House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) and Rep. David N. Cicilline (D-R.I.), Chair of the Subcommittee on Antitrust, Commercial, and Administrative Law, have introduced a bill that would give Americans overwhelmed by student loan debt the option of obtaining meaningful bankruptcy relief.
According to a press release, the “Student Borrower Bankruptcy Relief Act of 2022” proposes to eliminate the section of the Bankruptcy Code that makes private and federal student loans nondischargeable, allowing these loans to be treated like nearly all other forms of consumer debt.
“This legislation updates the federal bankruptcy code to ensure student loan debt is treated like almost every other form of consumer debt that can be discharged during bankruptcy,” said Chairman Nadler. Prospects for consideration in the House are favorable, but overall passage would be challenging given the narrow Democratic majority in the Senate and short amount of time left in the congressional session.
In addition, a second bill has been introduced by Chairman Nadler and Senator Elizabeth Warren to create a new section of the Bankruptcy Code – Chapter 10 – to deal with the repayment of student loans under Court supervision. Additional details regarding this proposal shall be made public in the days ahead.
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