Survey Looks at Student Loan “Debt Bomb” and Bankruptcy
Over the past ten years, Arizona bankruptcy lawyers have experienced a strong increase in the connection between clients’ mortgage-related problems and their interest in bankruptcy. As Chapter 7 or Chapter 13 bankruptcy applicants, debtors can immediately stop foreclosure and creditor harassment, while regaining their financial footing.
A recent survey indicates that debt relief attorneys nationwide are now noticing a major increase in the number of potential clients who are troubled by student loan debt. A report published by the National Association of Consumer Bankruptcy Attorneys (NACBA) found that 80 percent of the 860 lawyers surveyed say that student loan issues have increased “significantly” or “somewhat” over the past four years.
The authors of "Student Loan ‘Debt Bomb’: America’s Next Mortgage-Style Economic Crisis," provide a variety of relevant factors to help explain this growing problem:
- The average college graduate in 2010 had accumulated over $25,000 in debt
- School debt burdens have recently increased by almost 50 percent among students who are in their 30s and 40s
- 95 percent of bankruptcy lawyers say that few educational borrowers have a chance of meeting the "undue hardship" standard for obtaining a discharge of college debt
- Two-thirds of bankruptcy attorneys report that collection efforts by student loan providers have become more aggressive in the past 18 months
While student debt is generally not subject to a bankruptcy discharge, seeking legal advice about student loans from a debt relief lawyer is still a sound idea. The Chapter 13 bankruptcy process can spell relief that allows a borrower to get caught up on their student loan payments while gaining significant relief from other obligations.
Schedule a free consultation to discuss your situation at one of our law offices in Phoenix, Scottsdale, Tempe, Avondale or Prescott. Call 480-845-0145 today.