On February 7, the National Association of Consumer Bankruptcy Attorneys (NACBA) published a report titled, “The Student Loan ‘Debt Bomb’: America’s Next Mortgage-Style Crisis?” [http://www.nacba.org/Legislative/StudentLoanDebt.aspx]. It discusses the NACBA’s survey of 860 of its members regarding the growing student debt crisis and its proposed solutions. Because student loan debt cannot be discharged in a Las Vegas bankruptcy, it’s important to discuss the NACBA’s findings. Here are some of the most salient ones:
1. Over the last 3-4 years, 47.5 percent of respondents saw a “significant increase” in the number of potential clients who had student loan debt. 33.3 percent described the increase as “somewhat.” Most of the rest thought it “stayed the same.”
2. Of those who saw an increase in potential clients with student loan debt, 39.9 percent saw a 26 to 50 percent increase in potential clients, while 22.8 percent saw an increase of between 51 and more than 100 percent.
3. When asked how many of their clients had a “good chance” of discharging their loans under the undue hardship exception, 73.8 percent reported “none or nearly none” and 20.2 percent reported “few of them.”
4. 82.3 percent of the bankruptcy lawyers believed the undue hardship exception was a “big problem” to helping their clients obtain a fresh start in bankruptcy.
5. As to the distribution of student debt among potential clients, 75.4 percent reported that up to a quarter of their potential clients had over $100,000 in student loan debt, and half the attorneys reported that 26 to 50 percent of their potential clients had between $26,000 and $50,000 in student loan debt.
NACBA’s report advocates for returning bankruptcy protection to student debtors, re-imposing reasonable statutes of limitations on collections, and improving oversight of student loan debt collection practices.
Student debt is a serious and growing problem for the United States, but filing bankruptcy can help in some circumstances which means it’s still worthwhile to consult with a Las Vegas bankruptcy attorney. A student debtor can discharge other debts in a Chapter 7 filing, which leaves money left over for other expenses.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-903-1459 to set up your free consultation.