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Message
1
Posted on 12/22/15 at 3:46 pm to Red Stick Tigress
when you file ch. 7, you have three choices with each secured debt: surrender the property and get a discharge, redeem the property by paying fair market value of it; or reaffirm the debt (make an agreement that between you and that creditor your bankruptcy did not happen.)
usually car loans are reaffirmed and furniture is surrendered. typically home loans just "ride through" without taking any of the three choices. the loan is discharged, meaning no one can make you pay it, but you keep paying to avoid foreclosure. if you later default and have not reaffirmed, the lender can take the house but cannot collect the deficiency from you.
usually car loans are reaffirmed and furniture is surrendered. typically home loans just "ride through" without taking any of the three choices. the loan is discharged, meaning no one can make you pay it, but you keep paying to avoid foreclosure. if you later default and have not reaffirmed, the lender can take the house but cannot collect the deficiency from you.
This post was edited on 12/29/15 at 2:45 pm
Posted on 12/22/15 at 3:47 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.
This. Exactly.
Posted on 12/22/15 at 3:47 pm to nawlinsbrah
quote:
I'm afraid Congress will just pass a bailout measure one day because it's "too big to fail."
I sat next to a hipster a few weeks ago who had this as his plan of action. He was dead sure that there would be a nationwide movement to default on student loans, and that the entire "system" (as he put it) would collapse, preventing today's students from having to pay their debts.
In his words, "It isn't fair that the other generations had affordable college, then we have to pay ten times what they paid and go into debt. I shouldn't have to pay on an unfair loan."
Posted on 12/22/15 at 3:49 pm to MSMHater
quote:
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.
First, the ability to discharge was taken away before the Feds became the debt holders.
Second, the federal government, unlike private borrowers, have created multiple programs for lower repayments and forgiveness.
Basically, the Feds are way way way more likely to forgive loams than anyone else, because they are already doing it under IBR, PAYE and PSLF
Posted on 12/22/15 at 3:50 pm to nawlinsbrah
quote:
That's why I think loans shouldn't be "forgiven" but actually discharged through personal bankruptcy. This puts a stain on the person who discharges and punishes her when she, for example, attempts take a mortgage out (no credit). I'm telling you people, this student loan stuff is getting so large, we will all eat it if something is not done.
Great post. I completely agree.
Posted on 12/22/15 at 3:51 pm to moneyg
quote:
No reason?
How about the fact that the rates given are artificially low as a result of there being this law. Or, how about the availability of student loans at all becoming basically nil without the law's existence.
Car loans, house loans have built in collateral. Student Loans? Nope.
Have you really thought this through?
Not all loans have collateral. Did you put up collateral for your first credit card? What about when you bought your first home?
Posted on 12/22/15 at 3:53 pm to Teddy Ruxpin
quote:
Basically, the Feds are way way way more likely to forgive loams than anyone else, because they are already doing it under IBR, PAYE and PSLF
That's great if you have public loans. What options are available for private loans?
Posted on 12/22/15 at 3:55 pm to Teddy Ruxpin
quote:
First, the ability to discharge was taken away before the Feds became the debt holders.
You're absolutely right. I just think the current market makeup is the reason forgiveness won't ever happen. A reg put in place during Bush Jr. greatly benefits the federal student loan program, so I don't see it going away.
quote:
Second, the federal government, unlike private borrowers, have created multiple programs for lower repayments and forgiveness.
Forgiveness for 10 years of public service is
. I wouldn't disparage that. But the terms "offered" by the feds were always worse than my private lenders. I never had a private loan above 3.75%, but all my fed loans are 6.5%. quote:
Basically, the Feds are way way way more likely to forgive loams than anyone else, because they are already doing it under IBR, PAYE and PSLF
What other programs are there that offere loan forgiveness? the burden of proof for discharging them in court is basically "You will never be able to live a functional life with this debt", and I'm not aware of any other ways to forgive or discharge it. I'm genuinely asking, how else can you get rid of it?
This post was edited on 12/22/15 at 3:56 pm
Posted on 12/22/15 at 3:55 pm to MontyFranklyn
quote:
At this point I'm starting to say F the government. They give out all this "aid" to foreign countries and have a ton of wasteful entitlement programs here, but I have to struggle like the rest of the hard working, dwindling middle class. F them, forgive my student loan debt.
The government has made American citizens their enemy not their protectorate. We've been mortgaged by our own leaders.
Here's the worse thing about student loans... in a free debt market you can buy out your debt. Debt is traded and sold on a regular basis companies buy debt with the confidence that it will be paid off and they'll make a profit.
It's the exact same market that tanked the real estate industry and caused the ongoing economic recession from 2008. The exact same principles.
However w/ goverment backed student loans you can't purchase any of your debt. If you had gotten a private student loan, outside of the government ruse you could actually purchase your own debt for a fraction of the total balance and write off the debt yourself by purchasing the debt through a LLC, or you could in theory pay it off back to yourself through the LLC. and report is paid to the credit agencies.
Our government is not our friend.
Posted on 12/22/15 at 3:56 pm to Fewer Kilometers
quote:
I sat next to a hipster a few weeks ago who had this as his plan of action. He was dead sure that there would be a nationwide movement to default on student loans, and that the entire "system" (as he put it) would collapse, preventing today's students from having to pay their debts.
In his words, "It isn't fair that the other generations had affordable college, then we have to pay ten times what they paid and go into debt. I shouldn't have to pay on an unfair loan."
Substitute the word "fair" with "unworkable" and see how your opinion of what he said changes.
Posted on 12/22/15 at 3:58 pm to Flame Salamander
quote:
This is a true prison scam that people get into w/o realizing it.
Posted on 12/22/15 at 4:01 pm to NYNolaguy1
quote:
Did you put up collateral for your first credit card?
No. But, that's due to the small amount of risk.
quote:
What about when you bought your first home?
The house itself serves as security on the loan. You realize this don't you?
Posted on 12/22/15 at 4:03 pm to nawlinsbrah
absolutely. the bar should be pretty high but any debt should be able to be removed via bankruptcy.
Posted on 12/22/15 at 4:04 pm to piratedude
You do not have to reaffirm the mortgage debt.
Posted on 12/22/15 at 4:10 pm to moneyg
quote:
The house itself serves as security on the loan. You realize this don't you?
That really depends on the value of the home, the down payment, and the size of the loan relevant to its present value.
It's very possible a house that's underwater in property value gets foreclosed on. The security of the house doesn't mean much then.
Posted on 12/22/15 at 4:15 pm to moneyg
quote:
How about the fact that the rates given are artificially low as a result of there being this law. Or, how about the availability of student loans at all becoming basically nil without the law's existence.
I think the reason for artificial low interest rates has more to do with the Fed artificially keeping down interest costs for everyone by (formerly) keeping the interest rate at zero.
Posted on 12/22/15 at 4:16 pm to MSMHater
I just meant in the future vs. Private lenders who are definitely not going to forgive anything.
You're right, after IBR, PAYE etc, there is no other way to forgive the loans except through that strict hardship rule.
However, since you pay only 10% of what you make above the poverty line, I'm not sure who would even need any other avenue?
Payments can be as low as $0, $1 and then pay taxes on the forgiven amount.
So in about 20 years we are going to hit that tax bomb.
Are the feds going to let the tax debts be dischargable?
What is the point in forgiveness if you end up not being able to pay the tax bill 20 years from now?
How much money are the feds going to lose by the lower payments plus debtors only paying at their taxable income rate on the forgiven amounts.
Questions the politicians didn't really answer when they passed the band aid legislation. That's why they are scrambling now to put in caps.
You're right, after IBR, PAYE etc, there is no other way to forgive the loans except through that strict hardship rule.
However, since you pay only 10% of what you make above the poverty line, I'm not sure who would even need any other avenue?
Payments can be as low as $0, $1 and then pay taxes on the forgiven amount.
So in about 20 years we are going to hit that tax bomb.
Are the feds going to let the tax debts be dischargable?
What is the point in forgiveness if you end up not being able to pay the tax bill 20 years from now?
How much money are the feds going to lose by the lower payments plus debtors only paying at their taxable income rate on the forgiven amounts.
Questions the politicians didn't really answer when they passed the band aid legislation. That's why they are scrambling now to put in caps.
This post was edited on 12/22/15 at 4:24 pm
Posted on 12/22/15 at 4:23 pm to nawlinsbrah
Federal, no. Private, yes. If not, the interest rates should be regulated for bankruptcy protection.
Posted on 12/23/15 at 10:37 am to CtotheVrzrbck
quote:
It was being abused by doctors and attorneys who would rack 6 figures of loan debt and never pay a penny while making well into 6 figures annually.
Link?
Not saying its not true, just that I have never heard it before.
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