Additional Coverage:
- How a student-loan borrower got $155,000 in debt wiped out through bankruptcy using new relief guidance (newsbreak.com)
Student Loan Bankruptcy Relief for Borrowers
A 61-year-old woman, Alrena Dale, has seen her $155,000 student loan debt wiped out through bankruptcy. President Biden’s revised bankruptcy guidance made this relief possible, simplifying the process for borrowers.
The previous standard required borrowers to prove “undue hardship,” which was difficult to meet. However, the new guidance establishes clearer guidelines and allows borrowers to self-attest to their financial difficulties, making the process faster and easier.
This guidance has significantly improved student loan bankruptcy for borrowers. Bankruptcy attorneys report success in discharging student debt for clients who have struggled for years. However, they emphasize the need for more outreach and education to encourage attorneys to fully utilize the process.
Dale expresses immense relief and gratitude for her discharged debt. She feels free from the burden of working multiple jobs to cover student loan payments.
Success Stories and Challenges
Attorney couple Bob and Tammy Branson have discharged over $1 million in student loans since the new guidance. They credit the self-attestation form for simplifying communication between borrowers and the government.
Dustin Baker, another bankruptcy attorney, has also seen positive results. He highlights the ease of incorporating the guidance into his work and the support provided by the Justice Department.
Despite these successes, challenges remain. Igor Roitburg of Stretto points out that the timeline for bankruptcy decisions can vary, which can deter borrowers and attorneys from participating.
Dale’s Perspective
Dale emphasizes that bankruptcy was her last resort. She believes trade schools should be considered to avoid student loan debt. However, without the bankruptcy option, she would have had to continue working multiple jobs to pay off her loans.
Those struggling with student loan debt are encouraged to seek guidance from bankruptcy attorneys and explore potential relief options.