Skip to main content
(678) 915-2634 Contact Us
Private Student Loans May Soon Be Dischargeable in Bankruptcy Atlanta, GA

Personal Attention & Experience Since 1971 Family-Owned, Family Focused

Client Reviews

Private Student Loans May Soon Be Dischargeable in Bankruptcy

lawyer in a lawyers library

A bill making its way through the U.S. House of Representatives would allow private student loans to be discharged in bankruptcy, reversing an earlier law that made student debt essentially non-dischargeable.

When President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act into law in 2005, the goal was to reform bankruptcy and to make it more difficult to take advantage of bankruptcy protection. However, the bill had a harsh effect on those with student debt: under the law, private student loans are exempt from discharge in bankruptcy in the vast majority of cases.

The 2005 law reclassified private student loans as “education loans”, placing them in the same category as government-backed federal college loans, which are not eligible for discharge in bankruptcy. Therefore, in order to have private student debt erased, borrowers must show that repaying the loans would result in “undue hardship”, an almost impossible standard to meet.

Many have criticized the undue hardship threshold – which does not apply to credit card debt, car loans, or home mortgages – as an unfair burden on borrowers. “People who borrowed for college and played by the rules deserve basic consumer protections and fair treatment when they hit hard time,” said Lauren Asher of the Institute for College Access and Success.

However, this may soon change. The Private Student Loan Bankruptcy Fairness Act, which was introduced into the House of Representatives in April, would reverse the provision of the 2005 law that classified private student loans as non-dischargeable debt. The bill was recently passed by a House subcommittee, and the legislature is expected to take further action before the session ends in four weeks.

According to Asher, the new law simply balances the field, treating private student loans like other, similar debt. “Under the legislation,” Asher said,” private student loans would once again be treated like other consumer debt in bankruptcy, rather than like unpaid criminal fines.”

Source: NextStudent, “Bankruptcy Protection Bill for Private Student Loans Advances in Congress”, Shannon Rasberry, 7 October 2010

Posted on behalf of Jamie L. Gingold, PC

195 14th Street NE #1604
Atlanta, GA 30309

Phone: (678) 915-2634

Email:

First Free
Appointment




    Disclaimer Privacy Policy

    I have read the Disclaimer and Privacy Policy

    Our Client Reviews

    Jamie L. Gingold, PC
    5.0 / 5.0

    Based on 28 reviews

    Jack L.

    They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

    Karen B.

    Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

    Lyla B.

    I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

    Julie T.

    Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

    Julie T.

    I contacted getting old and getting old regarding some old tax debt and credit card debt that I needed to address and had been putting off. miss Irving in the office was very very nice and put me at ease. I met with Jaime Gingold. She was very nice and explained the procedure to me and what would be left owing to the Internal Revenue Service and the State of Georgia after my case was done. My case has now been completed and I am on my way to a new start. Thank you Gingold and Gingold for all of your help.

    Anna T.

    Amazing! Outstanding!! They went over and beyond..I would recommend them to anyone needing a lawyer!!

    Write a review