nytimes.com
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A new study suggests that distressed borrowers using a simpler bankruptcy process are succeeding — and that more people like them should try.

The process which enables this was introduced during the Biden administration.

  • atzanteol@sh.itjust.worksEnglish
    2·
    1 day ago

    However, this article says in extreme cases,such as being very old (50 + ) and having a debt of 100k, that sometimes a court will allow it.

    That’s not what the article says… It says that having payments greater or equal to your income and a long history of high payments may satisfy the “hardship” requirements.

    • daannii@lemmy.worldEnglish
      2·
      1 day ago

      . I quoted at the wrong age for that specific example. That one was 65.

      I put “50+” because the other example was for a 47 year old.

      • atzanteol@sh.itjust.worksEnglish
        2·
        1 day ago

        The point is that it isn’t their age and the amount in absolute numbers. It’s the amount as a percentage of income and how long they have been struggling to pay off the loan that matters.

        Under Brunner, debtors must answer three questions before their debt can be dismissed: Can they currently pay the loans and maintain a minimal standard of living? Is their situation likely to persist for a significant portion of the repayment period? And have they made a good-faith effort to repay the loans?

        Under the newer approach, each piece of the test becomes easier to pass if the debtor can check certain boxes. For example, if a debtor’s allowed expenses equal or exceed his or her income, that may satisfy the first question. Being over 65, or having loans in repayment status for at least 10 years, for example, would fulfill the second question.

        • daannii@lemmy.worldEnglish
          1·
          4 hours ago

          I didn’t summarize the whole article because that wasn’t relevant to my points.

          My points were.

          Fasfa contract says it can’t be reduced with bankruptcy but article gave two examples of when it has been.

          One due to the institution being shut down. The other from owing a high amount and being older.

          Everyone involved was not wealthy. Otherwise they wouldn’t have the debt in the first place. So I didn’t think that was relevant to mention.

          I’m not sure that two examples is enough to convince me that this is possible for more people to get this exception made for their student loan debt.

          But maybe with the loss of the loan forgiveness program, people can make a stronger case for it.