Justice Department announced plans for a fairer and more streamlined process to discharge education loans in bankruptcy

Last week the Justice Department announced a new process for individuals seeking to discharge their student loans in bankruptcy cases. As part of the undue hardship analysis, courts review the borrower’s past, present and future financial circumstances. The new process will leverage Department of Education data and a new borrower-completed attestation form to assist the government in assessing a borrower’s discharge request. The Justice Department, in consultation with the Department of Education, will review the information provided, apply the factors that courts consider relevant to the undue-hardship inquiry and determine whether to recommend that the bankruptcy judge discharge the borrower’s student loan debt.

It will likely still be very difficult to successfully discharge student loans as part of a bankruptcy case. Even so, efforts like these are promising and indicate that the government may be more compassionate in deciding not to oppose a bankruptcy debtor from discharging student loans in certain situations. If you do not have the ability to pay your student loans, are unlikely to be able to pay in the future, and you have made honest attempts to pay your student loans, you should call our office at 706-226-5425 to discuss the potential for discharging your student loans through bankruptcy.