Countless Tennesseans struggle with student debt; some even carry this burden for decades. A financial stressor that can cripple the wallet and affect one’s overall quality of life, student loan debt is a topic that has plagued America over recent years. Fortunately, there could be a light at the end of the tunnel.
In February, CNBC noted that President Trump could make it easier to address student loan debt through bankruptcy. The report revealed the Education Department’s plans to review the process of discharging student loans — a step that CNBC called a definite move forward. The review would include a consideration of the ways undue hardship claims affect borrowers; ultimately, they mentioned possibly modifying how those claims would be moderated through bankruptcy. Some argue that “undue hardship” was never properly defined, making it difficult to navigate student loan debt cases. CNBC shares that college-loan balances in the country have skyrocketed to $1.4 trillion — higher than ever before.
NerdWallet immediately criticizes the myth that student loans are impossible to discharge in an article on filing bankruptcy for student loans. The financial resource goes on to state that, although it can be challenging depending on the situation, such routes are possible. NerdWallet mentions the same issue as CNBC: undue hardship. Debtors must prove this hardship in order to find relief through bankruptcy, and sometimes this might also require an adversary proceeding. Debtors must usually prove the following three factors of the Brunner test:
- Making loan payments would prevent one from maintaining a standard of living
- Existing circumstances show that financial struggle will likely persist
- Good faith efforts to pay the debt have been made
Once debtors have begun the bankruptcy process, they may make plans for loan discharge. There may be many details to this process, and Tennesseans going through this struggle may look to local resources for additional assistance.