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Disabled veterans may see student loan debt relief under new bill

Many servicemen and servicewomen from Tennessee and across the nation give more than just their courage to our country -- they give their health. These veterans may find that their disabilities have changed their lives forever, and in some ways have made their life more challenging. For example, if a person is so disabled that they cannot work, they may not be able to pay back their debts, including federal student loans. In fact, almost 34,000 veterans with a disability are behind on their student loan payments.

However, these veterans may find student loan debt relief under a new bill that has bipartisan support. This proposal -- known as the, "Federally Requiring Earned Education-Debt Discharges for Veterans Act," -- would dismiss qualifying veterans' federal student loan debts, even if the veteran had not applied for debt forgiveness programs for which veterans with a 100% disability may qualify.

This bill is important, as currently only approximately 20% of disabled veterans eligible for the debt forgiveness programs currently offered for veterans with a 100% disability take advantage of these programs. And, over 50% of those veterans currently have federal student loans that are in default, which only compounds their financial problems. The bill is currently awaiting approval by the House and Senate before it can move on to the White House to be signed into law.

Any person, veteran or not, who is facing insurmountable debt may feel a very heavy burden has been placed on them. This may be especially true if they are facing home foreclosure or asset repossession. Financial setbacks often take the face of health conditions that result in hefty bills and leave a person unable to work to earn a salary that would allow them to pay back those bills.

These individuals may find debt relief through certain federal programs, but Chapter 7 or Chapter 13 bankruptcy may be the most appropriate. Filing for bankruptcy is a viable way to address your outstanding debts in a way that allows you to pay back what you can and culminating in the discharge of many of your debts. Once the bankruptcy process is complete, the debtor is given a fresh financial start as they move forward into the future, which is why many individuals who are facing overwhelming debt choose to work with an attorney who is familiar with the bankruptcy process.

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Kenneth C. Rannick, P.C.
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Chattanooga, TN 37411

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