Federal Law Could Change
If it is up to Tennessee Democrat Steve Cohen, student loans
will soon be able to be written off through bankruptcy
proceedings. Right now if you declare bankruptcy your student
loans stay on your credit even if nothing else does. Years ago
people were declaring bankruptcy and writing off these loans so
they thought that it might be a good idea to get rid of that
option. Now when you declare you will lose your debt, but you
still have to pay back the government. This is good for those
people who could afford them but were choosing not to – but
terrible for those people who really could not afford them.
Cohen said that they think that student loan debt should be
treated the same as any other debt and that they should be able
to get rid of it if they cannot afford to pay. Take for example
Student A goes out into the real world and can not get a job.
She still has to pay for the loans that she took out. So Student
A declares bankruptcy on all of her debt, yet there is her
student loan still waiting to be paid.
That could all change. There is no word yet as to how it will
affect people who have already declared that were not allowed to
write them off the first time. There is bound to be a fight for
the allowance of getting rid of those loans if you have declared
within the last two or three years especially.
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