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This is the second time I reply to the same question No I don't know who funds the DOE.
Why can't student loans be dismissed through bankrupcy
Started by Just kiss me
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We do!!! Have you ever received a paycheck?
And I also don't know how that is related to voting.
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Of course I have.
I sympathize with you, but it's not going to happen to existing loans (I was talking about the future). The money was doled out on the basis that it couldn't be discharged in bankruptcy (except under rare special circumstances). Changing the rules in the middle of the game wouldn't be fair to the lender (and it's actually worse than that- since many lenders don't keep their loans on their portfolio anymore but rather sell or securitize them into assets that are ultimately held be "innocent" parties like, for e.g., the investment portfolio of your local teacher's pension fund). More than likely the school will win (kept their tuition from you) and the lender will win (already sold the loan) and you'll be "taking" money from someone else at that point.
I think too many people are looking at this from an emotional angle. e.g. special considerations out of empathy or opinions on what is enough profit for a lender. (Including some of you attacking the OP). Missed a chance for an intelligent discussion on policy changes, because just because it's colossally unfair to change to rules in the middle doesn't mean the game is that fair to begin with.
I think too many people are looking at this from an emotional angle. e.g. special considerations out of empathy or opinions on what is enough profit for a lender. (Including some of you attacking the OP). Missed a chance for an intelligent discussion on policy changes, because just because it's colossally unfair to change to rules in the middle doesn't mean the game is that fair to begin with.
Where do you think the money that gets taken out each time goes?
Maybe the government?
Yes. See where this is going?
Not really, are you saying that it is our withheld taxes that fund the DOE for our student loans? if so then they will always be funded regardless.
Seriously? Why should I have to pay for your default?
Believe me, I'm not worried about the DOE going out of business because one person doesn't want to pay what they owe in loans.
OP needs to educate herself before making such outlandishly naive statements. I'm really hoping she doesn't ever vote either, or get into med school for that matter. Too f***ing immature. #ICallEmAsISeeEm
Unfortunately your wishes will never be law. And by the way, it is only immature people who curse and insult, I'm so much bigger than that.
I actually think some of Liz Warren's stuff is good. I.e. lower student loan interest rates etc.
I mean, money is a made up thing though so...
But really, I think the OP has no idea what 'special circumstances' are.
OP needs a ground-up civics lesson but this isn't the place for it nor do I have the time. I would say our education system has failed us yet again but that's just another discussion regarding the DOE.
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I guess you are right, no one would want to pay for someone else's debt.
This thread is very sad..
Bottom line OP. Educational loans cannot be discharged in bankruptcy 99.9% of the time and there is a very logical argument for this policy.
Bottom line OP. Educational loans cannot be discharged in bankruptcy 99.9% of the time and there is a very logical argument for this policy.
You FINALLY get it.
Yes but some slick politician said guaranteed federal loans will provide education to poor people and tugged the heart strings of people like OP, fooling them into a winning a vote with no consideration of the consequences.
Maybe I do, thanks for making me understand the whole thing better, but I still think that there should be provisions for extenuating circumstances, we are all humans, we all stumble at some point, when there is no way out, people tend to want to commit suicide, which is worse than anything else.OP needs a ground-up civics lesson but this isn't the place for it nor do I have the time. I would say our education system has failed us yet again but that's just another discussion regarding the DOE.
Fair enough, but the question that needs to be asked is how severe must these circumstances be to make taxpayers pay, or in the case of private loans, how much of a loss should the lender endure? There are varying degrees of circumstances as well as varying levels of forgiveness.
So if I lend you a hundred bucks and you never pay me back, then no one has paid for it?
Uh. I have.
Except residency pays more than minimum wage...and once you are done with residency, you are making (hopefully) at least $200k every year. Also, eating ramen every day will kill you before you even finish medical school.
Does it now?
Yeah it does with the exception of a few specialties. 50-55k for 50-60 hours per week plus variable benefits, 3-4 weeks vacation.
Are you counting hours spent on education outside the classroom 'work'? What about planning cases, notes, presentations, etc?
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I miss those penguins too lol.
Isn't that what the minimum wage is in some places now 😛
I was counting prep time and educational time which tacks onto those 80 hrs tbh.
"As of July 2009, the federal government mandates a nationwide minimum wage level of $7.25 per hour, while some states and municipalities have set minimum wage levels higher than the federal level, with the highest state minimum wage being $9.32 per hour in Washington as of January 1, 2014." - from google search "minimum wage by state"
I agree, but will add that in 2005, Congress amended bankruptcy laws so that private loans are also excepted from discharge absent an undue hardship. The legal standards are now the same.
Well that poster lasted long
Seattle went up to $15/hour IIRC at this last election. They are certainly the exception, though, not the rule.
That's not true. Income taxes can be discharged if they are more than 3 years old provided you pass certain statutory requirements. And this "pay or die" phrase that keeps going around is inaccurate. There are limited exceptions to the rule that student loans are not dischargeable in bankruptcy. And even outside the bankruptcy process, loans can be discharged because of, among other things, permanent total disability. There are also several loan forgiveness programs that are beyond the scope of this thread. It is not pay or die. It might be difficult, but there are other possibilities.
The "pay or die" GOT reference was a joke, since the OP kept insisting that changing her mind was reason enough to get her student loans discharged. I've written extensively on the general nondischargeability of student loans farther back in the thread, if you go back and look through my prior comments.
As for the nondischargeability of income taxes, I tried to keep it simple for the thread. While you may be able to discharge income taxes after the statutory time period you mention, assuming all other requirements are met, bankruptcy doesn't wipe out IRS liens securing the debt (kind of like how bankruptcy doesn't erase your first mortgage lien). And guess what--IRS liens cover not only the property you own at the time the lien is filed, it covers anything you ever acquire in the future, until it is paid. So you pay anyway, one way or another.
Loan forgiveness was discussed earlier in the thread but wasn't really what the OP was asking about, and I mentioned other instances where student loans can be discharged outside of bankruptcy earlier in the thread.
I think the underlying point of most of the comments on this thread is that one should not go to medical school and undertake this kind of debt unless they are very sure they want to be a doctor. The bar for dischargeability is very, very high, and definitely doesn't include changes of heart.
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Follow the news a bit more closely:
http://money.cnn.com/2014/06/02/news/economy/seattle-minimum-wage/
If you go bankrupt, they can take your house back, but they can't take the education they paid for away from you.
Personally, I think it's far more disappointing that we just let people forgive their debts. You borrow money, you pay it back. Nobody cares if you fail out of school, crash the car you spent money on, or have to live on a budget because of it...if you borrow money, you pay it back.
Does that mean that if I am offered a forgiveness program or a way out I will not take it? No, that'd be silly. I'll use what I can get to end up in the best financial state I can. But I do not feel entitled to such things.
One of the major causes of bankruptcy filings is medical debt.
That's its own separate subject which needs to be drastically overhauled in this country. You'd think that if medical debt is causing other debts (which were conscious choices) to be defaulted, there would be more motivation to address the issue, but so far we seem pretty hesitant to grapple with the giant healthcare monster.
I agree and disagree. Debt forgiveness and being able to find financial relief from a bad decision you made years ago is a good thing. In my opinion, a lot of what you guys have been posting is not really a symptom of our lenient loan forgiveness programs in the U.S., but the mindset our culture creates and the poor financial education we provide people (basically, none). People who are indoctrinated to see status symbols like fancy cars, nice clothes, and flashy nights out at the club don't have the fiscal mindfulness to understand that many of their decisions will end up costing them a fortune over time.
The education system in America leaves a lot to be desired, and its ability to teach its citizens practical, everyday knowledge is only the beginning. The OP is a great example.
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It depends...I admit that I am not certain what the nitty-gritty details of bankruptcy are.
In my mind, ideally, if you declare bankruptcy you should be able to keep a small allotment of clothes (enough for daily wear, business, and at least one job-interview setup), your basic kitchen supplies, and, if you are unemployed at the time, enough money for a few months rent and food in your area while you look for a job. If you have children, you should keep some extra for food and childcare during job hunt/initial employment. Maybe every member of the household gets a large suitcase to keep what matters to them. You should lose all property, vehicles, and material possessions beyond those described above - they would be auctioned off and the proceeds should go proportionally to the owners of the debt.
Debt would be forgiven, aside from student loans which should not be discharged, as they went only towards education which cannot be taken back. However, payments and interest should go into deferral until a set threshold of income/assets is reached. No additional credit should be given for some minimum period of time, except perhaps secured cards which are not really credit anyway.
Perhaps a mandatory fiscal responsibility class or something which must be passed before you can apply for bankruptcy?
I'm sure the above is naive in many ways - as I said, I am not particularly familiar with these areas. However, that's my starting point, and I'd be glad to hear any opinions/perspectives from those more educated which clarify things.
There are multiple chapters of bankruptcy. In Chapter 7's what you are allowed to keep is largely state-dependent. In Oklahoma you get to exempt out a large number of your cows and hogs.
The idea isn't to leave your debtor completely destitute.
This already exists. They have to complete a post-filing class, too.
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I think it's a tricky subject, but growing up in a family that has gone through bankruptcies before I understand how stressful and seriously unnerving it can be to go through something like that. People often forget that bankruptcy laws don't just cover loan crises. It can happen through a rocky divorce, terrible environmental happenings, or what have you. How do you handle a bankruptcy case where a person is $25,000 in the hole on their credit cards, but was hit by a hurricane recently and lost their home? Should they be further harmed by their debtors getting their "fair share" back? What about someone that was robbed and cannot make any foreseeable payments on their car loan for the next 3 months?
What you described would be more "just" in the eyes of the lender and society at large, but I think that this problem extends much further than an ideal life scenario or blaming some misinformed, trigger happy spenders. It's connected to our nation's problems with urban poverty, poor financial education, regulatory actions by the federal government on lenders, and the lender's own prudence to give the money in the first place.
The financial crisis was an interesting piece of history because the dialogue that came from that is what we are talking about pretty much right now. Who is to blame in a situation where there are larger-than-individual-scale defaults and bankruptcies?
My albeit limited opinion is that we need to have stronger, but flexible regulations for markets ESPECIALLY student loans. We also need better, more practical supplemental education for people prior to leaving high school. Student loan debt has long since surpassed credit card debt and if there isn't relief for people soon I feel like it's going to be exactly like what we experienced with all those loans going out to people during the housing crash. No one can pay it back because interest rates only go higher as tuition skyrockets.
What you described would be more "just" in the eyes of the lender and society at large, but I think that this problem extends much further than an ideal life scenario or blaming some misinformed, trigger happy spenders. It's connected to our nation's problems with urban poverty, poor financial education, regulatory actions by the federal government on lenders, and the lender's own prudence to give the money in the first place.
The financial crisis was an interesting piece of history because the dialogue that came from that is what we are talking about pretty much right now. Who is to blame in a situation where there are larger-than-individual-scale defaults and bankruptcies?
My albeit limited opinion is that we need to have stronger, but flexible regulations for markets ESPECIALLY student loans. We also need better, more practical supplemental education for people prior to leaving high school. Student loan debt has long since surpassed credit card debt and if there isn't relief for people soon I feel like it's going to be exactly like what we experienced with all those loans going out to people during the housing crash. No one can pay it back because interest rates only go higher as tuition skyrockets.
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What I feel this brings up on a larger scale however, is how do you balance a system that stands to make profit on things that many people in society are beginning to consider a basic human right? Higher education and healthcare are fast becoming things people expect to receive, and are also fast becoming some of the most expensive things to obtain. How do you provide this for your population when everyone wants to be a middle man in the process and make a buck off people's "basic rights"? Who loses out? How do you make that system equal for everyone?
Most importantly, how do you help the people that fall through your system's cracks or are taken advantage of by people within the system?
Most importantly, how do you help the people that fall through your system's cracks or are taken advantage of by people within the system?
1. They often cannot take your residence. It's often literally the only thing that cannot be taken and a major motivator for an individual to declare chapter 7 bankruptcy in the first place. (depends on how much equity you have in it)
2. Attacking bankruptcy provisions on a moral ground is utterly naive. It's not nearly that simple. If we saw it as a hard line than it effectively becomes debtor prisons for a not-insignificant number of Americans. Also, I think a lot of people on SDN have zero idea of how finance or credit markets work. Lenders, and later investors in the resulting securitized debt, have default risk priced in. It's to be expected in finance almost like a natural law is in the sciences.
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