While certain student loan borrowers can use the bankruptcy process to have their loans discharged, the process has been very cumbersome — but this might change thanks to new guidelines.
Do You Have a Money Question? Ask an Expert
The Future of Finances: Gen Z & How They Relate to Money
In January, the Justice Department updated the attestation form that borrowers must complete to seek bankruptcy discharge of their federal student loans, Forbes reported. These changes include “tweaks to the reporting of monthly household income, clarifying instructions regarding when a borrower needs to provide additional information, new questions seeking details on whether a school closure impacted a borrower’s ability to repay their student loans, and more detailed information on a borrower’s student loan repayment, deferment, forbearance, and consolidation history.”
In addition, the updates stated that if the borrower is disabled, the disability does not have to be “permanent,” only “chronic” to potentially be a basis for a bankruptcy discharge.
This comes on the heels of the Department of Justice (DOJ), in conjunction with the Department of Education, issuing new guidance to simplify the process and establish standards for borrowers who seek