I just found this website and did a search but could not find anything about this.... I thought I would post to make more people aware.
Senator Durbin introduced a bill (S.1561) on June 7 that would allow private student loans to be discharged in bankruptcy.
Currently the bill has no co-sponsors and needs support! Calling our senator's offices really does make a difference and will bring more attention to the bill.
I apologize if links aren't allowed but I checked the FAQ and didn't see anything regarding them.
To find the phone number for your senators:
Ask to speak to an aide or staffer working on the bill – S.1561
When I called I explained the bill to the first person, and he transferred me to the education aide. The first person did not seem to know anything about this bill, which means no one is calling for support!!
Your phone calls actually make a difference. Please call and urge your senators to support S.1561 allowing private loans to be discharged in bankruptcy.
Private student loans are not regulated and do not have the same benefits as federal loans, so they should not be considered the same in bankruptcy. In 2005 the law was changed to include private loans and no one is sure how/why this happened. (Federal loans are backed by taxpayer dollars, but private loans are not regulated at all. It makes sense why federal loans cannot be discharged, but it doesn't make sense why private loans are held to the same standard). Interest rates on some of the loans go up to 20% and are worse than some credit cards. They should not be considered the same as federal loans in regard to how they are treated in bankruptcy. They should be treated as any other unsecure debt.
They may ask for name and address or nothing at all. When I called they didn't ask for any information... they just said thanks for calling and they would pass along the info.
Progress of the bill:
Text of the bill:
**Edited to add clarification regarding what would be discharged:
Previously, only government issued or guaranteed student loans were protected during bankruptcy – meaning that only federal or state loans were not dischargeable. This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. In 2005, a provision was added that extended the same bankruptcy protections to private lenders participating in the student loan industry. The Durbin bill restores the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy, placing student loan companies in the same position as virtually all other private creditors. The bill also clarifies that existing protections are specific to loans that were issued by or are guaranteed by state or federal governments.
I feel bad this is my first post but I feel like I will be spending a lot of time here learning about everything. I don't know a lot and just started to research my options when I found this bill. Please consider calling! It will only take 2 minutes!
Senator Durbin introduced a bill (S.1561) on June 7 that would allow private student loans to be discharged in bankruptcy.
Currently the bill has no co-sponsors and needs support! Calling our senator's offices really does make a difference and will bring more attention to the bill.
I apologize if links aren't allowed but I checked the FAQ and didn't see anything regarding them.
To find the phone number for your senators:
Ask to speak to an aide or staffer working on the bill – S.1561
When I called I explained the bill to the first person, and he transferred me to the education aide. The first person did not seem to know anything about this bill, which means no one is calling for support!!
Your phone calls actually make a difference. Please call and urge your senators to support S.1561 allowing private loans to be discharged in bankruptcy.
Private student loans are not regulated and do not have the same benefits as federal loans, so they should not be considered the same in bankruptcy. In 2005 the law was changed to include private loans and no one is sure how/why this happened. (Federal loans are backed by taxpayer dollars, but private loans are not regulated at all. It makes sense why federal loans cannot be discharged, but it doesn't make sense why private loans are held to the same standard). Interest rates on some of the loans go up to 20% and are worse than some credit cards. They should not be considered the same as federal loans in regard to how they are treated in bankruptcy. They should be treated as any other unsecure debt.
They may ask for name and address or nothing at all. When I called they didn't ask for any information... they just said thanks for calling and they would pass along the info.
Progress of the bill:
Text of the bill:
**Edited to add clarification regarding what would be discharged:
Previously, only government issued or guaranteed student loans were protected during bankruptcy – meaning that only federal or state loans were not dischargeable. This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. In 2005, a provision was added that extended the same bankruptcy protections to private lenders participating in the student loan industry. The Durbin bill restores the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy, placing student loan companies in the same position as virtually all other private creditors. The bill also clarifies that existing protections are specific to loans that were issued by or are guaranteed by state or federal governments.
I feel bad this is my first post but I feel like I will be spending a lot of time here learning about everything. I don't know a lot and just started to research my options when I found this bill. Please consider calling! It will only take 2 minutes!
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