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Started By
Message
Spinoff: should school debt be dischargeable through bankruptcy?
Posted on 12/22/15 at 2:49 pm
Posted on 12/22/15 at 2:49 pm
School loans are an investment in your future just like a business loan would be an investment in one's future. Currently, bankruptcy law will not allow one to discharge student loan debt via bankruptcy, however, collectively, student loan debt is ballooning to staggering levels. Not to mention, the growing amount of people missing payments.
Thoughts?
October '15 article laying out this question
Thoughts?
October '15 article laying out this question
This post was edited on 12/22/15 at 2:50 pm
24
Posted on 12/22/15 at 2:51 pm to nawlinsbrah
No debt should be written off by bankruptcy. You buy it, you pay for it.
Posted on 12/22/15 at 2:52 pm to nawlinsbrah
It already is in extreme cases. The catch is that you cant get any federal assistance ever again. For example, if another Katrina were to come, FEMA aint giving you shite.
Posted on 12/22/15 at 2:53 pm to nawlinsbrah
Payed off my student loans right before I bought my 2015 Tesla Model S p85d. OT baller right here.
Posted on 12/22/15 at 2:53 pm to nawlinsbrah
All debt should be the same. No reason why student loans can't be discharged while credit card, car loans, house loans, etc can be.
Posted on 12/22/15 at 2:53 pm to nawlinsbrah
quote:
bankruptcy law will not allow one to discharge student loan debt via bankruptcy,
I honestly didn't know this until after I graduated. I kinda had a plan that went to shite with this information.
Posted on 12/22/15 at 2:54 pm to nawlinsbrah
Student loans not being able to be charged off is the only way students with no credit and no jobs could get a loan.
Try getting a business loan with no credit and no income when a bank knows full well you could possibly default and get it discharged via bankruptcy.
Your comparison is bad.
Try getting a business loan with no credit and no income when a bank knows full well you could possibly default and get it discharged via bankruptcy.
Your comparison is bad.
Posted on 12/22/15 at 2:54 pm to NYNolaguy1
quote:
ll debt should be the same. No reason why student loans can't be discharged while credit card, car loans, house loans, etc can be.
This is my thoughts. The problem is if we can't allow them to discharge via bankruptcy, I'm afraid Congress will just pass a bailout measure one day because it's "too big to fail."
Posted on 12/22/15 at 2:56 pm to nawlinsbrah
Sure, just forfeit your diploma and make it fraud to claim you still have it.
Posted on 12/22/15 at 2:58 pm to nawlinsbrah
Corporations do it every day.
Why not humans? Oh yeah, I forgot...corporations run the government.
Why not humans? Oh yeah, I forgot...corporations run the government.
Posted on 12/22/15 at 2:58 pm to stout
quote:
Try getting a business loan with no credit and no income when a bank knows full well you could possibly default and get it discharged via bankruptcy.
My point exactly. It went entirely over your head.
Posted on 12/22/15 at 2:58 pm to stout
quote:
Student loans not being able to be charged off is the only way students with no credit and no jobs could get a loan.
If the loans weren't guaranteed by the federal government via Sallie Mae, I would totally agree with you. As it stands, all people that qualify for Stafford loans are eligible despite credit worthiness (or lack thereof)
The only people that would lose money by them defaulting is the federal government.
Posted on 12/22/15 at 3:00 pm to SundayFunday
quote:
Sure, just forfeit your diploma and make it fraud to claim you still have it.
Yep. There's no collateral on it, which I'm assuming is why you can't discharge it through bankruptcy .
Posted on 12/22/15 at 3:05 pm to Epic Cajun
quote:
Yep. There's no collateral on it, which I'm assuming is why you can't discharge it through bankruptcy .
I really hope the word gets out to the next generation not to take much out for student loans although I read where La now requires all high school grads to sign a FASFA (Federal Student Aid) form in order obtain their diploma.
Posted on 12/22/15 at 3:05 pm to nawlinsbrah
The bankruptcy issue isn't really that big when you consider the IBR, PAYE and PSLF programs in place that can basically make bankruptcy a moot point.
Posted on 12/22/15 at 3:08 pm to nawlinsbrah
I would be ok with it as long as we change ALL bankruptcy laws in the process.
The law should be:
Once you declare bankruptcy ONCE, you are never eligible for a loan of any type or measure for the rest of your life. Must pay cash for everything.
The law should be:
Once you declare bankruptcy ONCE, you are never eligible for a loan of any type or measure for the rest of your life. Must pay cash for everything.
Posted on 12/22/15 at 3:08 pm to nawlinsbrah
quote:
I read where La now requires all high school grads to sign a FASFA (Federal Student Aid) form in order obtain their diploma.
You have to fill that out to get TOPS. I find it odd to force the kids to fill it out, but it doesn't necessarily mean they are doing it to attempt to get loans.
Posted on 12/22/15 at 3:09 pm to nawlinsbrah
quote:
Thoughts?
Currently, the federal government is the largest lender of student loans in the country, meaning they are also the largest debt holder in that market. When you default on one of their loans, they make more money off your default + payments than they do when you pay everything off on time. If they allowed you to discharge that debt with bankruptcy, that means they lose money on their "investment". And that ain't happening. The are going to collect their debt. So no discharge for you as long as the feds remain in the market.
Posted on 12/22/15 at 3:09 pm to Epic Cajun
Speaking of debts and so forth...has anyone cracked the code on 1099s?
Once had a balance on a card but thought it was paid and closed. Got a 1099 for it at end of year. Paid the extra money on taxes.
- Why did the thing continue to show on my credit report? If creditor got to deduct it and I was assessed that extra income, it should have reflected as paid and closed. Effectively the money was transacted.
- Called creditor and asked if I could pay the amount, they said yes and that they'd update credit bureau.
- I then asked if they would notify IRS so I could get the 1099 reversed. They said I had to take it up with the IRS myself. I called the IRS and they had no answer, at all. They acted as if they'd never heard such a thing.
I've never found a reference on 1099's that clarifies what happens in such situations.
Once had a balance on a card but thought it was paid and closed. Got a 1099 for it at end of year. Paid the extra money on taxes.
- Why did the thing continue to show on my credit report? If creditor got to deduct it and I was assessed that extra income, it should have reflected as paid and closed. Effectively the money was transacted.
- Called creditor and asked if I could pay the amount, they said yes and that they'd update credit bureau.
- I then asked if they would notify IRS so I could get the 1099 reversed. They said I had to take it up with the IRS myself. I called the IRS and they had no answer, at all. They acted as if they'd never heard such a thing.
I've never found a reference on 1099's that clarifies what happens in such situations.
Posted on 12/22/15 at 3:10 pm to nawlinsbrah
I paid off my student (and all credit card) debt this year. It was a good feeling.
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