Many people in America are struggling with crushing debts. Unfortunately, a lot of that debt is tied up in student loans that cannot easily be discharged in bankruptcy.
That could soon change.
Chapter 10 would be a game-changer for people struggling with student loans
The Consumer Bankruptcy Reform Act of 2020 was introduced by Sen. Elizabeth Warren and Rep. Jerrold Nadler just this month. If approved, it would create a new provision in the bankruptcy code that would make life much easier for people saddled with massive student loan debts.
Called Chapter 10, the newly proposed bankruptcy category would provide “meaningful bankruptcy relief and give Americans a better chance to get back on their feet,” according to Sen. Warren. The move to create a new bankruptcy chapter is, no doubt, prompted by new figures that show 45 million borrowers carrying the weight of $1.7 trillion worth of student loans on their shoulders.
The new proposal would also provide additional relief to debtors that could keep many people from losing their homes, cars and other valuables. It would essentially reverse the changes to the bankruptcy code that were passed in 1978 and 2005 — both of which made things a lot rougher on debtors.
When your debts are overwhelming, it’s time to seek relief
There’s nothing shameful about being in debt. In many ways, the economic system that creates those debts is so unfair that people can do everything “right” and still end up with a pile of bills they cannot pay.
Filing for bankruptcy can protect you from creditors and help you have a better future. Talk to an attorney today to learn more about your options.