bankruptcy?

Share it

Questions? Check with Peck Today

Blog Lead Form

Elder Abuse and Neglect in Assisted Living Facilities

Elopement in Nursing Homes

Assisted Living Abuse

Settlement Reached in Assisted Living Facility Death

Assisted Living Abuse and Neglect Attorneys

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.