Biden Cancels $1.2 Billion in Student Loan Debt, What Now?

Biden Cancels $1.2 Billion in Student Loan Debt, What Now?

Biden cancels $1.2 billion in student loan debt for 150,000 borrowers, bringing the total cancelled debt to $138 billion for 3.9 million borrowers. This recent cancellation benefitted those enrolled in the income-driven repayment plan called SAVE. If you didn’t sign up or didn’t qualify for SAVE and still feel the weight of your student loan debt, don’t worry. Bankruptcy could be your way out.

Bankruptcy and Student Loans

Did you know that bankruptcy can help you with your student loan debt? According to bankruptcy code, student loans can be discharged if there is proof of undue hardship. This essentially means that you must prove to the court that you cannot maintain basic living conditions while paying off student debt. You must also prove that the debt will impact you for the majority of your repayment plan. Undue hardship can be difficult to prove since it is loosely defined by the bankruptcy courts. Luckily, there have been efforts in recent years to broaden the definition and make the process easier. In fact, last year Biden sent out experimental guidance that encouraged the government to cooperate with student loan borrowers seeking relief.

What is Bankruptcy?

Bankruptcy is the legal process by which a business or individual can seek relief for debts that they don’t have the means to repay. Filing for bankruptcy may sound intimidating, but it can do wonders to restart your life. Along with its potential to eliminate student loan debt, it can also stop collections, clean up your credit, and help you deal with other debts such as medical debt, credit card debt, and auto loans. Here at The Law Offices of Dax J. Miller, we offer Chapter 13 and Chapter 7 bankruptcies. A Chapter 13 bankruptcy allows you to place your debt into a repayment plan to help you pay off the debt you owe to your creditors. A Chapter 7 bankruptcy gives you the opportunity to discharge your debt.

Let Bankruptcy Help You with Student Loan Debt!

Having trouble making ends meet with your student loans or other debts? Call The Bankruptcy Law Offices of Dax J. Miller today to schedule a free phone consultation. We can help you figure out what the best move is for you.

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