New Attestation Form Update: Bankruptcy and Student Loans

If you have student loan debt and have been following recent news concerning the Biden administration’s policy guidance for the U.S. Department of Justice (DOJ) and the memo issued by the DOJ about discharging student loans in bankruptcy, you probably know already that the process of discharging student loan debt in bankruptcy is supposed to be changed soon. While the “undue hardship” requirements to discharge student loans in bankruptcy will not change, the DOJ plans to streamline parts of the bankruptcy process so that more student loans are likely to be discharged in a personal bankruptcy case. According to a recent article in Forbes, the DOJ has “updated a key application form under [the] new process,” which suggests that bankruptcy filers could soon be able to have their student loan debt discharged in bankruptcy without many of the procedural difficulties that existed previously.

What does this news from Forbes about the application form involve? Our Oak Park bankruptcy attorneys can provide you with more information.

Getting the Facts About Changes to the Bankruptcy Process and the Handling of Student Loan Debt

What is involved in the changes to the bankruptcy process when it comes to student loans? As a recap, the Biden administration, according to Forbes, “unveiled new policy guidance that will fundamentally change how the federal government handles undue hardship bankruptcy cases.” More specifically, as the article explains, the DOJ and the Department of Education (DOE) will “review a borrower’s financial situation based on information provided by the borrower on a federal attestation form,” which will then be reviewed to “determine whether the borrower may meet the undue hardship standard.”

The addition of this federal attestation form is extremely important because it, in effect, changes how the DOJ and DOE obtain the evidence necessary to decide whether a borrower has met the “undue hardship” requirement. Previously, debtors seeking to discharge student loan debt in bankruptcy were required to file an adversary proceeding and to present evidence of undue hardship, but many borrowers may be able to avoid a costly adversary proceeding under the new guidance — which is likely to make it easier for debtors to have their student loan debt discharged, and is also likely to lead more debtors to attempt to have their student loans discharged in bankruptcy.

Important Changes to the Attestation Form

The Forbes article underscores that, recently, the DOJ updated that important attestation form, which is a 15-page form that is now available to debtors. It requires debtors to provide the following information:

  • Student loan balance;
  • Monthly student loan payment;
  • Status of student loans;
  • Monthly income;
  • Monthly expenses;
  • Assets;
  • Current circumstances affecting student loan repayment;
  • Whether borrower has been repaying loans for at least 10 years;
  • Employment circumstances;
  • Health circumstances;
  • Details of previous efforts to repay student loans;
  • Periods of past student loan payment deferment;
  • Periods of past student loan payment forbearance;
  • Contact efforts made with the loan servicer; and
  • Attempts to use income-driven repayment (IDR) options.

Contact an Oak Park Bankruptcy Lawyer

Are you hoping to have your student loan debt discharged in a bankruptcy filing? Our Oak Park bankruptcy lawyers are here to help. Contact the Emerson Law Firm to get started on your case.



See Related Blog Posts:

What Happens When Your Spouse or Ex-Spouse Files for Bankruptcy?

Checklist for a Chapter 7 Bankruptcy

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