With national student loan debt increasing to more than $1 trillion and Vermont’s graduates stuck with the highest debt-to-earnings ratio, state lawmakers are urging Congress to let students file for bankruptcy to discharge their student loan debt.
This week, members of the Vermont House gave preliminary approval to J.R.H. 27, a resolution that calls for “federal action to alleviate the national student loan debt crisis.” Federal bankruptcy code prohibits student loan debt from being discharged in bankruptcy, except in cases of “undue hardship.”
“The General Assembly requests Congress to amend the federal bankruptcy code to eliminate the prohibition on relief from federal or private student loan debt through the federal bankruptcy system,” the resolution states.
J.R.H. 27 illustrates the scope of the problem. Student loan debt tripled between 2005 and 2015, increasing to $1.19 trillion, according to the Federal Reserve Bank of New York’s Consumer Credit Panel. Nationwide, almost 7 million student loan borrowers, or 17 percent, are in default as of summer 2015. This is up 400,000 defaults, or 6 percent, compared to 2014.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.