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:
- 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.”
- 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.
- 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.”
- 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.
- 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 Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-880-5554 to set up your free consultation.