Bill to make Private Loans Dischargeable
#1
Gets Weekends Off
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Joined APC: Sep 2006
Posts: 787
Bill to make Private Loans Dischargeable
Click here to email your Senator or Reps to support this--if ya want to!!!:
Borrowers with Private Student Loans Could Get Bankruptcy Relief
Hearing Today on New Legislation to Address the Issue
“We strongly support new efforts on Capitol Hill to treat private student loan borrowers more
fairly in bankruptcy. Private student loans are not discharged even when borrowers meet the
strict criteria for bankruptcy, while lenders who knowingly make unaffordable loans can simply
write off the debt. Last week bills were introduced in the Senate (S. 3219) and House (H.R.
5043) to treat private student loans like credit cards and other similar consumer debt, rather than
like criminal fines and unpaid child support.
“Today the House Judiciary Subcommittee on Commercial and Administrative Law, chaired by
Rep. Cohen, holds a hearing on H.R. 5043, the Private Student Loan Bankruptcy Fairness Act of
2010 sponsored by Subcommittee Chairman Steve Cohen and Representative Danny Davis. This
bill is supported by a broad coalition of groups representing students, consumers, and colleges,
as well as civil rights and public policy organizations.
“Private student loans are not guaranteed or subsidized by the government in any way, and they
are one of the riskiest, most expensive ways to pay for college. Like credit cards, these loans
typically have variable interest rates that are higher for those who can least afford them. They
also lack the important consumer protections and flexible repayment options of federal student
loans. Yet, under current law, private student loans are treated much more harshly in bankruptcy
than credit cards and other similar consumer debt.
“Struggling borrowers have virtually no way to make private loan debt more manageable
because lenders can simply refuse to negotiate affordable terms. People who borrowed for
college and played by the rules deserve basic consumer protections and fair treatment when they
hit hard times.”
Borrowers with Private Student Loans Could Get Bankruptcy Relief
Hearing Today on New Legislation to Address the Issue
“We strongly support new efforts on Capitol Hill to treat private student loan borrowers more
fairly in bankruptcy. Private student loans are not discharged even when borrowers meet the
strict criteria for bankruptcy, while lenders who knowingly make unaffordable loans can simply
write off the debt. Last week bills were introduced in the Senate (S. 3219) and House (H.R.
5043) to treat private student loans like credit cards and other similar consumer debt, rather than
like criminal fines and unpaid child support.
“Today the House Judiciary Subcommittee on Commercial and Administrative Law, chaired by
Rep. Cohen, holds a hearing on H.R. 5043, the Private Student Loan Bankruptcy Fairness Act of
2010 sponsored by Subcommittee Chairman Steve Cohen and Representative Danny Davis. This
bill is supported by a broad coalition of groups representing students, consumers, and colleges,
as well as civil rights and public policy organizations.
“Private student loans are not guaranteed or subsidized by the government in any way, and they
are one of the riskiest, most expensive ways to pay for college. Like credit cards, these loans
typically have variable interest rates that are higher for those who can least afford them. They
also lack the important consumer protections and flexible repayment options of federal student
loans. Yet, under current law, private student loans are treated much more harshly in bankruptcy
than credit cards and other similar consumer debt.
“Struggling borrowers have virtually no way to make private loan debt more manageable
because lenders can simply refuse to negotiate affordable terms. People who borrowed for
college and played by the rules deserve basic consumer protections and fair treatment when they
hit hard times.”
#2
May be counterproductive. If this passes banks would have to increase rates on all new loans to counteract the higher number of defaults. Now you have a kid with a $100,000 loan at 12% and making $20,000 a year. Does not take a genius to see that will result in more BK filings and the downward spiral continues
#3
May be counterproductive. If this passes banks would have to increase rates on all new loans to counteract the higher number of defaults. Now you have a kid with a $100,000 loan at 12% and making $20,000 a year. Does not take a genius to see that will result in more BK filings and the downward spiral continues
#5
Otherwise many college grads would simply find themselves "unemployed" after graduation, file bankruptcy, discharge their college debt, and then move on with life. There would be ramifications for seven years, but maybe not as rough as $1200/month student loan payments for thirty years.
If people are allowed to do this, students won't be able to get loans at all. Banks will have to look at the hard facts of their current income and finances.
Would a bank issue a home loan to someone with ZERO collateral who's financial plan consisted of being unemployed for 4 years (or holding part-time minimum wage jobs), followed by an attempt to break into a career for which the person had no proven ability, training, credentials, or experience. Hello no, they want to see a proven track record in the industry, proof of income, and at least a year or two with the current employer. At least with a home loan the bank can repossess the damn thing.
#6
Gets Weekends Off
Joined APC: Jan 2007
Position: CRJ
Posts: 2,356
exactly. this is the most riduculous thing yet. If you took a loan you cant afford thats tough. Make the payments and be responsible for your actions. I am getting tired of the "its not my fault" attitude that is prevailing. And if you know anything about Steve Cohen (memphis) then you know ANY idea he has is not good for working people.
#7
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Joined APC: Jul 2007
Posts: 3,580
They should be dischargeable, and no... you shouldn't be able to just discharge your student loans that easily. You should have to work through the lender and exhaust literally every forbearance/deferment option before being allowed to bankrupt them. You can postpone payments for years through forbearance.
But if someone takes such a drastic step to file bankruptcy, and the purpose of bankruptcy being to give someone a fresh start, then keeping someone on the hook for student loans goes against the spirit of giving someone a fresh start, doesn't it?
But if someone takes such a drastic step to file bankruptcy, and the purpose of bankruptcy being to give someone a fresh start, then keeping someone on the hook for student loans goes against the spirit of giving someone a fresh start, doesn't it?
#9
Gets Weekends Off
Joined APC: Jan 2007
Position: CRJ
Posts: 2,356
They should be dischargeable, and no... you shouldn't be able to just discharge your student loans that easily. You should have to work through the lender and exhaust literally every forbearance/deferment option before being allowed to bankrupt them. You can postpone payments for years through forbearance.
But if someone takes such a drastic step to file bankruptcy, and the purpose of bankruptcy being to give someone a fresh start, then keeping someone on the hook for student loans goes against the spirit of giving someone a fresh start, doesn't it?
But if someone takes such a drastic step to file bankruptcy, and the purpose of bankruptcy being to give someone a fresh start, then keeping someone on the hook for student loans goes against the spirit of giving someone a fresh start, doesn't it?
#10
What normally happens is you know you are going to lose your house so you take out a another mortgage based on the value of the home so you can pay off your other debts so you don't lose your car or your possessions. You are going to lose the house anyway so you end up keeping your car and paying off the credit cards.
The last two appraisals that I did were forensic reviews of appraisers who valued garages that weren't built but the money from the loan was going to build said garages. The garages were never built and only weeks after the loan was approved the homes went into foreclosure
The last two appraisals that I did were forensic reviews of appraisers who valued garages that weren't built but the money from the loan was going to build said garages. The garages were never built and only weeks after the loan was approved the homes went into foreclosure
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