The student loan bankruptcy law, as currently written, is wrong, draconian, extremely punitive and a gross over-reaction to the abuses of the student loan system that occurred in decades past.

They changed the law to make it more difficult to bankrupt your student loans, MUCH MORE DIFFICULT!

If the law can be changed that way why can't it be changed the other way?

An attitude of "Oh well, we must work within the system" spells misery for thousands of good people.

Every day in this country individuals and businesses go bankrupt. Their bankruptcies impact on all of us down the line. Why are the dollars they owe less valuable than the dollars student loan debtors owe?

I'm not for running away from debts so save your arguments. I am for hard, FAIR, justice-based solutions that do not grind people in their old age into poverty.

If you want to change the laws then see the links I posted earlier. It can be done if we all unite and apply political pressure!

This is NOT a political action site; this is a site designed to assist those with credit problems, including SLs.

My patience is wearing thing. VERY thin.

Quilty, hopefully I am not wandering where I shouldn't, but...

for the OP, the significant distinction is that one type of debt is privately backed while the other is taxpayer backed. Those debts backed by the public should have an inherently higher standard for discharge.

And that's all I will opine about that in this forum...

Centex, you are a gem!

I'm betting you think Christmas is a "waste of time".

Bankruptcy is in the original US Constitution, BEFORE even the Bill of Rights. It is GUARANTEED by the US Constituion, everyone has the RIGHT to have legitimate acess to it. Your position is at odds with that seminal document to US law.

What gives you the right to your position? Mine come from the US Constitution.

Pauper, sorry, your posts are being moderated again. You can post, if it's contributing something, we'll make it visible. If it isn't, no one will see it. Your overwhelming anger is just not wanted here. Try http://www.studentloanslave.org - they are an activist group and you can vent all you want to there, that's just not what we do here.

Centex, you've been right on the money. Unfortunately, I think I see some of the OP's problem and this is just not the right place for it, as you just stated very well.

You know, I contacted the owner of the studentloanslave site, and we are linking to that site - feel free to send anyone who feels they've been cheated and need to scream at someone and cry about their victimization. Perhaps they will make good activists. I can't for the life of me figure out why they come here and want to take this board over and paper it with their anger.

Yeah, breeze, I hate that.

Geez, I can't even go get a shower without crap erupting all over the place!

For the RECORD, pauper, I SAID that trying to get out of paying student loans was chickenshit, not YOU were a chickenshit. Learn to read before you accuse.

psp, I think the anger is pretty much uncontrollable, it doesn't matter who says what.

Now you've crossed over into history, which is my fave subject, lol.
So grab a cup of coffee, and sit.


Early American law had no consumer bankruptcy provision. Debtor's prisons were the order of the day.
Neither the Articles of Confederation nor the U.S. Constitution contained specific provisions for bankruptcy -- although the Constitution did give Congress the power to establish new laws, including uniform federal bankruptcy laws.

In 1800, by one vote, Congress passed the very first American bankruptcy law.
It was very similar to the 1705 British law, although a fraudulent bankrupt could not be sentenced to death as they could in England.
It was repealed three years later.

Congress tried again in 1841, after the abolishment of debtors' prisons.
The new act allowed for both commercial and consumer debtors.
Debtors could claim some very basic exemptions, although there were strict limits on what debts could be discharged. Debtors as well as creditors could file cases.
This creation of debtor filings -- voluntary bankruptcies -- was a huge event. Thousands of debtors filed for and received discharges and creditors received very little.
Surprise.... The act was repealed after just two years.

Congress tried yet again in 1867.
This law again allowed for both consumer and non-consumer debtors, and allowed voluntary and involuntary cases.
In a new twist, Debtors had to take an oath of allegiance to the United States (this was just after the Civil War).
This law made it a bit longer, lasting 11 years and was finally repealed because too many debtors were using it and creditors were getting little in return.
(You thought creditors having sway with Congress is something new, eh?)

The next attempt was the Bankruptcy Act of 1898.
This law allowed both voluntary and involuntary cases, permitted debtors to claim exemptions and removed most barriers for discharging virtually all debts.
During the 1920s, the act was amended to add grounds for denial of discharge and debts excepted from the discharge.
This law, unlike the attempts before it, remained in effect for 40 years.

In 1938, Congress overhauled every part of American bankruptcy law.
Although most changes affected business bankruptcies, this law also created Chapter 13, the wage earners' repayment plan.

Bankruptcy law remained essentially unchanged until the Bankruptcy Act of 1978, and amended again in 1984 to add several new categories of nondischargeable debts.
A sweeping overhaul of the laws were inplemented in 2005, marking the most substantial changes since the 1938 overhaul.



--------------------------------------

Ok, now you have the history of BK laws in America as pieced together from various sources, lol. Hopefully you made it through without major fatigue setting in.

Bankruptcy is NOT a constitutional "right". Neither is easy access to student loan money.
Be careful what you wish for as the law of unintended consequences never rests.
Too many Sl losses may make the program just plain unavailable to those who need it most.

Student loans are unlike any other debt (with the possible exception of tax debts) in that the money was essentially borrowed not from banks who accept the risks before making loans- but from other Americans.
The standard for discharge of Government debts is higher because of the origin of the money involved.
It's not venture capital, it's a chunk of the paycheck of every employed American.
Even so, in true hardship cases, the loans can still be forgiven, settled or discharged.
The real question here is whether the standard for "hardship" is too high. And in some areas I agree that the law has been intrepreted in a very narrow fashion.

You are correct in that another part of the reason the standard is so high is the abuse that occurred in the past.
It's not the Fed's that "ruined" it for us, it's former borrowers who had the means to repay- but knew the loopholes and just didn't.
I think you'll find very little sympathy among the general public for easier SL discharge laws.
Far too many still have bitter tastes in their mouthes from the Doctors and Lawyers who discharged their student loans and went on to earn six-figure salaries.

radi8 you have reaffirmed your position in my heart as a true hero!

THANK YOU RADI8!! You wrapped in up in a perfect package!!!!!!

[quote name='radi8' date='Jan 13 2006, 03:46 PM' post='1222204']
[quote name='Pauper' post='1222051' date='Jan 13 2006, 03:03 PM']
<SNIP> it's former borrowers who had the means to repay- but knew the loopholes and just didn't.
I think you'll find very little sympathy among the general public for easier SL discharge laws.
Far too many still have bitter tastes in their mouthes from the Doctors and Lawyers who discharged their student loans and went on to earn six-figure salaries.
[/quote]

That's so true! I am a lawyer (who is making CONSIDERABLY less than six figures!! ) and I graduated not too long after the BK ability went away for SLs. While I was in law school everyone was talking about how it was so sad that they could no longer just BK right after school and be done with their loans -- and these were usually the people going on to work for huge law firms making the six figures RIGHT out of law school, not us poor (literally!) public service shlubs!! They all knew about it and I don't doubt that a good percentage of them would have done it in a minute if they could have. I'll be the first to admit that I screwed up good with my loans, but I really did always know that I'd have to pay them back (and I am now! )!

Public Service shlubs have something money can't buy.
Respect.

And the ability to leave after many years, only to talk about those public service schlubs

You couldn't pay me enough to make it worth going back to the public sector...

There are lots leaving -- probably for the exact reasons you did, centex!! I'm one of the crazy ones who went into private industry for a couple of years and came back!!

Somebody has to do it.

I completely agree...I personally don't think state/federally funded student loans should be able to be discharged no matter the circumstance SOLELY as long as you qualify for BK...It may be a harsh opinion....but it is what it is...

And yes ALL my SL's are the federal stafford loans.

I just LOVE radi8!

yes I do.

Pauper,

I would love to see the StudentloanSLAVE site have more dialogue. I wish you would post your thoughts
and opinions there instead of here regarding law changes for student loans. Lets get that site growing!
I believe this site is strictly to help people pay off student loans. I am hoping that the StudentLoanSLAVE
site will become just as popular as this one. Please take your energy and stir up some things there
where you are needed.

SLAVE

Just to clarify- In 99.5% of the cases that is the only option under current law.

Our mission is to help people better their situation and their lives as quickly as possible. That means using the existing laws, and enforcing what exists right now when collectors play out of bounds.

It's not that discussions about changing the laws aren't welcome here- they are. However providing advice that will work for the consumer-now-today- under the laws we have to deal with today, will remain our primary goal.

We don't often suggest BK'ing student loans to people unless it appears that they meet the very limited criteria where such an approach would be successful. It's not a matter of siding with the feds or having a collector mentality as suggested previously.
It's simply a matter of suggesting things that will work- today- and for most people under today's laws, that just isn't a possibility.
If you want to discuss the fairness or unfairness of it- that's fine. You'll find folk on both sides of that discussion, I'm certain.
But in the meantime, please don't confuse our focus on immediate options as anything other than what it is.

The reason Breezie posted the links to the related forums is so that those interested in working in that direction, changing the laws that apply, can join in where such discussion is already in progress should they care to do so.

I believe this site is strictly to help people pay off student loans.
[/quote]


This site provides a wealth of info and I'm grateful, but why all the judgments on posters only on the student loan forum?? I'm not suggesting that anyone take out student loans and then bankrupt them, the reality is almost no one can today. However, people on other forums on Creditboards discuss bankrupting their debt everyday and no one jumps down their throats like they do in the student loan forum. Most of these people on the other forums aren't dying of Aids or cancer, most simply lost a job, unplanned baby, etc. I saw one person planning to file BK to then be able to save money for a few months to have 10% down for a house. I also see people on the BK forum who earn well over $120k a year who are trying to figure a way to file Chapter 7 and eliminate all their debt, and it's not b/c of huge medical costs. People actually respond to the poster and give ideas as to whether they think it will work or not.

I don't think most people entered graduate school in the 90's to declare BK with respect to their education debt...I think most graduated into a bad job market and were drowning in debt. I don't hear of 70's grads or early 80's grads who BK'd their student loans. I think mostly b/c tuition was reasonable and they were rewarded by higher salaries for having an education. Frequently on this forum, Lynn mentions that she used to make a fabulous salary in collections years and years ago, but that she left b/c they changed the pay and now collectors are paid as entry-level workers. Well, the collection industry is not the only example where workers were paid better salaries years ago. Every night on cable news programs I see someone profiled who was earning $60k or more in the 60's, 70's and 80's with no college degree. Senior pilots earned 300k a year and retired with 100k a year pensions. Most of the people I know today with grad degrees can't earn 100k a year in salary.

There are people on this site who are drowning and are stressed. Not b/c they can't take that expensive trip to Europe that I keep hearing about, but b/c they can't pay living expenses and student loan debt and keep their head above water. They anticipated when they were in school that they would find decent/steady employment that would allow them to manage.

Why can't we stop with the judgments on this board and maybe encourage some discussion that Congress and their actions are out of touch with what borrowers are experiencing currently. I think there's a huge disconnect with respect to how much higher education costs and what the majority of Americans think it costs. When the Bill O'Reilly situation with his coworker went public, I noticed that so many people were shocked that this woman had $90k in debt, most of it graduate student loan debt. I don't think people realize the amount of debt people are graduating with and what happens to them financially in a few short years.

Too many people are under the impression that student loan repayments are maybe $45-75 each month, b/c that's what they were in 70's and 80's. We need some reform in the repayment options that student loan borrowers have, particularly for those who have large loan amounts (like maybe longer deferments or longer I/O options, some debt forgiveness after on-time payments ).

Sorry for the rambing.

flcleo ...

First of all, I don't see what's going on here as judgment of a person's position. There are laws and precedent that have been set when it comes to student loans, and CreditBoard's position is that we work within those laws and precedents to help people combat an already stressful situation. The fact of the matter is, there is almost NO WAY to bankrupt student loans. Those of you who think there are, are living in a dream world. I'm sorry that sounds so harsh, but it is true. There are NO cases that I am aware of that bankruptcy of student loans was allowed strictly contingent on a person's ability to pay. There has always been mitigating circumstances, as in the case of Reynolds, where there was overwhelming evidence of mental illness.

It's true that Lynn did work in the collections industry in the student loan sector; it is not true, to my understanding, that she left because of a change in salary structure. Lynn had a medical condition (and I feel like I can say this because it's been mentioned publicly before) that forced her to leave the industry at what was probably the pinnacle of her career. If you do a search, you will find that this unexpected medical condition forced her to file bankruptcy as well.

And ONE MORE TIME, I will reiterate that there will be NO POLITICS DISCUSSED in regard to the student loan situation on this forum. I have invited several of you in the past to take this portion of the discussion to politicsfirst.com. If that request is not headed in the future, I will start handing out warnings and time outs. This is not open for discussion, debate or otherwise. Period. The end.

I don't like having to play the "tough guy" on this forum, but either this line of discussion is moved to politics first or I'm going to close this and any other thread that starts to go even slightly political. You've all been asked nicely to play by the rules, and if you're not willing to do so, then I will be more than happy to exercise "the heavy hand."

If you want to become activists, I suggest you check out the slave site; we're not going to go there here.

Thanks for understanding.


ETA: This site IS to help people pay off their student loans and how to deal with collectors. That is all this forum was set up to do. Let's remember that in the future, shall we?

As I've said before, in other posts, if you don't want this kind of advice, and prefer to take an activist position, please visit http://www.studentloanslave.org

We do not offer that kind of advice, we aren't interested in offering it, and judgmentalism has nothing to do with it. It's just not our purpose here. We are happy to refer you to sites that are set up for that purpose. Continuing the argument is not going to change what we do here. From now on, if I see threads of this nature, I will just give out the link to the slave site and close the thread, because the subject is not up for discussion.