If someone is declaring bankruptcy, they have no money to pay their bills. So how does the system expect the person to payback a massive student loan (ie. $53,000.00)
2007-08-01 18:03:18 · 11 answers · asked by mprush12 2 in Business & Finance ➔ Credit
That's because a bunch of students in the 80's pulled that scam and so they shut that loophole down.
They graduate with a bunch of student loans, declare bankruptcy and then the various lenders including the Federal government was left holding the bag.
2007-08-01 18:06:16 · answer #1 · answered by feanor 7 · 1⤊ 1⤋
Not if the banking industry has anything to say about it, nor higher education. It was only recently they changed bankruptcy laws to put a higher priority on paying back credit cards than mortgages. What happened is people who had enough money to pay their mortgages but not their credit cards were forced to put the money toward their credit card balance before defaulting on both. So they could have saved their homes in many cases, but the banking industry wanted them to lose their homes. If people who borrowed an outrageous amount of money to pay for college—which is, after all, what higher education costs nowadays—knew that if they couldn't find a job, they could default, it would be harder to get loans. Now that's not necessarily a bad thing. Too many people have been conned into taking out loans to finance an education. It is risky in most cases, because you really can't know what the job market for your specialty will be when you get out. But then colleges would have to control their prices and stop lying to students about the real value of what they are learning. American students would no longer be seen as the goose that laid the golden egg. ∠°)
2016-05-20 22:48:29 · answer #2 · answered by ? 3 · 0⤊ 0⤋
get a job and work to pay it off. Nobody would give student loans out if they could be erased by bankruptcy.
$53,000 is not massive. They give you a long time to pay them off, and at a subsidized interest rate. I know, I had them when I was younger and I paid them all off on time. They were a great deal and I hope people like you don't screw it up for the next generation by trying to get something for nothing.
2007-08-01 18:08:00 · answer #3 · answered by John M 7 · 2⤊ 0⤋
Student loans are never charged off in bankruptcy. This was clearly detailed in the note that you signed at the time you got the loan.
If you're ridding yourself of all other bills, surely you can afford to make good on ONE debt, can't you?
2007-08-02 01:44:20 · answer #4 · answered by Christie 4 · 0⤊ 0⤋
Because they are backed by the government and they are not going to take a loss on it. Same thing with IRS debt, that doesn't go into bankruptcy either. Or child support.
2007-08-01 18:25:21 · answer #5 · answered by HEATHER 6 · 1⤊ 0⤋
I would like to think that $53,000 managed to pay for some sort of degree which could be used to get a decent job with which to pay off the $53,000 loan. Just how MUCH of a free ride do you expect here ?
2007-08-01 21:53:59 · answer #6 · answered by acermill 7 · 1⤊ 0⤋
Bankruptcy isn't a free-ride! So many people think that.
It isn't a way to scam your way out of debts!!!
You can pay the loans back later, it doesn't matter that you don't have the money now. You will someday.
You took the money, now you have to pay it back!
2007-08-01 18:06:25 · answer #7 · answered by Anonymous · 3⤊ 0⤋
Would you want everyone else to be able to write off money borrowed from the Federal Government? When federal government money is lost, borrowed, or earned it affects everyone. It is the citizens money. You would be scamming the general population out of that money,not just a credit card company.
2007-08-01 18:11:04 · answer #8 · answered by luvfurypassionenergybabe 5 · 1⤊ 0⤋
Because they are government and government loans cannot be included in bankruptcy. That's just the way it is...
2007-08-01 18:06:22 · answer #9 · answered by Incognito 6 · 0⤊ 1⤋
Because you borrowed the money from the Feds. It's the same with certain taxes.
2007-08-02 06:17:07 · answer #10 · answered by Dewey K 2 · 0⤊ 0⤋