Wootton & Wootton, P.C.

Bankruptcy Help For Everyday People

Call Today For a Free Consultation
919-794-8660

Bankruptcy & Estate Planning Help For Everyday People

Disabled vets get streamlined discharges of federal student loans

Student loans are rarely ever discharged in bankruptcy proceedings. Yet, they can still make up a significant portion of the average debtor's mountain of unpaid bills.

Recently, media outlets reported that the President signed an executive order that streamlines the discharges of disabled veterans' federal student loans if the vets are unable to work and repay their loans.

Mischaracterized order?

Despite the reports from some national media outlets and members of the Administration, this is not a new student loan forgiveness program. Under the Total Permanent Disability (TPD) discharge program, qualified veterans with permanent and total disabilities from service-related conditions have been eligible to wipe out their federal student loan debts without penalties.

So what did the President's order actually do? It directed the federal Departments of Education (DoE) and Veteran's Affairs (VA) to work in concert and streamline the TPD discharge process for the veterans who qualify.

To be sure, this is an important step, as many eligible disabled veterans remain unaware of the TPD loan discharge's existence. The application to apply for the program has been labled both cumbersome and confusing.

Under the new order, the DoE must automatically identify the disabled veterans eligible who qualify for loan forgiveness. They will be able to opt out of the program for 60 days before the debts will be discharged automatically.

Could this keep you out of bankruptcy?

If you are a disabled veteran whose condition is service-related and you are struggling to make your student loan payments, this program could be quite helpful. Whether it will keep you out of the North Carolina bankruptcy courts is another matter entirely, however.

Most struggling debtors have more unpaid bills than just defaulted student loans. Unpaid medical debts and credit card bills typically are also part of the total debt load for those who file for Chapter 7 bankruptcy. For those debtors who have amassed a lot of debt unrelated to student loans, this program may not be sufficient to resolve all of the fiscal problems.

There is other help out there

To be clear, nobody wants to have to file for bankruptcy. But this legal process can alleviate many financial stressors in debtors' lives. If you find yourself mired in unpaid debts, it just might be time to speak to an attorney about your options for filing for bankruptcy.

No Comments

Leave a comment
Comment Information

Start Planning For The Future Today

Want to get out of debt? Create a will? We can help.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Durham Office
3200 Croasdaile Drive
Suite 504
Durham, NC 27705

Toll Free: 800-610-3643
Phone: 919-794-8660
Fax: 919-382-2042
Durham Law Office Map

Henderson Office
1775 Graham Avenue
Suite 104
Henderson, NC 27536

Toll Free: 800-610-3643
Phone: 919-794-8660
Fax: 919-382-2042
Map & Directions