Bankruptcy to get rid of student loans?

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jurisx
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Bankruptcy to get rid of student loans?

Postby jurisx » Sat Jun 02, 2012 9:58 pm

If I pay them off with credit cards and then file it works right?

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TaipeiMort
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Re: Bankruptcy to get rid of student loans?

Postby TaipeiMort » Sat Jun 02, 2012 10:05 pm

jurisx wrote:If I pay them off with credit cards and then fit works right?

How is what you suggest different than stealing 100k from the back of an unattended armored car?
Last edited by TaipeiMort on Sat Jun 02, 2012 10:06 pm, edited 1 time in total.

ToTransferOrNot
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Re: Bankruptcy to get rid of student loans?

Postby ToTransferOrNot » Sat Jun 02, 2012 10:05 pm

No one has ever thought of this idea before. It's sure to work for you!

(But seriously, you might consider looking up "fraud" as well as the bankruptcy crimes related to misuse of the bankruptcy process accomplished through inaccurate, incomplete or misleading statements to the trustee. Not legal advice, blah blah.)

jurisx
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Re: Bankruptcy to get rid of student loans?

Postby jurisx » Sat Jun 02, 2012 10:09 pm

So if I don't care about getting licensed it could still work? If so, why don't people with other degrees do it if it is a C/F issue?

No license to a History degree or the majority of BS degrees people get and then can't find work with.

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IAFG
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Re: Bankruptcy to get rid of student loans?

Postby IAFG » Sat Jun 02, 2012 10:10 pm

jurisx wrote:So if I don't care about getting licensed it could still work? If so, why don't people with other degrees do it if it is a C/F issue?

No license to a History degree or the majority of BS degrees people get and then can't find work with.

...no, he's saying you won't succeed in your attempt to discharge the debt in bankruptcy because of the fraud provisions designed to prevent shit like this.

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Old Gregg
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Re: Bankruptcy to get rid of student loans?

Postby Old Gregg » Sat Jun 02, 2012 10:11 pm

You can't use credit cards to pay off your student loans.

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dresden doll
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Re: Bankruptcy to get rid of student loans?

Postby dresden doll » Sat Jun 02, 2012 10:12 pm

jurisx wrote:So if I don't care about getting licensed it could still work? If so, why don't people with other degrees do it if it is a C/F issue?

No license to a History degree or the majority of BS degrees people get and then can't find work with.


Make sure you use a portion of your loan money on a Bankruptcy course.

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Nom Sawyer
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Re: Bankruptcy to get rid of student loans?

Postby Nom Sawyer » Sat Jun 02, 2012 10:17 pm

Fresh Prince wrote:You can't use credit cards to pay off your student loans.


actually you can a lot of times through opening new credit cards... you'll get a cash advance line that basically means you can just withdraw up to the limit ($5k or $10k) and it shows up as debt on the card. Open enough cards and you can get your hands on $30k+ cash.

Of course you have to pay 3% interest RIGHT away... then more credit card interest.. and then we have the fraud problem everyone is talking about haha

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Old Gregg
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Re: Bankruptcy to get rid of student loans?

Postby Old Gregg » Sat Jun 02, 2012 10:20 pm

If I could charge payments directly to my card, I'd get so many points!

ToTransferOrNot
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Re: Bankruptcy to get rid of student loans?

Postby ToTransferOrNot » Sat Jun 02, 2012 10:22 pm

Fresh Prince wrote:If I could charge payments directly to my card, I'd get so many points!


Ha, yeah, I'd to get 1.25% cash back on my student loan payments. Would make the whole thing a little less painful! But alas.

Anonymous User
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Re: Bankruptcy to get rid of student loans?

Postby Anonymous User » Sat Jun 02, 2012 10:25 pm

Why not just default on the student loan? Your credit is ruined either way.
In the unlikely event you actually have the credit worthiness to get a credit card(s) that has a high enough limit to allow you to pay off your debt, if you don't pay the credit card you will ruin your credit. If it's in bankruptcy that's a minimum of 7 years. Ironically, you will have to find the money to pay the bankruptcy attorney.

But you would do better just calling the student loan lender and telling them you don't have a job or any way to pay them and attempt to have the loan placed in forbearance or have the payments set up so that you're only paying the interest, or even only paying a small percentage of whatever salary you may come by.

Bottom line is--the credit card thing is just not realistic. Bankruptcy is not automatic. It's a process that involves a judge determining the circumstances that led you to need to claim bankruptcy. I'm pretty sure they're going to see right through the credit card scam. But, they could still prevent you from going bankrupt and force you to pay off a portion of the credit card debt, which undoubtedly will have a much higher interest rate than your student loans (federal not necessarily private).

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buckilaw
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Re: Bankruptcy to get rid of student loans?

Postby buckilaw » Sat Jun 02, 2012 10:58 pm

Even if this works you could run into character and fitness issues.

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Tanicius
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Re: Bankruptcy to get rid of student loans?

Postby Tanicius » Sat Jun 02, 2012 11:10 pm

Why not just default on the student loan?


You can't. Federal law.

flcath
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Re: Bankruptcy to get rid of student loans?

Postby flcath » Sat Jun 02, 2012 11:14 pm

The inconvenience of student loan debt (where you can't start a family, buy a house, or qualify for small business loans) is still better than prison (where you get raped).

Anonymous User
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Re: Bankruptcy to get rid of student loans?

Postby Anonymous User » Sat Jun 02, 2012 11:29 pm

Tanicius wrote:
Why not just default on the student loan?


You can't. Federal law.



A default is just a failure to pay in accordance with the terms.
If they send you a bill and you don't pay you have defaulted.
Eventually they will report you to credit agencies, your credit rating will tank and you will be unable to secure financing or other credit. But if you start to pay you can begin to repair your credit in just 24 months. But bankruptcy can cause similar credit issues, although, you're more likely to be offered a credit card in order to repair your credit just after a bankruptcy.

ToTransferOrNot
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Re: Bankruptcy to get rid of student loans?

Postby ToTransferOrNot » Sat Jun 02, 2012 11:44 pm

Anonymous User wrote:
Tanicius wrote:
Why not just default on the student loan?


You can't. Federal law.



A default is just a failure to pay in accordance with the terms.
If they send you a bill and you don't pay you have defaulted.
Eventually they will report you to credit agencies, your credit rating will tank and you will be unable to secure financing or other credit. But if you start to pay you can begin to repair your credit in just 24 months. But bankruptcy can cause similar credit issues, although, you're more likely to be offered a credit card in order to repair your credit just after a bankruptcy.


The federal government is not a normal creditor.

Anonymous User
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Re: Bankruptcy to get rid of student loans?

Postby Anonymous User » Sat Jun 02, 2012 11:48 pm

ToTransferOrNot wrote:
Anonymous User wrote:
Tanicius wrote:
Why not just default on the student loan?


You can't. Federal law.



A default is just a failure to pay in accordance with the terms.
If they send you a bill and you don't pay you have defaulted.
Eventually they will report you to credit agencies, your credit rating will tank and you will be unable to secure financing or other credit. But if you start to pay you can begin to repair your credit in just 24 months. But bankruptcy can cause similar credit issues, although, you're more likely to be offered a credit card in order to repair your credit just after a bankruptcy.


The federal government is not a normal creditor.


The federal government wants it's money like a normal creditor.
The difference is that the federal government can garnish your wages in order to get their money unlike a normal creditor.

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amg414
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Re: Bankruptcy to get rid of student loans?

Postby amg414 » Sat Jun 02, 2012 11:53 pm

Anonymous User wrote:
The federal government wants it's money like a normal creditor.
The difference is that the federal government can garnish your wages in order to get their money unlike a normal creditor.


I assure you that any creditor can garnish your wages in order to get their money, at least in New Jersey.

dixiecupdrinking
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Re: Bankruptcy to get rid of student loans?

Postby dixiecupdrinking » Sun Jun 03, 2012 12:34 am

This definitely will not work. Not entirely sure of all the mechanisms that would prohibit it but Bankruptcy Code § 727(a) is a start.

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MrPapagiorgio
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Re: Bankruptcy to get rid of student loans?

Postby MrPapagiorgio » Sun Jun 03, 2012 12:41 am

There was a thread on here not too long ago where a guy was considering taking the equity out of his house, paying for law school with said equity and thus circumventing the non-dischargeable nature of student debt. Can't find the thread, but I don't think there was a consensus. I suppose it could work if you paid tuition in one lump sum because you would then be paying back a home equity loan and not student loans. I dunno.

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ben4847
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Re: Bankruptcy to get rid of student loans?

Postby ben4847 » Sun Jun 03, 2012 12:49 am

dixiecupdrinking wrote:This definitely will not work. Not entirely sure of all the mechanisms that would prohibit it but Bankruptcy Code § 727(a) is a start.


Never studied bankruptcy, but I don't see what you're seeing there.

(a) The court shall grant the debtor a discharge, unless—
(1) the debtor is not an individual;
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed—
(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition;
(3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or in connection with the case—
(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs;
(5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities;
(6) the debtor has refused, in the case—
(A) to obey any lawful order of the court, other than an order to respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify;
(7) the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider;
(8) the debtor has been granted a discharge under this section, under section 1141 of this title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case commenced within 8 years before the date of the filing of the petition;
(9) the debtor has been granted a discharge under section 1228 or 1328 of this title, or under section 660 or 661 of the Bankruptcy Act, in a case commenced within six years before the date of the filing of the petition, unless payments under the plan in such case totaled at least—
(A) 100 percent of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of such claims; and
(ii) the plan was proposed by the debtor in good faith, and was the debtor’s best effort;
(10) the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter;
(11) after filing the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111, except that this paragraph shall not apply with respect to a debtor who is a person described in section 109 (h)(4) or who resides in a district for which the United States trustee (or the bankruptcy administrator, if any) determines that the approved instructional courses are not adequate to service the additional individuals who would otherwise be required to complete such instructional courses under this section (The United States trustee (or the bankruptcy administrator, if any) who makes a determination described in this paragraph shall review such determination not later than 1 year after the date of such determination, and not less frequently than annually thereafter.); or
(12) the court after notice and a hearing held not more than 10 days before the date of the entry of the order granting the discharge finds that there is reasonable cause to believe that—
(A) section 522 (q)(1) may be applicable to the debtor; and
(B) there is pending any proceeding in which the debtor may be found guilty of a felony of the kind described in section 522 (q)(1)(A) or liable for a debt of the kind described in section 522 (q)(1)(B).

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dresden doll
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Re: Bankruptcy to get rid of student loans?

Postby dresden doll » Sun Jun 03, 2012 1:12 am

ben4847 wrote:
dixiecupdrinking wrote:This definitely will not work. Not entirely sure of all the mechanisms that would prohibit it but Bankruptcy Code § 727(a) is a start.


Never studied bankruptcy, but I don't see what you're seeing there.


Even if you've never studied bankruptcy, surely you can imagine that there's protection in the Code against abusive filings.

flcath
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Re: Bankruptcy to get rid of student loans?

Postby flcath » Sun Jun 03, 2012 1:15 am

MrPapagiorgio wrote:There was a thread on here not too long ago where a guy was considering taking the equity out of his house, paying for law school with said equity and thus circumventing the non-dischargeable nature of student debt. Can't find the thread, but I don't think there was a consensus. I suppose it could work if you paid tuition in one lump sum because you would then be paying back a home equity loan and not student loans. I dunno.

I don't see what the problem with this is, off the top of my head. This seems like a totally different thing than the OP's plan (which is fraudulent).

The equity in a home was previously cash of the homeowner, so I don't see how it's different from selling stocks that you own to pay off student loans. If there was a problem, it'd be with your mortgagee, but defaulting on that just leads to foreclosure.

(Of course, I really have no idea.)

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Tangerine Gleam
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Re: Bankruptcy to get rid of student loans?

Postby Tangerine Gleam » Sun Jun 03, 2012 1:18 am

O what a scholar

ben4847 wrote:
Never studied bankruptcy, but I don't see what you're seeing there.

(a) The court shall grant the debtor a discharge, unless—
(1) the debtor is not an individual;
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed—
(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition;
(3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or in connection with the case—
(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs;
(5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities;
(6) the debtor has refused, in the case—
(A) to obey any lawful order of the court, other than an order to respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify;
(7) the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider;
(8) the debtor has been granted a discharge under this section, under section 1141 of this title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case commenced within 8 years before the date of the filing of the petition;
(9) the debtor has been granted a discharge under section 1228 or 1328 of this title, or under section 660 or 661 of the Bankruptcy Act, in a case commenced within six years before the date of the filing of the petition, unless payments under the plan in such case totaled at least—
(A) 100 percent of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of such claims; and
(ii) the plan was proposed by the debtor in good faith, and was the debtor’s best effort;
(10) the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter;
(11) after filing the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111, except that this paragraph shall not apply with respect to a debtor who is a person described in section 109 (h)(4) or who resides in a district for which the United States trustee (or the bankruptcy administrator, if any) determines that the approved instructional courses are not adequate to service the additional individuals who would otherwise be required to complete such instructional courses under this section (The United States trustee (or the bankruptcy administrator, if any) who makes a determination described in this paragraph shall review such determination not later than 1 year after the date of such determination, and not less frequently than annually thereafter.); or
(12) the court after notice and a hearing held not more than 10 days before the date of the entry of the order granting the discharge finds that there is reasonable cause to believe that—
(A) section 522 (q)(1) may be applicable to the debtor; and
(B) there is pending any proceeding in which the debtor may be found guilty of a felony of the kind described in section 522 (q)(1)(A) or liable for a debt of the kind described in section 522 (q)(1)(B).

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Br3v
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Re: Bankruptcy to get rid of student loans?

Postby Br3v » Sun Jun 03, 2012 1:20 am

flcath wrote:
MrPapagiorgio wrote:There was a thread on here not too long ago where a guy was considering taking the equity out of his house, paying for law school with said equity and thus circumventing the non-dischargeable nature of student debt. Can't find the thread, but I don't think there was a consensus. I suppose it could work if you paid tuition in one lump sum because you would then be paying back a home equity loan and not student loans. I dunno.

I don't see what the problem with this is, off the top of my head. This seems like a totally different thing than the OP's plan (which is fraudulent).

The equity in a home was previously cash of the homeowner, so I don't see how it's different from selling stocks that you own to pay off student loans. If there was a problem, it'd be with your mortgagee, but defaulting on that just leads to foreclosure.

(Of course, I really have no idea.)


Your assuming he had the $ for the house. He could have just put
Your typical 10% down or whatever, took a 2nd mortgage, and then waddles himself into C&F issues




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