<p>I know that recently a law was passed to make it nearly impossible to discharge student loans through declaring bankruptcy. However, couldn't one technically take out a normal loan, pay off the student loan with the normal loan, and then just declare bankruptcy to discharge the normal loan? Or is there something I'm missing here?</p>
<p>Wonderful ethics</p>
<p>Assuming that if you're that close to bankruptcy you can get a loan for the amount needed.</p>
<p>But like Iron Maiden said: I'd have trouble sleeping at night.</p>
<p>There's almost always a loophole for everything....the real issue is: Can you live with yourself after squeezing through that loophole?</p>
<p>Yes, you are missing something. Debts incurred for the purpose of paying off a non-dischargeable debt are also non-dischargeable. In short, it won't work.</p>
<p>It might work if you waited a few years before declaring bankruptcy - I don't know how far back they examine you in a bankruptcy, and they may very well not go farther back than your last income tax return.</p>
<p>So you'd have to be plotting this way in advance? Purposely planning not to pay them back?</p>
<p>This line of thinking is not "new", our college freshman son said a couple of senior kids had expressed the same thoughts (regarding "discharging" their college debt). Trying to figure out how to game the system is as old as the hills.</p>
<p>I consider this to be very low ethically. Additionally, when they come to tow your car away or repossess everything you have, you won't be so happy. Finally, for seven years afterwards (correct me if I am wrong, lawyers out there) you will have a hard time getting credit, buying a house, etc. Don't be a slug. Don't take someone's money with no intent to repay. Fraud is a criminal offense, too.</p>
<p>as already stated, it won't work. The Bankruptcy court judge would almost certainly question what the loan was for and deny the discharge. In 2005 Bankruptcy laws were overhauled and these actions are considered abuse and dealt with accordingly (ie the loan stays)</p>
<p>Not terribly surprised at this thread, given the OP also started the "Are My Parents Shafting Me" thread.</p>
<p>OP, I have a few questions for you....</p>
<p>When did you start working for wages, and how much have you saved for your college education? </p>
<p>How many hours do you anticipate working during college sessions, and do you expect and plan to work at least full-time during the summers? </p>
<p>When did you start applying for outside (not institutional) scholarships, and how many have you applied for?</p>
<p>I probably should not be assuming that you have not done everything in your power to take on as much of the financial responsibility for your education that you could/can, but that's exactly what I've assumed. I hope I'm wrong.</p>
<p>How are you going to get an unsecured loan. Lenders just don't lend unsecured money - unless it is credit cards, lol.
If you graduate $30,000 in debt, or even $20,000 in debt then how are you going to get that much in credit?</p>
<p>If anyone can find a sucker to lend them unsecured money to pay off an educational loan - please let me know! LOL
This post shows a complete disconnect in money management and the realities of borrowing money.</p>
<p>I think it points out how desperate folks have become</p>
<p>FinAid</a> | Loans | Loan Forgiveness</p>
<p>there are ways to get loan forgiveness. But you have to work in certain fields, etc..</p>
<p>I agree, speedo ^^^</p>
<p>Bankruptcy is losing its stigma in the process of this desperation, and presenting itself as a viable alternative, where people are as uninformed of its consequences as they were about the debt they took on in the first place. </p>
<p>You can't give the college degree back to the bank, like you can the keys to a house. The banks will find a way to garnish the wages of the future earnings they allowed you to make. Of course there will always be people in the face of their impossible debt load who borrow on the house and choose to give back the keys instead - at least as long as banks continue to dole out equity lines of credit, probably increasingly rare.</p>
<p>Not an ethical thing to do, but it's not like there's any ethics involved in the current problems in the SL industry. So in no way would I personally approve of the tactic Igeller recommends, but given the moral aspects of predatory lending, it won't be too unlikely that others have already thought of like schemes. Although even posting such a scheme on the internet might take a sublime idiocy award. </p>
<p>As speedo notes, schemes like the one which started this thread are indicative of how desperate, and fearful people have become as a result of the SL situation. As I've noted in other postings, the level of fear resultant from the SL industries control of education financing...is so marked in students, families and within academia that excessive actions are likely. And these are socially much more troublesome than Igellers little delusion. Worse has already occurred insofar as people dropping out of society, suicides and etc. Fear, and especially the form of fear provoked by the abuse of financial power, inherently produces over reaction. </p>
<p>Problem is from a moral point of view, what Igeller advocates is no less morally bankrupt than many of the common practices for the SL industry. The scheme proposed by Igeller is impossible, stupid and unworkable. The schemes concocted by the SL industry are unethical, predatory and socially destructive...but are so enmeshed with the system that many no longer know how appalling the ethics actually are...so any morality in this scenario is long gone anyway. </p>
<p>Plus when an industry becomes so powerful, morally bankrupt, and predatory that suicides have resulted, billions have been effectively stolen, and a large part of a generation has become in effect bond servants...is there a point when discussion of individual ethics actually still matter?</p>
<p>^^^^ Exactly!</p>
<p>^^Guys, assuming that we put ethics aside (which I am in no way recommending), what the OP is suggesting is just plain wrong, constitutes fraud, is prohibited by the Bankruptcy Code, AND it won't work. OP, bankruptcy is federal law, the documents that you are required to provide and the testimony that you are required to give in a bankruptcy case are sworn under oath and subject to a penalty for perjury and the U.S. Attorney prosecutes bankruptcy fraud. The penalties are severe and include very large fines and jail time. In short, don't be an idiot. Enough said.</p>
<p>
[quote]
The scheme proposed by Igeller is impossible, stupid and unworkable.
[/quote]
- Atana</p>
<p>Gbesq - there's no disagreement there. That you feel enough is said as it relates only to the OP, is to fail to see the flaws and injustice of the entire system, or to even deny that it warrants examination.</p>
<p>^Although I appreciate your point, I don't see a great deal that's flawed or unjust about a system which extends federally insured student loans to borrowers to help them better themselves educationally. Keep in mind that federal students loans (not PLUS loans) are given WITHOUT creditworthiness being a criterion, the interest rates are subsidized, repayment plans are liberal, in many cases the government pays the interest while the student is in school, and the loans can often be consolidated and reconsolidated at lower interest rates. Try that in the private loan market and I think my point becomes clear. It took me 17 years to pay off my law school loans and never once did it occur to me that it was somehow unfair for the government to expect me to repay what I had borrowed. Indeed, I was grateful that the loans were available when I needed them. What I do find to be flawed and unjust is someone who wants to game the system and avoid repaying that benefit.</p>