Proposal in Congress may allow student loan forgiveness in bankruptcy

Proposal in Congress may allow student loan forgiveness in bankruptcy

TOLEDO, OH (WTOL) - Millions of Americans are buried in student loan debt and are finding it difficult to continue those payments.

Toledo attorney Scott Ciolek says student loan debt is the number one cause of bankruptcy in the US. He says many of his clients are drowning in debt.

"Because their student loan obligation is so high," Ciolek said, "it leaves them with bad credit."

Many Americans suffering from student loan debt know their loans cannot be forgiven if they file for bankruptcy. But a new proposal in Congress could change that.

"There are going to be few people, where this will be there only out. But it will also open the door for other types of opportunities for workouts," Ciolek said.

The proposal is still in the early stages, but Ciolek says people buried in debt should contact their local representatives and senators.

For recent graduates with loan payments looming, experts say the time to take financial control of their lives is immediately.

"Start by creating a cash flow, not a budget, but a process that tracks what's coming in and going out," said CBS Business Analyst, Jill Schlesinger. "To accelerate your pay off time, write down each loan, its interest rate, the payment amount and note whether or not it is a federal or private one."

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