New Law Would Help Injured Vets Discharge Student Loans
Nearly all unsecured forms of debt can be discharged when filing for bankruptcy, with the glaring exception of student loans. Attending college and graduate school has never been as necessary to building a successful career as it is now–nor has it ever been as expensive. Rare is the student who can complete a bachelor’s or master’s degree without incurring a substantial amount in student loans. The issue of rising student loan debt and the way it cripples graduates has become a hot topic, with some lawmakers coming forward with suggested changes to the way loan repayment or discharge is handled. A New York member of Congress recently introduced a bill which would make it easier for an injured servicemember to obtain loan discharge for their education-related debts.
Loan discharge available to totally and permanently disabled persons
Currently, a person with a total and permanent disability can apply for a discharge of their student loans. This form of discharge is only available where the debtor: 1) receives Social Security Disability Insurance or Supplemental Security Income benefits, 2) a physician has determined the debtor to be totally and permanently disabled with a condition that has lasted at least five years and will last at least five years more, or 3) is a veteran who has been rendered unable to work with a service-related disability.
Law would notify vets of right to discharge
Persons who receive SSDI or SSI based on a total and permanent disability receive an automatic notification that they are eligible for discharge of their federal student loans, but those servicemembers who receive their benefits through the VA receive no such notification. The new law would create a system that provided automatic notifications of their eligibility for student loan discharge when an injury received in the line of duty has rendered them permanently unable to work.
While not widely known, there are several other conditions under which a student borrower can have their loans either forgiven or discharged in bankruptcy. These include cases where a borrower is experiencing undue hardship as a result of their student loans, closure of the school that the debtor attended, or discharge due to fraud committed by the school. Speak with a knowledgeable California bankruptcy attorney for more information on student loan discharge.
If you are struggling with mounting consumer debt and need assistance in determining your options for debt relief, contact the compassionate and effective Ventura bankruptcy lawyers at Rounds & Sutter for a consultation, at 805-650-7100.