As any good bankruptcy attorney in Indiana would agree, the road to providing student loan debt help has been more like a roundabout than an avenue.
That’s because student loans are one form of debt that, under current federal law, cannot be discharged through filing personal bankruptcy in Indiana. Instead, over the 25 years I’ve practiced Indiana bankruptcy law, I’ve worked to get debtors’ other non-secured loans discharged, thus freeing up cash that could go towards paying on student loan debt.
Student loans are unsecured loans. With a student loan there is no collateral, so, in an effort to prevent graduates from simply walking away from their student loans, the government made a big change in the law back in 1998, making it extremely difficult to have a student loan discharged in bankruptcy.
Apparently there’s someone else who thinks a more direct fix might be a better idea. In fact, House Representative Hansen Clarke feels so strongly about student loan debt, he stated it’s “made a mockery of the American dream.” Clarke has proposed that student loan debt should be discharged in bankruptcy.
As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I liked Clarke’s answer when a reporter asked “Won’t there be an upsurge in bankruptcy if people could discharge their student loans?”
Clarke’s response: Forgiving student loans is a way to create jobs in our economy. (This is exactly what we in the Zuckerberg bankruptcy law offices have been saying!) College grads, explained Clarke, can’t buy and furnish homes or start businesses, because they’re so burdened by student loan debt. “It’s helping people who are working right now keep their money so they can spend it,” he added.
One of my Columbus bankruptcy lawyer colleagues echoed the sentiment: “Wouldn’t it be a good solution if bankruptcy Chapter 7 in Indiana could include student loan debt help?” she asks.
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg