I just wrapped up an interview for badcredit.org for a story that they will run sometime in Nov or early December about the new rules allowing someone to discharge student loans in bankruptcy. I’ll post links here when that story is ready.
Bottom line is that there is a growing awareness that private student loans can often be discharged in a bankruptcy as a non-education loan. You’d be surprised at the results that we see! Often a full discharge, or getting the balances dropped by 50-70% and interest reduced from 10-15% to 1-2%. Very small payments spread over 20 or even more years. And the kicker is that any discharge in bankruptcy is tax free forgiveness. Who wouldn’t want to kick their private student loan to the curb…
But what about federal student loans? In the past, we simply did not file these cases – it was nearly impossible to win a discharge of federal student loans. I used to work for the other side running around the State of Florida trying these cases. I think I lost one down in Miami. One. All the rest resulted in a win for the creditor (my client at that time before I moved to the consumer side of things). But now since the new DOJ process is available, it is finally possible, if not probable. Here’s the new results – see for yourself:
As of September 2023 DOJ numbers – for nationwide federal student loan adversary cases
648 attestations filed
120 cases resolved
84 full/partial discharge
36 dismissed after Ed recommendation (these were the total losses)
70% discharge rate
A 70% discharge rate is very very good. That means that everyone who filed a bankruptcy, who also filed a student loan adversary and attestation to discharge federal student loans – 70% were successful!
As you can see, many are still pending b/c this is new and any filed this summer would not have been resolved yet.
If you’d like to know whether your loans – whether private or federal – can qualify for a discharge in bankruptcy, please reach out to us. Remember, we are Florida attorneys based in Tampa – so we can only file a bankruptcy here in our surrounding counties. That includes Hardee, Hernando, Hillsborough, Manatee, Pasco, Pinellas, Polk and Sarasota.
If you are having trouble meeting your monthly bills, and now with student loans restarting, it can be a good time to clear the deck of all debt, including student loans, and really start fresh.