Student Loan Debt and Consumer Bankruptcy: How a New Startup Plans to Help

If you are struggling with student loan debt and have been wondering if you could be eligible to have that debt discharged in a consumer bankruptcy proceeding, you are not alone. Debtors across Oak Park and throughout the Chicago area have substantial student loan debt that makes it difficult to or even impossible to live a comfortable life. For many people with student loan debt, even federal loans can be difficult to repay, and forgiveness programs are difficult to understand and to navigate. While you may be considering personal bankruptcy, you also may know that it has traditionally been quite difficult to have student loan debt discharged in a bankruptcy case. Debtors need to pass a test that shows they have made a good faith attempt to repay their student loans, and that continuing to have the student loan debt would create a great hardship.

Recognizing the difficulty of discharging student loan debt in bankruptcy—and the need to make this process easier—consumer advocates and some lawmakers have pushed for a change in U.S. bankruptcy law. In addition, according to a recent report from Yahoo! Money, a new startup is also taking aim at the complicated process of discharging student loans in a consumer bankruptcy case.

Connecting Student Loan Borrowers with Bankruptcy Lawyers
Certain lawyers have more experience handling consumer bankruptcy cases involving student loans than others. At the Emerson Law Firm, we have years of experience serving debtors in the Oak Park area and assisting with Chapter 7 and Chapter 13 bankruptcy cases, including those involving student loan debt. While we know that it is possible to discharge student loans in bankruptcy, not all lawyers have the same experience to know that a discharge is possible.

The new startup is designed to help student loan borrowers get in touch with bankruptcy lawyers who can help them with their case. According to the founder of the startup, Rob Hunter, there is “a need for such a service on both ends.” As Hunter clarified, many consumers with student loan debt need help determining whether there is an experienced bankruptcy lawyer in their area who can assist with a Chapter 7 or Chapter 13 bankruptcy case involving student loan debt. At the same time, Hunter believes the startup will also be able to assist consumer bankruptcy attorneys. As the Hunter explained, the field of consumer bankruptcy “is not the most technologically-minded industry that’s out there.” Indeed, Hunter clarified, “using technology [in the startup], we are able to take work off the plate of the lawyer that otherwise would stand in the way from . . . just practicing law and giving legal advice and serving their clients.”

How to Discharge Student Loan Debt in Bankruptcy
As the report underscores, bankruptcy judges have begun to shift away from a position that leans toward denying the discharge of student loans in bankruptcy to agreeing that debtors have met the necessary requirements for a discharge.

While debtors may still need to show that they have made attempts to repay their student loans and that continuing to do so would produce a hardship, debtors may have a better chance of receiving a discharge. Many debtors do not seek a discharge for student loan debt because they assume it will be too difficult, but often, all a debtor needs to do is to move forward with a bankruptcy petition.

Contact an Oak Park Bankruptcy Lawyer
Do you need assistance with your bankruptcy case? An experienced and compassionate Oak Park bankruptcy attorney can speak with you today. Contact the Emerson Law Firm for more information.


See Related Blog Posts:

Reconsidering Medical Bankruptcy and Bernie Sanders’ Plan

Seventh Circuit Case Allows Consumer to Bring Second FDCPA Lawsuit

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