Easier is not the same as easy!
In the past, discharging federal student loans in bankruptcy has been very difficult. The Department of Justice fought discharges tooth and nail. Discharging student loans through bankruptcy was unrealistic because it was expensive and exhausting for borrowers (and their attorneys). The Department of Justice has released a new process to streamline student loan discharge through bankruptcy. The borrower still has to prove undue hardship.
Factors that will be considered:
- Can the borrower currently afford to pay the student loan?
- Will the borrower be able to pay the student loan in the future?
- Has the borrower made good faith efforts to pay the student loan in the past?
This streamlined process should make bankruptcy more effective in helping older or disabled borrowers obtain relief from debt they will never be able to repay.