Student loans are patently dishonest. Why? Because they can not be extinguished in bankruptcy.
Do you think they should be included if you claim bankruptcy?
true statement...if you do not pay it back the dept of ed will look at options which include garnishing wages....liens on home...they will not sue you if they deem that you do not have the means to pay back the debt due to low income unemployed etc but they will not write the debt off it will always be there....i have researched this for a friend that had a 2500.00 loan that was paid off by her....this was 15 years ago...well they claim it is still outstanding and she can not prove where she paid it off due to a bad divorce and no papers....they now are trying to collect over 6000.00 from her....
They shouldn’t be dichargeable, at least not under most conditions. You used the loan to get an education, and you still have that education (and presumably a correspondingly increased earning potential) after bankruptcy.
Further, if they were dischargeable people would just have all the more incentive to get expensive educations and then declare bankruptcy when their liberal arts degrees proved worthless in the marketplace. Overall it would make student loans far more expensive and difficult to obtain for people who are actually good candidates for them.
There’s a reason the student loans cannot be extinguished in bankruptcy. You see, a whole lot of students decided that the first move after graduation was to make a beeline to the bankruptcy court to get debt forgiveness. After all, their debt-to-current income ratio qualified. So you have lawyers, doctors, and others who had a pretty secure future income stream expectation nevertheless qualifying technically in bankruptcy to shaft the taxpayers for their professional education and start their professional lives debt-free. Unfortunately a lot of laws which we deem unfair came about because of abuses by others.