Amended in Assembly April 15, 2013

California Legislature—2013–14 Regular Session

Assembly Joint Resolution No. 11

Introduced by Assembly Member Wieckowski

February 6, 2013

Assembly Joint Resolution No. 11—Relative to the dischargeability of private student loan debt.

LEGISLATIVE COUNSEL’S DIGEST

AJR 11, as amended, Wieckowski. Bankruptcy.

This measure would urge the President and Congress of the United States to support and pass legislation that would ease the dischargeability of private student loan debt in a bankruptcy case filed under Chapter 7 or Chapter 13 of the Bankruptcy Code.

Fiscal committee: no.

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WHEREAS, This resolution shall be known as the Financial
Fresh Start Resolution of 2013; and

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WHEREAS, Existing federal law excepts from discharge in a
bankruptcy case filed under Chapter 7 or Chapter 13 of the
Bankruptcy Code specified educational loans made, or secured,
by a lender other than the federal government, also known as
private student loans, unless the debtor convinces a bankruptcy
court that repayment would be an undue hardship on the debtor
and the debtor’s dependents, a sometimes difficult and expensive
process not required to discharge other unsecured nonpriority debt;
and

WHEREAS, Californians should have the same ability to
discharge their private student loan debt as they do to discharge
their unsecured nonpriority debt; and

WHEREAS, Californians who are not given relief from their
burden of private student loan debt, even after a successful
completion of a bankruptcy case, are seriously hindered from
establishing their personal economic stability and contributing to
the economic growth of the state; and

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WHEREAS, United States Senator Dick Durban and
Representative Steve Cohen have recently introduced the following
legislation in their respective congressional houses that would
permit private student loan debt to be discharged in bankruptcy
and are substantially similar to legislation they each introduced
in 2010 and 2011:

(a) The Fairness for Struggling Students Act of 2013, supported
by eight cosponsors at the time of this resolution.

(b) The Private Student Loan Bankruptcy Fairness Act of 2013,
supported by 24 cosponsors at the time of this resolution; and

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WHEREAS, The inability of Californians to more easily
discharge private student loan debt prevents them from gaining
the “fresh start” that a successful bankruptcy case is intended to
provide; now, therefore, be it

Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature urges the President and
the Congress of the United States to support and pass legislation
that would allow private student loan debt to be dischargeable in
a bankruptcy case filed under Chapter 7 or Chapter 13 of the
Bankruptcy Code similar to the dischargeability of unsecured
nonpriority debt; and be it further

Resolved, That the Chief Clerk of the Assembly transmit copies
of this resolution to the President and Vice President of the United
States, the Speaker of the House of Representatives, the Minority
Leader of the House of Representatives, the Majority Leader of
the United States Senate, the Minority Leader of the United States
Senate, and to each Senator and Representative from California
in the Congress of the United States.