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Wow. So any irresponsible person can borrow for law or medical school, run up a debt of $200,000, graduate, declare bankruptcy the next day, and then get a job for $150,000?
From what I read previously, it is the ones that could afford to pay it back that don't pay it back. They should garnish their wages like they do for other debts. My husband, my self and our son all paid our loans back on time, and we weren't making that much money, but wanted the debt gone. Maybe we should get a refund as the money would be really nice for retirement.
Quote:
Originally Posted by Rachel976
There's such a thing as income-based repayment, and forbearance for periods of undue hardship. Why should this couple be allowed to foist their loan obligations onto other people to pay off?
Sadly, that is how the system seems to work. What is so sad is those that didn't want to take on the debt go out and go to work at whatever job they can get, and many of them will attend classes on a pay-as-you basis, and to them, this is a real slap in the face.
All too often when they get worthless degrees, which should they have researched, they would have realized there were no jobs that paid enough to make it worthwhile to take out the loans, they whine about not making enough money. Too bad!
All of these deadbeats end up costing those that work and pay their debts money as those institutions get back their money some how.
Status:
"Smartened up and walked away!"
(set 26 days ago)
11,780 posts, read 5,795,007 times
Reputation: 14201
Wow - I want reparations then - the $6000 I borrowed in "79, the $30 thousand I borrowed to pay for each of my kids first years and then I'll want my kids to get back all their monies that they paid - $150,000.
If you enter into a contract - you are responsible. If you don't pay your mortgage - the bank takes your home, if you don't pay your car payment - the car company repossesses it and if I don't pay my utilities - they get shut off.
Isn't pretty much every debt discharged during bankruptcy a debt owed? Why are student loans the only debt that's "unfair" to discharge?
Because other debts - like a car loan or a house note - have actual collateral that can be repossessed. That's why unsecured loan debt is always so high - to make up for the risk. Federal student loans, rates of which are held down by the government, charge lower rates because they CANNOT be discharged.
If federal student loans are dischargeable in bankruptcy, virtually every kid who comes out of college with a zero net worth (or less, when you add in the debt) will just declare bankruptcy. Student loans would become a joke, and even people who could afford to pay for college would borrow so they can take the summer semester in England, go out West skiing, spend spring break in Cancun. Then, upon graduation, they could say, "oops....I'm bankrupt!"
Wow. So any irresponsible person can borrow for law or medical school, run up a debt of $200,000, graduate, declare bankruptcy the next day, and then get a job for $150,000?
No, you cannot declare bankruptcy the next day. You have to spend so many years showing an attempt to repay. You also have to show that it's an undue hardship to repay and that the circumstances are unlikely to change. It's a high standard you have to meet to show all of this and be granted a discharge.
No, you cannot declare bankruptcy the next day. You have to spend so many years showing an attempt to repay. You also have to show that it's an undue hardship to repay and that the circumstances are unlikely to change. It's a high standard you have to meet to show all of this and be granted a discharge.
Her "excuse" was that the loan was so difficult to manage that they wouldn't be able to keep their house AND continue to pay the monthly amount. So IOW, she and husband bought a house they couldn't afford, when you factor in their other financial obligations.
What the judge should have done, rather than just wipe it all out, is work out a repayment schedule that was amenable to Navient. She knew when she took out the loan that she would have to pay it back.
Because other debts - like a car loan or a house note - have actual collateral that can be repossessed. That's why unsecured loan debt is always so high - to make up for the risk. Federal student loans, rates of which are held down by the government, charge lower rates because they CANNOT be discharged.
If federal student loans are dischargeable in bankruptcy, virtually every kid who comes out of college with a zero net worth (or less, when you add in the debt) will just declare bankruptcy. Student loans would become a joke, and even people who could afford to pay for college would borrow so they can take the summer semester in England, go out West skiing, spend spring break in Cancun. Then, upon graduation, they could say, "oops....I'm bankrupt!"
They cannot just declare bankruptcy. There is a high burden that must be met. It is not true that they cannot be discharged though. It's just very hard to do.
Her "excuse" was that the loan was so difficult to manage that they wouldn't be able to keep their house AND continue to pay the monthly amount. So IOW, she and husband bought a house they couldn't afford, when you factor in their other financial obligations.
What the judge should have done, rather than just wipe it all out, is work out a repayment schedule that was amenable to Navient. She knew when she took out the loan that she would have to pay it back.
They did that.
Throughout the process it looks like they paid a little over $100,000.
Navient just kept adding tens of thousands to the balance. While they were going through chapter 7 they added something like $37,000.
Navient are scum suckers. The whole industry is, including schools. It’s predatory of young people and opening up student loans to discharge in bankruptcy is a great thing for the people. Lenders will have to stop handing it out like free candy and that’ll drag on the increase in tuition that is way more than other costs.
Colleges are closed to the general public in many places due to covid.
So? That's a temporary, short-term measure. It's not an excuse to put tax-payers on the hook for hundreds of thousands of dollars of debt.
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