INDIANAPOLIS (WISH) — The U.S. Department of Justice recently released new guidelines to make it easier for some people with student loan debt to file for bankruptcy.
The change in the rules applies to people with only federal student loans.
Mark Zuckerberg, a bankruptcy attorney in Indianapolis, told News 8, “Before last week, if you wanted to make your student loans go away, you would have to file a lawsuit suing the student loan company saying, ‘Please let me get rid of my student loans.’ Most people couldn’t afford that cost even if you were doing it pro se, by yourself.”
To be eligible, people need to declare their incomes, debts and monthly expenses on an attestation form provided by the government.
“They will kind of tell you, ‘Yes we think you qualify’ (or) ‘No, we don’t think you qualify.’ That way somebody doesn’t have to pay a pile of money with a lawyer if in the end will they get rid of them or not,” Zuckerberg said.
The Department of Justice will determine eligibility based on three criteria: The borrower’s present and future ability to pay, and whether the borrower has made a good faith effort to pay off his or her student loans. There is no age limit for people who can apply.
“This is really built for the people who owe way more than the $10,000. These are the people who went to school and owe hundreds of thousands of dollars and they are going to take this debt to their grave,” Zuckerberg said.
Even if all of a person’s debt isn’t forgiven, the government may free him or her from some of it after it determine eligibility.