bankruptcy

[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.

[Munchkin03]

Originally Posted by amanda6035

*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.

Wow...not only is what you're saying barely comprehensible, it's totally wrong. It also seems that you're making all sorts of false assumptions. I, in your words, "have a life to live," as well, and that doesn't involve calling people stupid for making an investment in their futures. For all you know, I could be paying 4X what my monthly payment is just to pay them off...and it's still just not that much. Sorry I thought a little bit more than you did before going to graduate school.

I'd recommend that you take a deep breath and step away from the keyboard before letting your fingers do the walking. While you might have a point that debt is not the only option and that students and their parents should do as much research as possible, your defensiveness, anger, and poorly worded rants don't help.

[SydneyK]

Originally Posted by amanda6035

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.

At least you're willing to admit now that they (student loans) are an option, and not just a tax on your own stupidity.

You seem really bitter about all this.

[AGDee]

Originally Posted by amanda6035

*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.

Perhaps a better question is, what are the other options?

Lets look at the finances.
If you chose to go to a community college for two years first, that would save money. Here, you'd pay around $6000 for a year of community college and books. If you shared an apartment with someone, you could probably get by on $350 for rent, another $100 for utilities, and $300 for groceries/hygiene/paper goods. You'd need a car, insurance and gas. If you bought a used car with a small car loan, you could probably do all that for around $500 a month or $6000 for the year.
Annual costs:
$6000 - school
$4200- rent
$1200- utilities
$3600- groceries
$6000- car
So your costs, at a minimum, because we didn't include any clothes, unexpected expenses, medical expenses, etc. would be $21,000 per year or $42,000 for two years of community college.

If you made minimum wage... approx. $7.00/hr, you'd only have to work 3000 hours a year to cover your expenses, before taxes. Oh wait, working full time is 2080 hours a year. You'd have to find a job making more than minimum wage to cover your expenses.

After two years, you'd still need to transfer to a 4 year college/university. At that point, school costs would double.

I don't see how you would do this and go to school full time. If this student goes to school part time, then they can cut the school expenses by $3000/year but they double their living expenses over time. So, in 4 years, they accomplish the same thing and their expenses are $72,000, while working at minimum wage type jobs. And they still have to do two years at a 4 year university somehow. So they take another 4 years to finish their bachelor's degree @ 21,000/year = $84,000. Total spent over 8 years- $156,000. THEN they can start making $17.00/hour.

Alternatively, they could eliminate car expenses, spend $60,000 on a 4 year directional public university, finish in that same 4 years and start making (we'll go conservative, like an entry level teacher in this area) $17.00, 4 years earlier.

So, income goes up by $10.00 for 4 years post college @ 2080 work hours/year= $83, 200 more than you'd make during the 4 years that you would have still been finishing your degree.

So you borrowed $60,000 to earn $83,200. Of course, we need to add interest. A loan calculator provided the following for me:
Loan Balance: $60,000.00
Adjusted Loan Balance: $60,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00

Monthly Loan Payment: $690.48
Number of Payments: 120

Cumulative Payments: $82,857.94
Total Interest Paid: $22,857.94


So our cumulative payments are $82,856.94 if paid off in 10 years. But, we make $83,200 more than we would have otherwise. That sounds like an investment to me. If motivated and able, you could work 15 hours a week at minimum wage while going to college full time and reduce your loans by $5460 per year or $21,840 over 4 years.

Loan Balance: $38,160.00
Adjusted Loan Balance: $38,160.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00

Monthly Loan Payment: $439.15
Number of Payments: 120

Cumulative Payments: $52,697.41
Total Interest Paid: $14,537.41

So then you'd pay $52,697.41 to make $84,000.

That's definitely an investment.

[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.

[amanda6035]

Originally Posted by DeltaBetaBaby

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.

AGAIN, a wishful comment is not magically going to happen. Bankruptcy's not going anywhere, so it's okay, you don't have to panic.

What would you do without all those tax payers? Maybe you should send a thank you note.