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Are changes coming for student loan debts in bankruptcy?

Many debts that Tennessee residents carry can be discharged in bankruptcy. For example, a person may be able to successfully discharge their credit card and medical debts through either Chapter 7 or Chapter 13 bankruptcy.

Student loan debts, however, have always been an exception to this rule. Although it has not been impossible to discharge them, the standard by which student loan debtors are judged in bankruptcy is difficult to meet and somewhat unclear.

At present, for a person to have their student loans discharged in bankruptcy, they must show that the debts impose an undue hardship on them. However, there is no established definition for what that term actually means. Generally, debtors have had to show that they are effectively hopeless with regard to ever getting their student loans paid off on their own.

Recently, though, the United States Department of Education has started asking the public for feedback student loan debts and the ability of consumers to discharge those debts in bankruptcy. The step is far from a guarantee that men and women who are overwhelmed by their skyrocketing education loans will find fast relief in bankruptcy, but it is a sign that the government is recognizing the very real problem that millions of people face.

Individuals who are struggling with student loan debts and payments may wish to begin investigating their debt relief options now so that they are prepared to make informed decisions in the future. With the help of debt relief and bankruptcy attorneys, student loan debtors may be well positioned to take proactive steps to control their debts and work toward financial freedom either through bankruptcy or other debt relief options.

Source:, "People with massive student debt hope Trump will let them declare bankruptcy", Annie Nova, Mar. 19, 2018

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
Phone: 423-624-4002
Fax: 423-624-0509
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