4 ms·
If bankruptcy was possible, couldn't every student declare bankruptcy after graduation since that point they have nothing to lose?
by pkaye 4y ago
If bankruptcy was possible, couldn't every student declare bankruptcy after graduation since that point they have nothing to lose?
- deleted 4y ago[deleted]
- faeriechangling 4y agoIn the US context there are already provisions for this, abusive debtors can be forced from a schedule 7 to a schedule 13 bankruptcy, and in any case if the creditor protections aren't sufficient there are ways to bolster those protections without just allowing the creditors to have debt slaves. For instance, you can disallow discharging debts for a period of years after the education ends. The status quo is pretty corrupt.
- pkaye 4y agoI guess allowing bankruptcy after N years might make sense. By that time the bankruptcy judge gets a good idea on future income potential.
- dhosek 4y agoUnder bankruptcy, you don’t necessarily get everything wiped clean and a fresh start. A court will determine how much you can pay and to whom and assets will include a percentage of your future income. On top of that, your ability to get credit will be severely impacted for at least seven years meaning good luck getting a car loan at non-usurious rates, credit cards, etc. You may even find that getting something like a simple checking account becomes rather difficult (I had to sell my first house in a short sale in the 90s and even though the consequences were less dramatic than bankruptcy,¹ it still impacted my financial prospects for a long time afterwards). ⸻ 1. I went to a credit counseling agency in the midst of that financial distress and the counselors all insisted that I didn’t want to go through bankruptcy although in retrospect, that was exactly what I should have done. What I didn’t know then was that the credit counseling agencies are all run by the credit card companies.
- novaleaf 4y agoIt didn't happen that way when it was legal. Also, people tend to try to be honest and do the right thing.
- plorkyeran 4y agoDeclaring bankruptcy immediately after graduation was last legal in 1976, when private school tuition could be paid for with 20 hours/week of minimum wage labor. Even for an amoral profit optimizer, explicitly planning to have zero assets and maximum debt at graduation and immediately declaring bankruptcy was not yet a particularly compelling idea. I don't think it'd really be a thing today either, but the circumstances are clearly very different.
- cafard 4y agoPrivate school tuition at about $1600/year? Public university tuition was well under that, but my recollection is that private university tuition was about double that.
- codefreeordie 4y agoDespite this being true, it's probably bad in the long term to build a society where being honest and trying to do the right thing is a losing strategy.
- deleted 4y ago[deleted]