Student loan debt is a major financial burden for many graduates throughout Tennessee and the rest of the country. This debt often prevents individuals and families from buying cars and even taking out loans for homes. In order to make things easier for borrowers, many advocates are proposing drastic changes to bankruptcy laws. Currently, discharging bankruptcy debt is a difficult process that involves specific proof of hardship.

The American Bankruptcy Institute’s Commission on Consumer Bankruptcy is one of the leading forces behind proposed changes to bankruptcy law. They released a 274-page report that detailed a variety of problems with current standards, including attorney costs and the disproportionate number of African-American consumers affected by debt. Bankruptcy filings reached a record low in 2018 partly due to lack of access and strict eligibility standards for student loan debt.

Filing for bankruptcy became much more difficult in 2005 after the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. Despite the law’s name, changes to the code prevented a lot of individuals and families in financial distress from filing. Proposed changes would make it easier to file for Chapter 7 and easier to discharge student loan debt seven years after the loan becomes payable.

Borrowers who are seeking debt relief from student loans and other accounts might be able to find legal remedies with help from an attorney. The first step is to determine eligibility and which type of bankruptcy fits the borrower’s situation. Next, the lawyer will help their client file a bankruptcy petition in court. In the case of student loans, legal counsel may need to provide evidence that establishes the client meets the standards of the Brunner Test, which determines student loan discharge eligibility.