Florida Bankruptcy Court Offers a New Student Loan Repayment Program
There’s no denying that student loan debt in the United States is a major problem. Many Americans are searching for relief and a solution to their overwhelming debt. An estimated 44 million Americans are owed $1.5 trillion by student loans. Due to legislation from the Clinton era, bankruptcy does not always offer relief for student loan debtors. A new Florida student loan plan is addressing this issue and giving debtors more options to get relief from student loan debt in bankruptcy. This article will provide more information on the new Florida student loan repayment program and what student loan debtors should know about bankruptcy.
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How Are Student Loans Treated Under Current Bankruptcy Law?
Before the 1998 changes to the law, student loan borrowers were able to discharge their student loans even if they did not meet the test of undue hardship. Student loan debt is more complicated today and requires a thorough understanding of the Brunner Test.
Since Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005, federal and private student loans are much harder to discharge than other types of debt. The Brunner Test allows for a discharge if borrowers can show that the loan is causing undue hardship. This legal precedent, which is based on an 1987 federal court ruling, is often used as a benchmark to determine bankruptcy and student loan eligibility. You must prove three things to pass the Brunner test.
- Your current income and expenditures do not allow you to maintain a minimum standard of living for your family.
- It is unlikely that your financial situation will change during the term of your loan.
- You have made good faith attempts to repay the loan.
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How Does the New Student Loan Repayment Program Work?
You can imagine that many student loan borrowers are not able to pass the Brunner Test to be able to discharge their student loans (especially in chapter 13 bankruptcy cases). The new Student Loan Management (SLM), designed to offer bankruptcy debtors more repayment options, does not override the precedent that would have facilitated easier discharges.
SLM is available to all debtors who have a student loan that meets the requirements and are currently pending in the United States Bankruptcy Court Middle District of Florida. In this program, both debtors of student loans and their creditors can communicate through a portal. Both parties are encouraged to explore options for student loan repayment and modify agreements or payments as necessary.
The debtor must file a notice with the court within 14 days after the date the creditor has concluded the SLM process. This will include the agreed-upon repayment amount. If the parties cannot agree on a student loan repayment plan, they must file a notice with the court.
IDR plans are available under the new SLM Program in Chapter 13 bankruptcy cases. Debtors can file a modified Chapter 13 Plan that includes the IDR payment.
Our Jacksonville Student Loan Debt can Help
It’s not easy to feel overwhelmed by overwhelming student loan debt. Florida’s SLM program, which offers repayment tailored to your situation, can be helpful if you have student loan debt and you are considering bankruptcy. It’s vital to know your options if you want debt relief. Don’t give up. We are a bankruptcy law firm that specializes in helping clients throughout Northeast Florida get back on track to financial stability. Our compassionate approach will help you decide if bankruptcy is right for you. Call our offices to set up a consultation, and find out more about the options you have for repaying your student loans!
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Remember!
Bruner Wright is your trusted partner in navigating the complexities of the New Student Loan Repayment Program. Our team of experts specializes in providing personalized assistance and guidance to help you understand your options and maximize your benefits. Whether you’re a recent graduate or a seasoned professional, we’re here to help you take advantage of this innovative program and achieve financial freedom. With Bruner Wright by your side, you can confidently navigate the new student loan repayment landscape and pave the way towards a brighter financial future.
Our experienced team of bankruptcy attorneys is here to provide expert guidance and support throughout the process. Take the first step toward financial freedom today.
Contact Bruner Wright now for a free consultation and take control of your financial future.
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