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undue hardship

Discussion in 'Business & Tax Advice' started by supervortex, Apr 2, 2011.

  1. supervortex

    supervortex Junior Member

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    I find myself with a ridiculous amount of debt. Does anyone know what exactly is "undue hardship" with regard to bankruptcy law in the US, especially with regard to student loans? I know that student loans are not typically discharged unless there is "undue hardship". I owe more than $250,000 just in student loans. With the rate of interest around 10 to 12% I cant possibly work enough years to pay that off. Any thoughts on this?
     
  2. confined

    confined Regular Member

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    1. ask your parents

    2. get an intern job with the shit you're supposed to be learning in school.

    3. quit school and do IM full time

    0. would be don't get a quarter million dollars in loans and then go on bhw. go the IM route first.
     
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  3. RW012

    RW012 Newbie

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    Is there a way to settle those loans? Might be a better option than bankruptcy.
     
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  4. sfidirectory

    sfidirectory Senior Member

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    Maybe you should have moved to a country that offers interest free student loans? Where I come from the student loans are interest free (the money being loaned from the government) and you only pay that back once you earn over a certain income thresh-hold (before tax). Fees to go to uni in the US seem so expensive it seems to put peoples' rights to an education off limits. Last year my total fees for the year only cost NZD$6k, and this year about NZD$7k, so for a 3 year undergrad degree I would only be loaning about NZD$22K (and I get payments for living expenses which I don't have to pay back). My university is within the top 200 in the world so it's not like we're "cheap". I also see so many American students in my course and the ones I have managed to talk to all say the fees cost too much over in the US.

    I know all that won't help you, but by the sounds of it bankruptcy looks like an appropriate way out (if you can prove that you have tried so hard and have been making an effort to pay debts back). $250k is extortionate for education fees, if you havn't completed your degree etc you should come down here and finish it off, while you get some work to pay off the debts etc. I am not sure in American law if you're able to go overseas if you file for bankruptcy, I know in my country if you file for bankruptcy you have to notify lawyers etc with a thoroughly detailed explanation and they have to give you the ok. I fell ill in 2007 and had a lot of debt and when a new law came in at the end of the year (a less harsher form of bankruptcy) I filed an application under that. I feel guilty for that and if I ever win lotto I'd pay them all back (because it would be the moral thing to do).
     
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  5. supervortex

    supervortex Junior Member

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    Thanks, all good thoughts. I'm already graduated and working, but in retrospect I had not planned well. Now that I'm doing the math, I cant possibly pay back the student loans even before I retire. Not to mention, those ppl are vicious on the telephone. The interest rates on the loans make repayment difficult, if not prohibitive. Even if I was able to make the monthy payment, they want nearly $5000 per month.
     
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    Last edited: Apr 3, 2011
  6. supervortex

    supervortex Junior Member

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    I've always believed the european educational system is structured better. The companies that offer the funding in the US are often the same or just as bad as the credit card companies. It does not take long to find yourself standing in a deep hole. I just have to get a better handle on how they quantify undue hardship. To me, the numbers seem to point that direction.
     
  7. supervortex

    supervortex Junior Member

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    Even student loans can be settled, but they have to be at a point where they are so delinquent that they have been charged off, or written off so to speak, by the lender. Admittedly, I had borrowed way too much. But now I have to assess the options.
     
  8. thetvnun

    thetvnun Power Member

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    undue hardship would be circumstances entirely out of your control, not financial insolvency. you can b.k. a lot of debt but not student loans, you would need a health crisis. i would say dont pay. i had 700k in debt and paid for years and stressed and aged and borrowed from family and couldnt sleep, and after 4 years of that - i gave up. my only regret is that i wasted those 4 years.
     
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  9. richelld

    richelld Junior Member

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    lol you went to college, what a scam. you could have just read all the books on your own. you took out $250,000 in debt to feel less illiterate with a diploma you can wipe your ass with when hard times affords no toilet paper.

    just default; what are they going to do? excommunicate you? :cool:

    pope daniel accepts you baby
     
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    Last edited: Apr 22, 2011
  10. supervortex

    supervortex Junior Member

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    I'm certainly experiencing the lost sleep :( After giving up, did you take any measures to reestablish credit? I've heard that seem ppl try to reestablish credit as an LLC or other entity, so at least you can buy real estate or a car on credit.
     
  11. supervortex

    supervortex Junior Member

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    Thank you :D Now I have three diplomas hanging over this desk. I wonder if the student loan companies would like to have them?
     
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  12. fiesta

    fiesta Junior Member

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    $250,000 ? what did you do? go to medical school or harvard mba? if they approved you for that it must have been some lucrative field you were studying.

    as to the debt, did you consider moving to another country?
     
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  13. supervortex

    supervortex Junior Member

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    I studied anesthesia, but salaries are way down now compared to before. The student loan payments are killing me. Cant move out of the country, but moving to the northwest may help a bit on living costs in some areas.
     
  14. fiesta

    fiesta Junior Member

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    So are a you a Nurse anesthetists or an Anesthesiologist? The latter make average 1/2 Mil.

     
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  15. bushbabie21

    bushbabie21 Executive VIP Jr. VIP Premium Member

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    Dude, I'm in the same boat...I am in for about 150k and i have a degree in audio engineering (baiscally a useless skill with the advent of home-based technology) .

    Also a very interesting fact is taht you used to be able to get rid of student debt through bankruptcy but since bush was in office he passed a bill that protects student loans from being purged in bankruptcy...so in other words we would have been better off buying a ridiculous mansion that we coulnt afford then to take these outragious student debts.

    On a deeper note, in my opinion education is the "new business" of America I have read a few articles of the business side of the education industry. During these tough economic times, enrollment is higher than ever and al the private schools are making a lot lot lot of money off of students taht previously wouldnt have even been able to get into school. read some articles on the education industry...pretty fascinating.
     
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  16. supervortex

    supervortex Junior Member

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    Wish I was making that kind of money. I'm an anesthetist. Average is around 120 to 140K in most of the country, but the economy is starting to drag down salaries. I know it sounds like alot, but when you actually pay the taxes and crunch the numbers, the student loan companies still want a few thousand dollars per month out of me for the payment. I should have planned better.
     
  17. supervortex

    supervortex Junior Member

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    I had not realized that Bush had done that. I assumed things had always been that way. The student loan companies are practically on the same level now as the credit card companies. The credit card companies have been living fat on kids in college that could never possibly make the payments on all of the plastic. It takes real discipline to control spending at any point in life, but an 18 year old kid starting college. It all is a pretty sad state of affair.
     
  18. popcrdom29

    popcrdom29 Jr. VIP Jr. VIP Premium Member

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    supervortex sorry to hear about your student loan problems but it's nearly impossible to include them in bankruptcy here in the US. Think about it; if it was that easy then a lot of people would most certainly file for bankruptcy immediately after getting their degree then they wouldn't have to pay their student loans back.

    It seems that you're making good money at the moment so try not to live above your means, which is what a lot of people do. Get a cheap house or apartment, don't eat out too often and live within your budget. The government will get it's money back one way or another.

    Another thing to consider is to consult with a bankruptcy lawyer and/or a tax accountant. I'm sure you will get a lot better advice than here in this thread.

    Good luck.
     
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  19. supervortex

    supervortex Junior Member

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    I can see how things would get messy if everyone could just wash away their student loans, but I still wish there was some sort of safety net or parachute to pull. I'm starting to rework my budget to tighten things up. You mentioned that the government will get the money one way or another. One of the reps at AES was squeezing me hard on the phone the other day for money. The rep had the balls to even say, "You know, we are the government."
     
  20. andee

    andee Regular Member

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    move to australia, Anesthesiologists in private practise make like 900k a year, their dollar is worth more than yours at this point in time. Plus its a fantastic country.

    to be honest youre kinda ****ed. Compound interest is going to kill you. Im sure you can do the math your self but (assuming you dont make any repayments).....

    250k * .1 = 25k interest
    275k * .1 = 27.5k interest
    302.5k * .1 = 30.25k interest.
    332.75k

    and thats only 3 years.


    good luck.