Question:

Bankruptcy after graduating with overbearing college loan debt?

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Here's the deal.. I know I'm going to graduate with loans that I will be paying off well past retirement. There are a lot of things I want to do in my life and paying for the overpriced cost of my education will no doubt keep a tether on many aspirations. Supposedly, the only conditions that will allow repayment to be terminated are either death or bankruptcy. What's to keep me from filing for bankruptcy? Are there qualifications to be met? Why is it not a common thing? My dad filed for bankruptcy and he was back on his feet in less than a year. Do the negatives outweigh the positives? If not, how can I fake my own death? (just kidding about the last question)

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  1. I filed 7 years ago. I bounced back, yes. But with extremely high interest rates on everything for a long time. We're talking like upwards of 28% on a credit card. That really sucks! Not to mention going under the microscope for a home loan, god what a nightmare. I cleared all my debt except my student loans. Most of these loans you get for school are secured from the government, and cannot be forgiven. Look into it, you may be stuck paying for it like the rest of us. But things like cars, houses, medical bills, credit cards, yeah...you can be forgiven for those. Each state is different and the laws for bankruptcy have changed so much in the last 7 years. Good luck. Student loans usually have a low interest rate. If you get in a financial bind, ask the loan company to grant you a forbearance for a year. It gives you extra time to get your finances in order, if you qualify for it. I have qualified for it several times since 1995 when I graduated. Good luck, I feel your pain!


  2. It's not a common thing because most people are responsible and want to make a sincere effort to pay down their debt.  And who wants to start their professional career with a bankrupsy?  It would prevent you from reaching your asperations, just like debt would.  You'd have trouble renting an apartment, buying a house, and it might even cost you a job- some places do credit checks before they hire people.

  3. Many Bankruptcy laws require you to pay back your debt even though you declare bankruptcy. I strongly advise you go talk to a professional debt councilor.

  4. Bankrupcy generally doesn't discharge student loans.  The law was written that way to prevent just the kind of thing you are wanting to do.  Don't be such a deadbeat.  Why should I, and the other taxpayers, pay for your schooling?  If it was overpriced - well, you chose the school.

    And yes, negatives of bankrupcy can be huge.  And besides, laws have changed, mainly due to abuse of the bankrupcy system, so filing bankrupcy doesn't necessarily mean any more that you get out of paying what you owe, often it's just stretched out so you have more time to pay..

  5. It’s better to come across away to pay back, think about the time you were applying or the time  they were paying for you; it doesn’t mean after graduation you don’t have to pay your loan, loan means credit. Bankruptcy is the last thing you really want to do.

    Good Luck!!!

  6. dumbest solution EVER

  7. I think you’re mistaken. I’ve always heard that student loans are one type of debt that CANNOT be forgiven via bankruptcy. You might want to research that a bit more.

    Is that “overpriced education” going to help you with those life goals? If so, don’t you feel just a little bit guilty profiting from it without paying for it?

    *Edit: Here's one of the many webpages on the subject.

    Can I discharge my student loans in bankruptcy?  

    Student loans are no longer dischargeable in any chapter of bankruptcy unless you can prove that repaying the loan creates an undue hardship on you or your family.   Prior law allowed their discharge once they had been in pay status for 7 years.  The law changed in the fall of 1998.

    Proving hardship usually requires showing that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the loan.  Some courts will discharge part of the loan on a showing that repaying it all would be a hardship.

    Student loans are sometimes unenforceable due to school closures, fraud, etc.  Chapter 13 can provide a way to cure defaults on student loans, or to pay them off over the course of the plan.

  8. You can't just go out and claim bankruptcy cause you feel that you can't pay for something, but rather have to show a history of how you tried to pay and couldn't.  You can refinance your loans for lower rates, or honestly, just pay them.  The monthly payments may not be as expensive as you think.  I don't know what else to say other than just pay the stupid loans.  You'll be making more money with the college education then you would have without so even with paying those loans off you are in a better financial position then you would have been without the schooling, just look at it that way.

  9. A degree in what? If  it's one of Liberal Arts things, then go ahead and go bankrupt (even that of course is not free and will cost you a few bucks). But if your degree is something worthwhile (engineering or whatever), something with promise of excellent paychecks at the end, then pay your bills the regular way

  10. Bankruptcy will not take out your college loan debt. Just make more money.

  11. With student loans, they cannot be put on bankruptcy.

    Bankruptcy laws have changed this year and now when you file you have to repay everything anyway.

    You couldn't have escaped the student loans either way. You won't be able to get a job anyway with a bankruptcy on your credit.

    Things aren't like they used to be, and bankruptcy is no longer a help all escape. now it is a burden.

  12. Never go to college

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