According to CNBC, there are some people who believe that if the Bankruptcy Code was amended to allow the discharge of student loans, many Americans who are struggling financially would be saved. The CNBC article reports that student loans account for approximately $1 trillion of debt! Between student loans and mortgage debt discharge, most individuals could obtain a true financial fresh start.
Many college graduates have a significant amount of debt and a difficult time finding employment. Currently, bankruptcy law only allows the discharge of student loans after a showing of “undue hardship.” To learn more about this standard, read our blog titled “Will Student Loans in New Jersey Increase?” There are several pieces of legislation pending before Congress seeking to allow the discharge of private or commercial student loans.
Changing how mortgage debt is treated in bankruptcy would provide assistance to homeowners trying to avoid foreclosure. If a homeowner could “cramdown” a mortgage to the current value of the home and pay lower mortgage payments, it could help resolve the real estate crises across our country. Of course, this change would not provide help to debtors who houses are properly valued.
Obviously, debt forgiveness is a controversial topic. If you have questions regarding your mortgage debt or student loans under the current bankruptcy law, contact Levitt & Slafkes, P.C..
If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.