As per the new bill introduced by Sheldon Whitehouse of Rhode Island, the process of discharge of private student loans in bankruptcy has become far easier for borrowers than it was before.
Some of the private debt like credit card debt, auto loans and mortgages can be discharged by bankruptcy. But filing bankruptcy does not discharge other student loans from private lenders such as banks or other financial institution. With private alternative student loans, the debt students receive is liable to be discharged in the same way like other private debt. If you look for advice from a bankruptcy attorney regarding bankruptcy laws changes of your state it can help you better.
The old rule stated that if you filed for bankruptcy in your state, your student loan will possibly be discharged if it were more than 10 years old. With the new rules coming into effect the student loans will automatically be discharged if they are more than 7 years old. If you are filing bankruptcy personal bankruptcy within 7 years of leaving school, it is possible that your student loan debt will not be discharged if you go bankrupt. Even if your bankruptcy procedures are complete, you will still be responsible for repaying your student loans.
The recent law states that for discharging private student loans in bankruptcy the requirements need to be similar for federal or non-profit student loans. If there are any problems it is necessary that you prove that the borrower will not be able to pay the debt.
Many believe that the proposed changes are not a good idea. The new law puts restrictions on the credit market for novice borrowers. This means that the constrictions placed on the credit market due to the recent change in the law means that only borrowers who have good credit can get private student loans. If you are still pursuing your college degree you may not have the time or ways to build up your credit history. Private loans in these times will be a necessity.
Many have opposed the recent changes that have occurred in the bankruptcy laws. Consenting on the discharge of private student loans in bankruptcy has also been brought under consideration. Those who are in favor of the new laws state that the manner of government’s action to private student loans and public loans needs to be discussed. But many still fear that the real issue is regarding the difference between student loans and other private debt.
If you found the previous article informative, you should check out more in our distance education section, or read some of these articles below:
- 4 Tips to Get Your Masters Degree Online
- Starting Online Classes
- How Much Does College Really Matter?
- Facebook, the Open Graph and Game Dynamics – Controlling Your Online Future
- 8 Weird College Majors
- Women Are Moving On Up In Education
- Nursing Education for Enhancing Skills
- Dorm Room Safety Tips
- College Debt Relief
- University of Vermont – Student Review
You can submit your articles by using our contact form at the bottom of the page. We pay an upfront fee based on quality, length and subject matter and all writers also receive residual royalties of 50% of all AdSense revenue that their articles create for the life of the article. Nobody else offers this and we only do it to attract the best writers.