Many Mississippi residents are struggling under piles of insurmountable debt. The sources of these debts may include everything from credit cards and auto loans to medical bills and student loans. While many of these debts can be discharged through personal bankruptcy, people struggling with significant student loan debt have faced particular difficulties. In the past, the bankruptcy code was amended on multiple occasions to make it harder for borrowers to find relief from their student loans. At the same time, the cost of university has gone up dramatically, leaving Americans with $1.5 trillion in student loan payments.

A new report by prominent bankruptcy judges, lawyers and academics is urging changes to the law to make it easier for people to find relief from crushing student loan obligations. The report aims to address issues that are preventing people in debt from filing for bankruptcy. There are two main types of personal bankruptcy options: Chapter 7, where assets are sold off and a person’s debts discharged, and Chapter 13, which aims to restructure debts through a payment plan. Bankruptcy filings hit their lowest point since 2007 in 2018. However, many note that people are still struggling with insurmountable debt but do not file for bankruptcy due to other concerns.

The commission offered a range of proposals, including allowing student loans to be discharged in bankruptcy seven years after they became payable. While student loans can currently be discharged in cases of “undue hardship,” this has been a difficult barrier to reach. Some say that judges could interpret the law differently to help people find relief.

Of course, many people are struggling with credit card bills and medical debt, both of which can be discharged normally through personal bankruptcy. An individual who is struggling with excessive debt could consult with a bankruptcy attorney about their options to seek relief.

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