Student loan debt has been dischargeable in bankruptcy court since the 1980’s. It isn’t an easy decision to file for bankruptcy. Bankruptcy is not, and should not, be the entire safety net for those in financial crisis. However, it is the most organized, recognized, and effective system available that offers relief to those who need it the most.
The Law Offices of Michelle Labayen, LLC has successfully won cases against public and private lenders. Michelle has helped her clients to get into a more suitable repayment plan by changing the interest rate, changing the plan, receiving a partial discharge, and, in some cases, a full discharge of student loan debt.
Most lawsuits, if they reach a settlement, are protected by a non-disclosure agreement (NDA). As a result, they can’t become public knowledge. Ultimately, there could be countless other lawsuits including any of these predatory lending agencies.
Moreover, there’s no good reason to allow private student loans to be treated differently than other types of unsecured credit. In fact, exempting these loans from discharge is likely to cause even more harm for borrowers. This is because there are no meaningful borrowing limits, or caps on interest rates and fees charged for private student loans.
Some of the lenders that are facing, or have faced, lawsuits for predatory practices include:
The Department of Education has been accused of misleading borrowers regarding the repayment option known as the Public Service Loan Forgiveness Program by four Democratic Senators, pictured below: Tim Kaine (D-VA), Sheldon Whitehouse (D-RI), Tammy Duckworth (D-IL), and Maggie Hassan (D-NH). The DOE allegedly turned away borrowers who qualified for the program, so they were unable to have their loans forgiven.
Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.
You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, Miami, FL, and Newark, NJ.