bankruptcy

[fascination]

Originally Posted by Kevin

I'd also check out the Dave Ramsey route--a bit simplistic, but it works for a lot of folks.

He gives good common sense advice, has a step-by-step plan, and encourages people to negotiate with creditors to settle bad debts for less than owed -- but ONLY IF you honestly can't pay what you owe. He never wants you to file bankruptcy unless yu are absolutely forced to do so, like if someone sued you and has attached your wages so badly that you can't buy bread. Dave hates debt, and he especially hates student loan debt.

FYI, some guy called in to his radio show the other day and said his wife has $160,000 in student load debt. He wanted to know how they can ever pay it back? Dave said, "Whoa! Who's the doctor?" The guy said it's all his new wife's debt -- $145,000 for a four-year journalism degree, but then she decided that she wanted to cut hair instead, so she went back to cosmetology school with $15,000 more student loan debt. I think he said they make about $60,000 between the two of them. The debt is government guaranteed, so I guess we taxpayers will eventually pay it back to the lender. Ridiculous.

[amanda6035]

co-sign the Dave Ramsey thing. We've been following his plan for 3 1/2 years and we recently took over teaching the FPU class at my church from the couple who was teaching it before.

I wish bankruptcy wasn't an option... too many people abuse it and don't learn their lesson. Even if you get a ton of medical debt for whatever reason, there are ways to talk to the hospitals and doctors to negotiate a way to get some of the balances waived, and a payment plan for the rest. Dave has described how to do this on his show many times.

[DeltaBetaBaby]

Originally Posted by amanda6035

I wish bankruptcy wasn't an option... too many people abuse it and don't learn their lesson.

Please cite your sources.

Most bankruptcies are medical, and people can not simply "negotiate debts away", as you seem to think. If they *DO* negotiate, it's because the creditor would rather get part of the repayment, rather than getting nothing if the debtor went into bankruptcy. If bankruptcy no longer existed, the debtor's ability to negotiate would all but disappear.

[Kevin]

Originally Posted by amanda6035

I wish bankruptcy wasn't an option... too many people abuse it and don't learn their lesson. Even if you get a ton of medical debt for whatever reason, there are ways to talk to the hospitals and doctors to negotiate a way to get some of the balances waived, and a payment plan for the rest. Dave has described how to do this on his show many times.

So what would you suggest instead for someone who with a high school degree who gets hit with a six-figure medical bill for something totally out of their control? Debtor's prison?

[DeltaBetaBaby]

Originally Posted by Kevin

So what would you suggest instead for someone who with a high school degree who gets hit with a six-figure medical bill for something totally out of their control? Debtor's prison?

Didn't Romney answer this for us? Borrow money from your parents.

[amanda6035]

Psh, please, do you feel big and bad now? "Shame on you because you have no compassion for people who might just have a case of bad luck."

The fact of the matter is, bankruptcy IS an option, so me voicing my wish that it wasn't isn't going to change anything. So I don't know why you're so offended, it's not like my wish is going to magically come true. (HPRL anyone?) So there ya go, knock yourself out walking in front of a bus and rack up medical debt for all I care. If you can't afford it, good for you, you have options to get your slate wiped clean.

Here's your cited source you asked for. This is just one example of stupidity.

BTW - I love how you people like to insinuate that I said something I didn't. I didnt say there shouldn't be help for people who legitimately need it. However - people abuse bankruptcy, and I think there should be stricter rules about who qualifies, for why, and how. The abusers rack up debt they don't intend to pay, and then play the "woe is me" card, and get it forgiven.

There's a difference in people like the dumb girl in the article I referenced, and people who end up with medical debt they had no control over.


*DBB - Well, I guess you're right. Let's keep bankrupcty around so that there is negotiating power. Oh but wait. If bankruptcy wasn't an option, how would those companies get paid? wage garnishments? Last time I checked, they can only do so much. And you can't put the person in "debtors prison" because the person wouldnt be making any money or have the ability to pay back the debt. So what do you suggest?

Medical debt is ridonkulous anyway. If they have the ability to negotiate and forgive as much as they do, then maybe they should lower the prices in the first place. It shouldn't cost $700 for an asprin while in the hospital.

[Munchkin03]

From many of your previous posts, it seems that you made financial decisions that you regret, namely in the form of taking out student loans. While some people do end up taking out far more than they should, the vast majority do not regret their loans and, like Kevin, consider it an investment in their futures.

Just because Dave Ramsey thinks student loans are a "stupid tax" doesn't mean it's true for everyone. Perhaps you took out too much, or perhaps your program wasn't appropriate for such an investment. I took out a nominal amount for graduate school and the payments are a drop in the bucket for me. Due to my income, I no longer qualify for any of the interest rate deductions. The increase in my monthly salary due to having a master's degree from one of the top architecture schools in the world is exponentially higher than my piddly monthly payments. Is that a stupid tax? Hardly!

That said, I don't think they should be discharged in bankruptcy either, unless you're incapacitated and can no longer work (but in most cases, they'd be discharged before you got to that point). Education isn't like a car or a house that can be repossessed.

[amanda6035]

Originally Posted by Munchkin03

From many of your previous posts, it seems that you made financial decisions that you regret, namely in the form of taking out student loans. While some people do end up taking out far more than they should, the vast majority do not regret their loans and, like Kevin, consider it an investment in their futures.

Just because Dave Ramsey thinks student loans are a "stupid tax" doesn't mean it's true for everyone. Perhaps you took out too much, or perhaps your program wasn't appropriate for such an investment. I took out a nominal amount for graduate school and the payments are a drop in the bucket for me. Due to my income, I no longer qualify for any of the interest rate deductions. The increase in my monthly salary due to having a master's degree from one of the top architecture schools in the world is exponentially higher than my piddly monthly payments. Is that a stupid tax? Hardly!

That said, I don't think they should be discharged in bankruptcy either, unless you're incapacitated and can no longer work (but in most cases, they'd be discharged before you got to that point). Education isn't like a car or a house that can be repossessed.

*sigh* Really? This again? Are you still that upset that we disagree about this? Student loans are a stupid tax. They are not an investment. Investments earn you money. Student loans cost you money. You can get a college education without taking out loans. And no, taking out loans so you can learn a skill or gain knowledge to help you "get a better job" is not an investment. Going to school is an investment. Paying for school with debt is not an investment.

It's no secret that I deeply regret my student loans. But I don't have any desire to have them hang around around for 20 years by paying the bare minimum so that I don't have to be responsible for them anymore. Sorry, I have a life to live. And that means livinging extremely frugally right now so I can throw any extra money I have at them to get them out of my life. They are an inconvenience, and I'm taking full responsibility for them. My point in the previous thread is that for young students out there who are worried about their options, there are OTHER options. Debt is not the only option.

[AlphaFrog]

Originally Posted by amanda6035

I wish bankruptcy wasn't an option... too many people abuse it and don't learn their lesson.

Originally Posted by DeltaBetaBaby

Please cite your sources.

Most bankruptcies are medical, and people can not simply "negotiate debts away", as you seem to think. If they *DO* negotiate, it's because the creditor would rather get part of the repayment, rather than getting nothing if the debtor went into bankruptcy. If bankruptcy no longer existed, the debtor's ability to negotiate would all but disappear.

Originally Posted by amanda6035

Psh, please, do you feel big and bad now? "Shame on you because you have no compassion for people who might just have a case of bad luck."

The fact of the matter is, bankruptcy IS an option, so me voicing my wish that it wasn't isn't going to change anything. So I don't know why you're so offended, it's not like my wish is going to magically come true. (HPRL anyone?) So there ya go, knock yourself out walking in front of a bus and rack up medical debt for all I care. If you can't afford it, good for you, you have options to get your slate wiped clean.

Here's your cited source you asked for. This is just one example of stupidity.

BTW - I love how you people like to insinuate that I said something I didn't. I didnt say there shouldn't be help for people who legitimately need it. However - people abuse bankruptcy, and I think there should be stricter rules about who qualifies, for why, and how. The abusers rack up debt they don't intend to pay, and then play the "woe is me" card, and get it forgiven.

There's a difference in people like the dumb girl in the article I referenced, and people who end up with medical debt they had no control over.


*DBB - Well, I guess you're right. Let's keep bankrupcty around so that there is negotiating power. Oh but wait. If bankruptcy wasn't an option, how would those companies get paid? wage garnishments? Last time I checked, they can only do so much. And you can't put the person in "debtors prison" because the person wouldnt be making any money or have the ability to pay back the debt. So what do you suggest?

Medical debt is ridonkulous anyway. If they have the ability to negotiate and forgive as much as they do, then maybe they should lower the prices in the first place. It shouldn't cost $700 for an asprin while in the hospital.

One person's story is hardly a source for trying to claim that most people abuse bankruptcy. And DBB isn't the one that suggested that we eliminate bankruptcy, so it's not her point to defend and find alternates for. If you're going to say it needs to be eliminated then you're the one that has the burden of suggesting alternate options.

It's great that you think medical debt is ridic. Why not just make medical care free? Wouldn't that be great??

[DeltaBetaBaby]

Originally Posted by amanda6035

So there ya go, knock yourself out walking in front of a bus and rack up medical debt for all I care. If you can't afford it, good for you, you have options to get your slate wiped clean.

Actually, I can afford it just fine, because I am insured through my university, and the taxpayers of Illinois pick up the bill for my healthcare. I'll tell you what, we can get rid of bankruptcy as soon as we have single-payer healthcare.

Other than that, I think AlphaFrog just about covered all the other barely-comprehensible points you made...and let me tell you, AlphaFrog and I agree so rarely that it's safe to say you are pretty out in left field on this one.

[Kevin]

Originally Posted by fascination

He gives good common sense advice, has a step-by-step plan, and encourages people to negotiate with creditors to settle bad debts for less than owed -- but ONLY IF you honestly can't pay what you owe. He never wants you to file bankruptcy unless yu are absolutely forced to do so, like if someone sued you and has attached your wages so badly that you can't buy bread. Dave hates debt, and he especially hates student loan debt.

FYI, some guy called in to his radio show the other day and said his wife has $160,000 in student load debt. He wanted to know how they can ever pay it back? Dave said, "Whoa! Who's the doctor?" The guy said it's all his new wife's debt -- $145,000 for a four-year journalism degree, but then she decided that she wanted to cut hair instead, so she went back to cosmetology school with $15,000 more student loan debt. I think he said they make about $60,000 between the two of them. The debt is government guaranteed, so I guess we taxpayers will eventually pay it back to the lender. Ridiculous.

I differ with Ramsey on that point and that's why I refer to his views as being overly simplistic. Debt should be an investment. Whether you're talking about leveraged buyouts or student loans for degrees which are going to allow you to earn a higher income, debt is not dumb.

I invested around $100K (student loans) in my J.D. I'm about 3 years out of school and have aggressively been working on that debt. I should have it paid off next year, and then will go to work on my home mortgage.

The $160K indvidual, *I think* would qualify for an income-sensitive repayment plan and could have her payments extended out 20 years. I want to say that after 20 years, the debts are forgiven assuming you haven't defaulted.