bankrupcy

[Arctic Char]

---

Members do not see this ad.

i recently heard a story of a resident, just finishing residency, who claimed his best option for dealing with debt was simply to file for bankrupcy. now, i just don't buy it. but then again, i can't say i know all the ins and outs of bankrupcy.

so, would someone in their early 30's, with under $200K in loans, who could conservatively expect ~$200K/year after residency (EM), would they have any valid benefit to to file for bankrupcy? i mean, supposedly massive credit card debt was also involved . . . but still . . . ?

i look forward to hearing what the knowledgble have to say.

 

[Llenroc]

This was done a lot in the 1980's but the law was rewritten to make it unfeasible.

Just put it under "not going to happen".

 

[Tired Pigeon]

My understanding is that student loans are now non-dischargeable in bankruptcy. Any lawyers out there to confirm this?

 

[DreamLover]

Just went through my financial aid exit interview and it was definitely stressed that these loans are not forgiven in bankruptcy

only death and permanant dissability allow for federally-backed student loan forgiveness...now private loans are a different story....

 

[LADoc00]

Indeed ALL student loans and not just ones to the Feds are typically not dischargeable unless you can prove MAJOR disability and hardship. Lets just say it has never happen in my county when I asked the local judges about this. (you can easily google search the banking laws in regards to this, it is basically black and white about what debt can and cannot be discharged)

Nearly impossible.

Your ONLY option is to flee/disappear to a foriegn country, but realize INTERPOL can still come for you at anytime as long as you are still in the statute of limitations.

 

[kittykat]

Indeed ALL student loans and not just ones to the Feds are typically not dischargeable unless you can prove MAJOR disability and hardship.

The 2005 law summarized by LADOC00 requires you to show not only major disability and hardship, but that you will not be able to pay for your debts in the future. The rationale was to make sure borrowers of federal and private loans did not reap the benefits of the loans (future earnings) and then stick the financial institutions with the costs. They feel they are operating a business, not a scholarship program.

They also require you to undertake financial counseling (paid by you), and if you make more than the state's median income then you will be required to file Chapter 13 (repayment plans for your debts) instead of chapter 7.

In the end you made a huge investment into your future and received educational training and skills which will put you at a level for great earning potential. Things seem tough now, but you will make it. You've come this far and your future looks bright. Or at least this is what I tell myself when I see all of the materialism and consumerism in our society....my mantra is that my diploma is the best PRADA-whatever l have ever owned.

 

[Yachtclub]

My uncle is a Chapter 13 (bankruptcy) attorney, and from what he's told me, even if student loans WERE dischargeable (they generally aren't), declaring bankruptcy in today's world is universally not a good idea.

Getting a loan to buy a house becomes pretty much impossible for years after declaring bankruptcy, as does trying to finance a car or anything else. So the fact that you're now going to be a 30 year old fresh out of residency yet still unable to live anywhere but a crappy apartment and take the subway to work eliminates any benefit you'd get out of declaring bankruptcy.

The best move to make is suck it up for one year post-residency, live the same lifestyle you did as a resident for one more year, and pay off all of your debt. The next year, start living it up.

 

[NotAProgDirector]

One more thing to add to Yachtclub's list.

I have been told that filing for bankruptcy is public information and is usable by future employers in making hiring decisions. It's felt that filing bankruptcy can be considered a sign of your "trustworthiness" or "reliability".

 

[f_w]

In the 80s, this was the preferred method to pay for law-school. Rack up the bill, remain unemployed for a couple of months, declare chapter 7, wipe out your debt, rent for a couple of years until you are discharged, start with a clean slate.

First they took the ability to discharge student loans, now they took the ability to file a clean chapter7 for most consumers.

 

[cali-ob]

You've obviously been given enough info here to determine that bankruptcy is not the way. It stays on your credit for 7-10 years, and although you will be able to buy a house or car, your interest rate will be more like 10% for a house, versus 6%....it makes a huge difference. Plus, no your student loans aren't going anywhere! I would reccommend a very good book to you, Suze Orman's The Money Book for the Young, Fabulous and Broke. There is a website with message boards on all topics in the book that go along with the book. It's outstanding and will really help you to understand the financial realities of people our age and in our position in life. She talks about debt management, and student loans as well. Check it out.

 

[LADoc00]

I would recommend NEVER taking out student loans unless absolutely neccessary. There is always a cheaper way to get your education in this country.

I was FAR too careless in my borrowing for medical school. Dumb, very dumb.

 

[toothless rufus]

I would recommend NEVER taking out student loans unless absolutely neccessary. There is always a cheaper way to get your education in this country.

I was FAR too careless in my borrowing for medical school. Dumb, very dumb.

I would be interested to hear on how I might pay for my medical education without taking out loans. Or the military. Or that underserved area thingie.

 

[LADoc00]

I would be interested to hear on how I might pay for my medical education without taking out loans. Or the military. Or that underserved area thingie.

Write to rich people for donations, tell them you are going to cure their cancer so some crap. I dont know.

MDPhD is fairly viable if they fully pay for med school.

NIH has programs too.

No, Im not going to feed your inherent laziness and give you all the answers.

 

[toothless rufus]

No, Im not going to feed your inherent laziness and give you all the answers.

Awww, man! (...removes bib and jumper in disappointment...)

 

[GooglieGoo]

Write to rich people for donations, tell them you are going to cure their cancer so some crap. I dont know.

MDPhD is fairly viable if they fully pay for med school.

NIH has programs too.

No, Im not going to feed your inherent laziness and give you all the answers.

Isn't the NIH program a LOAN repayment program? The one I've seen is. I think the bold part above is your full answer. Stop talking out of your ass.

 

[f_w]

Just when I thought I would learn a secret.

 

[EUA]

The best move to make is suck it up for one year post-residency, live the same lifestyle you did as a resident for one more year, and pay off all of your debt. The next year, start living it up.

One year, huh? You're funny.

 

[Yachtclub]

Maybe, but I figure if I'm playing my cards right at thirty I won't have any progeny to feed, and will hopefully be living the dream doing rads somewhere warm (only half joking)

 

[SupergreenMnM]

Maybe, but I figure if I'm playing my cards right at thirty I won't have any progeny to feed, and will hopefully be living the dream doing rads somewhere warm (only half joking)

Radiology? Yeah, you'll be somewhere warm (India/China/Pakistan)
😱

 

[dutchman]

With 4 billion ways you can defer college loans, why would you want to file bankruptcy?

 

[Arctic Char]

right, don't take out loans. just find that really rich relative with nothing better to do with their cash. or, heck, maybe even track down bill gates - 'cause i'm sure he'd be willing to pay for my med school. ahh, hell, what about courtney love? she could also probably afford to help me pay, maybe michael j. fox would lend a hand?

right right . . . great idea!

*****

 

[AmoryBlaine]

The best move to make is suck it up for one year post-residency, live the same lifestyle you did as a resident for one more year, and pay off all of your debt. The next year, start living it up.

Good luck with that. Nobody does this.

 

[toothless rufus]

Good luck with that. Nobody does this.

Really? Why not? It would seem to be possible to pay a good amount of your loans back this way, unless I am missing something.

 

[Apollyon]

Good luck with that. Nobody does this.

Actually, I'm doing that, but not cutting huge amounts out of my loans yet (and that's not for trying).

The only difference is that I didn't live hand-to-mouth as a resident, so the big difference now is that I can buy a lot more on a whim from Amazon. If I was living the poverty lifestyle before, it might be something, but I wasn't.

 

[AmoryBlaine]

Actually, I'm doing that, but not cutting huge amounts out of my loans yet (and that's not for trying).

The only difference is that I didn't live hand-to-mouth as a resident, so the big difference now is that I can buy a lot more on a whim from Amazon. If I was living the poverty lifestyle before, it might be something, but I wasn't.

Ok, ok. I think most people though look to buy a house, etc etc.

 

[razorback58]

If you are disabled and not working they can get very little. In reading state physician licensing requirements they STRESS: Are you in default of a student federal loan. They also can and in many cases ask about if you owe back child support.

I saw on a couple of state websites where the state had taken the physician's license when they were in default or grossly behind of child support. They are even taking license if you do not pay your state tax.
See link to Illinois and look in the medical and nursing section.

http://www.idfpr.com/dpr/news/DISCPLN/0701_dis.pdf