Not paying off U.S. student loans

Discussion Open Forum
121

You clearly do not understand the us legal system.
[/quote]
I guess I totally wasted those three years in law school, then. :ohreally:[/quote]

Evidently you wasted every minute you spent there and every dime you spent on tuition, since you are quoting poorly researched internet articles to prove legal procedures
that simply do not exist.

Or perhaps you went to law school in Zimbabwe? That would make total sense.[/quote]

Wow, way to be an asshole, dude. You made a stupid argument and got called on it. Deal with it.[/quote]

What stupid argument? EVERYTHING about debtor’s prison you have said was wrong! I provided plenty of references to prove it. Even pointed out the faulty points of the internet article you used as a basis for your incorrect argument. Even another article which was linked to the SAME article you were using proved my point and showed you were incorrect.

Maybe I was a bit assholish with that (I’ll own that one) but you have been thoroughly been disproven here.

And in all honesty, with 3 years in law school I would imagine you could actually cite a precedent, an academic article, SOMETHING substantial. Rather, you used a biased article (which again, linked to another article that showed you were wrong). The fact that you couldn’t show something substantial does make those three years seem a little worthless. You’re the one that brought up your education to provide some sort of imaginary credence to your argument…you opened the door to that one, not me. (sorry about the assholishness, the flob seems to bring out that side of people)[/quote]

You’re the one who made some silly argument that “Arrest warrants are issued in connection with crimes”, blah, blah, and nonpayment of debt isn’t a “crime”.

An “arrest” merely means being detained by the police. It doesn’t mean “being convicted of a crime.” A traffic stop is, technically, an “arrest”. So is being hauled out of your place of business in handcuffs, jailed for five days until the court is in session, and then being hauled before the judge over a debt-collection issue. It furthermore has absolutely NOTHING to do with whether or not the person was properly served process.

The WSJ article pointed out that people ARE getting arrested.

If you want other articles, go fucking Google them. It’s been in the newspapers quite a bit around here, and Lisa Madigan, the state’s attorney general, has been taking some heat for allowing this ABUSE OF THE SYSTEM against debtors – note that key word, ABUSE, which I mentioned before in one of my posts.

The ONLY bit of that article that was blatantly incorrect was the title relating to “debtor’s prison”, which was mere hyperbole on the part of the headline editor, and which does not make anything else in the article false, wrong, mistaken, or otherwise biased.

Oh, and as far as the ARRESTS being somehow “legitimate” because the people ignored the summons, I’m going to assume that you have never heard of what legal professionals laughingly refer to as “sewer service”, which is process service – the notification of a defendant that he is being sued by sending court papers to said defendant – that was deliberately made in such a way that the defendant does not receive notification. It’s a rather sleazy legal tactic that sometimes gets used by sleazy plaintiffs, such as sleazy debt collectors.

If you want some scholarly article, well, golly, I’m not aware of any law review journals that focus on the latest trends in debt collection and process abuse. I hate to tell you, but ivory-tower academics don’t generally focus on street-level tactics in the battles between deadbeats and sleazy debt collectors; that’s left to the minimum-wage journalists working for the Chicago Tribune, the Southtown Herald, and occasionally a few national newspapers like the WSJ. If you want some spiffy articles on how the latest patent “reform” is going to damage the patent system in the United States or the latest on the constitutionality of the Obamacare debacle, I’ll be happy to point you to them. Of course, then I’d have to charge you US$300/hr, and I might have to sue you and try to get you arrested next time you show up at a U.S. Customs checkpoint in order to collect, so maybe it’s just as well that I don’t.

Now, feel free to continue to pontificate, insult, and generally wave your e-penis around. I’m sure it will be just as enlightening as your other comments.

122

I don’t care who you are…that right there is funny…
and true too

123

[quote=“Impaler”]

You’re the one who made some silly argument that “Arrest warrants are issued in connection with crimes”, blah, blah, and nonpayment of debt isn’t a “crime”.[/quote]

That actually wasn’t me who said that (though the quote is exactly how it appeared on this thread, but your attribution is incorrect) you can look back and see…

[quote=“Impaler”]
An “arrest” merely means being detained by the police. It doesn’t mean “being convicted of a crime.” A traffic stop is, technically, an “arrest”. So is being hauled out of your place of business in handcuffs, jailed for five days until the court is in session, and then being hauled before the judge over a debt-collection issue. It furthermore has absolutely NOTHING to do with whether or not the person was properly served process.

The WSJ article pointed out that people ARE getting arrested.[/quote]

And according to that article…what is happening is against the law! Why? Because they were not notified of the summons. Again, they were not in prison over not paying a debt (which IS what you claimed) but for not answering a summons (which may or may not have been issued…which IS the issue).

[quote=“Impaler”]
The ONLY bit of that article that was blatantly incorrect was the title relating to “debtor’s prison”, which was mere hyperbole on the part of the headline editor [/quote]

Exactly, I was right, thank you for admitting it.

[quote=“Impaler”]
Oh, and as far as the ARRESTS being somehow “legitimate” because the people ignored the summons, I’m going to assume that you have never heard of what legal professionals laughingly refer to as “sewer service”, which is process service – the notification of a defendant that he is being sued by sending court papers to said defendant – that was deliberately made in such a way that the defendant does not receive notification. It’s a rather sleazy legal tactic that sometimes gets used by sleazy plaintiffs, such as sleazy debt collectors. [/quote]

Which is ILLEGAL, which is my exact point. I.e. people are NOT going to jail for owing money.

[quote=“Impaler”]
If you want some scholarly article, well, golly, I’m not aware of any law review journals that focus on the latest trends in debt collection and process abuse. I hate to tell you, but ivory-tower academics don’t generally focus on street-level tactics in the battles between deadbeats and sleazy debt collectors; [/quote]

I am an “ivory-tower academic” and I love to tell you, but we all love getting our hands dirty. If there was a legal procedure to jail people for owing money, I am sure it would have been covered. Why is there no such article? (because there is no such legal procedure)

[quote=“Impaler”]
Now, feel free to continue to pontificate, insult, and generally wave your e-penis around. I’m sure it will be just as enlightening as your other comments.[/quote]

Your statements were just as misleading as the article itself, there’s no penis waving here (if you would like, maybe I could oblige…) but nice back peddling, makes it seem as though we agreed the entire time.

124

I had resolved to stop posting and so this is an exception.
Student loans were designed to allow students to gain enough eduction to increase income tax. Argue if you want but that’s my opinion. Somewhere, some whacko, “Sallie” got involved and decided much like the mortgage companies, that there’s money to be made here. If on the chance, and likely so, if we can buy the 1% loan, sooner or later, we can increase it to 9% and make some real money. These things don’t happen by chance. It was a corporate decision at Sallie to make some money.
What they didn’t count on was that at 9%, newly employed folks will simply stop paying. They can intercept income tax returns, etc and do. They can attach bank accounts but what newly employed student has any money in the bank account? Not many. How about the vast equity you have in the new home that you paid too much for anyway and the housing market is in the toilet? Fucked again.What can you do? Well, maybe put in the press about how irresponsible young people are about not paying their obligations. Hell, you would think that would work. Right? Well, it didn’t, for the most part. I, for one was struggling with a huge debt at at 1% but I was paying it off. When it was transferred (sold) to a 9% company, it was impossible. I had to mortgage property and pay the loan and then pay the loan on the property at 6%. Since the mortgage loan was only 1% more, I ended up at about where I had been. I was lucky. I had some asset to mortgage. Most don’t.
After all these pages, and I just read through them again, I will re-state that you should pay if you can. On the other hand, the U.S. government has been highly influenced by those same people that screwed home owners with ludicrous loans, have also conspired to screw student loan holders.
I previously stated, “fuck em”
Probably too strong but without again using those words, my sentiment is the same.
What I see now is that there is little emphasis on collection. There are still intercepts on tax returns but rarely does any collection agency try to guaranshee wages, etc.
Bottom line, I would not worry too much. Pay if you have the ability, preferrable in lump sum and put debt off on another property even if it means an extra interest point. Next, cut your exemptions so that you owe some income tax insted of getting a return; thus no tax intercept. Bankruptcy is nearly impossible and the banks have made it that way. You might prevail on an issue of impossibility but not likely.
Bottom line, pay if you can. Next protect yourself if you can.
I know from the posts that there are those that take a hard line on repayment. If you owe student debt, maybe you will want to review this in a couple years.
What the hell; "FUCK 'EM. These are the same folks that took one TRILLION DOLLARS of your money to bail them out of their own fucked up business transactions and then critisize students. And to those that don’t like my language, well, " . . . . . . . . . . u!

125

Impaler:[quote] Not only that, but if someone defaults, the maximum that the loan program can garnish from wages is only 15% of the person’s income. On a US$30,000 salary, that’s only US$4,500 per year.[/quote]

I was told the same thing, but in my case, with three kids, a wife and a crappy teacher’s salary, I think the HR told me that the most that could be garnished was closer to 2%. In addition, the cost of living in the Central Coast (California) is through the roof, so there must be some sort of formula that is used to calculate the exact percentage. Any road, as I mentioned in my other post, I had the opportunity to decline, which I did, and so far, that was that.

However, I can say that one of my closest friends did exactly what a lot of other posters have mentioned i.e., took out a lot of loans for ‘useless’ degrees (he has three: BA, music; BA, German; MA, German) and has never missed a payment (even while living in Taiwan for eight years). He has been a Microsoft certified engineer for about a decade now, makes a good living and was paying down his debt, but around Christmas last year one of his creditors assessed a fine against him for having owed them money for more than twenty years and so far he has not been able to get them to remove it- to me that is nuts as how can you ever pay off a debt if creditors can so easily erase any progress you have made in paying down that debt?

Given my friend’s situation, this article regarding seniors still paying off student debt is a hair raiser, especially the one quote from a young guy calculating that he will finish paying off his student loans at about the same time his children will begin taking on student loans themselves: http://moneyland.time.com/2012/04/03/60-and-still-not-out-of-student-loan-debt-seniors-facing-36-billion-in-college-loans/?hpt=hp_t2

Finally, I agree that people should a) pay back their student loans and b) should be clearly given a realistic picture of what their debt and payments will look like once they finish school before they sign on the dotted line.

126

Entertaining thread. Thanks all.

I’m a bit surprised at the moral indignation on this thread aimed at the OP who is contemplating a strategic default. It reminds me of something I recall from somewhere that students, if given the opportunity, tend to impose harsher punishments on fellow students than teachers do, even for the same infraction.

I think the moral indignation is a bit misguided. A debt is a contract. It is not a moral obligation. The ten commandments (if you’re into that sort of thing) are moral obligations. And you may have an eleventh commandment on your stone tablets that says “thou shalt not default on a debt”, but that moral obligation is completely separate from the provisions of the debt contract that the OP has with his lender.

A contract is not a moral obligation. Contracts have default provisions when the agreement is violated. Laws and judges, in turn, interpret contracts when one party defaults. And if a court issues a judgment, a sheriff’s office or other agency uses lawful means to collect on the judgment. If there are no such lawful means available, then the judgment goes uncollected. And even when the debt and judgment is uncollected, the debtor is still in full compliance with the law.

The US debt collection system generally benefits debtors, as there are quite a number of uncollectable judgments out there, but the one exception is education loans. Being in default on student loans is an extremely common state of being for low income Americans, so the OP would be joining a large crowd. Most people with judgments learn to live and work outside the banking system. They use check cashing places (instead of having bank accounts), they work for cash instead of a paycheck, etc etc. They get non-traditional financing instead of a bank mortgage.

I’m inclined to be a bit more forgiving of someone who wants a way out of debt sins incurred when he was a stupid 18 year old. I sure as hell didn’t know a damn thing when I was 18. 95% of people who have avoided his situation probably had better luck in life (rich parents, a college or major that resulted in making enough money to pay off debts, etc), more than actually being morally better people.

Debt default is a time honored component of the capitalist system. Greece is getting its debt cut right now. Spain and Italy may not be far behind. Corporations do it all the time. Individuals should have the same opportunity to reset themselves. It’s not dishonorable, it’s just an acknowledgement of reality. And in some ways it’s what makes capitalism thrive because companies die quickly and are reborn quickly. Capitalism without default would just be indentured servitude or slavery. Still, the US system is quite regressive on debt matters in that individuals have much harsher obligations than corporations. A corporation can walk away from pretty much any debt at the drop of a hat.

127

I think I just felt my interest rates going up…

128

What rot. Of course it’s a moral obligation.

129

“not illegal” does not imply “is moral”.

The process is the same for both corporations and individuals: declare bankruptcy.

Student loans are one of the few forms of debt not dischargable in bankruptcy, and the law was changed to make that the case because there’s no way to take away the underlying asset and sell it to someone else.

130

When the only justification for an argument is “of course it is”, that’s when you know there’s absolutely no rationale for the argument being made, so the only rationale left is, “of course it is”. If there were any better rationale, it would already have been made.

131

When the only justification for an argument is “of course it is”, that’s when you know there’s absolutely no rationale for the argument being made, so the only rationale left is, “of course it is”. If there were any better rationale, it would already have been made.[/quote]
Is “Do unto others…” a moral obligation? If so, I don’t think any of us would really want people to borrow money from us and not pay it back.

Hope my interest rates don’t go up too much…

132

That’s the point. It is a moral obligation, but not to the bank. They just see loans as an investment with a certain measurable risk, and mostly just print the money into existence anyway. The obligation is to society in general. If too many people consider default or non-payment an acceptable course of action, the entire basis of a credit-based economy falls down, and everyone else finds access to credit restricted or more expensive. People have to believe in credit for it to work.

133

That’s the point. It is a moral obligation, but not to the bank. They just see loans as an investment with a certain measurable risk, and mostly just print the money into existence anyway. The obligation is to society in general. If too many people consider default or non-payment an acceptable course of action, the entire basis of a credit-based economy falls down, and everyone else finds access to credit restricted or more expensive. People have to believe in credit for it to work.[/quote]

Maybe our current credit based economy should collapse like the house of cards it is (oh wait, it kinda already did…but not totally, people are puttin them cards all back up as fast as they can).

134

When the only justification for an argument is “of course it is”, that’s when you know there’s absolutely no rationale for the argument being made, so the only rationale left is, “of course it is”. If there were any better rationale, it would already have been made.[/quote]
Is “Do unto others…” a moral obligation? If so, I don’t think any of us would really want people to borrow money from us and not pay it back.

Hope my interest rates don’t go up too much…[/quote]

OP here. If we look carefully at the context, I think that ‘do unto others’ is a bit less clear than you’d like it to be. Of course, I do not enjoy the prospect of participating in an act which will bring harm onto others (i.e. raising your interest rates), and I rarely participate in anything that would be constituted as theft (the occasional download notwithstanding), but again, context is everything. Here, I have considered shaving off a minuscule percentage of the profits of a huge business which, among many others of its kind, leaves a tiny percentage of the human population as its ultimate beneficiaries. The ultra-rich will be aided in no substantial way by our contributions to them, even if you could say we are morally obligated to return the funds we borrowed from them, while the cost of full repayment of my debt to the ultra-rich in question would indeed be a substantial burden on my life. Ergo, I am treating those who would profit from my poverty, regardless of the burden they have placed upon me in like kind. The only reason that I have been able to enter negotiations based upon my income is because of some Federal laws which require them to - if they had their way, they would treat me far worse. So in truth, I am doing unto them as I would have them do unto me - had I the funds that they had, I would be assisting in the education of those who were not fortunate enough to be born into enough wealth to finance that which ought to (and shall someday be) considered a basic human right: access to the information required to make oneself a useful member of society - and I would not be doing so only if they were able to pay me back in excess of my assistance. In truth, I would be doing it because I would recognize how much I have and how little so many others do. That’s why I give to those who obviously need it, albeit in far smaller amounts than I would like to, as I have relatively little to give at this time.

But again, with that said, I hope to not be a burden on you, fellow worker. I have been actually working with my lenders to secure a reasonable payment plan, but still have yet to receive word back from them… F.Y.I.

135

Teddo and silmanor: As finley wrote, once the trust is gone in a system, it collapses. That’s the moral obligation that has been spelt out time after time in this thread. You two just continue to ignore it, both before and after my post. Frankly, it’s why I am glad I don’t live in the West anymore, and it’s why I’m glad that people like you two can’t get their hands on my money. The descent into moral bankruptcy by the average man in the West disgusts me. If you borrowed the money, you should pay it back. It doesn’t matter who you borrowed it from or what their financial circumstances are. You have a moral obligation to honour any contract you make. If you can’t fulfil your moral obligations with money, then you probably can’t be trusted to fulfil your moral obligations in broader civic life either. As such, that’s not a society I wish to live in.

136

Of course one has a moral obligation (as well as a legal one) to repay money borrowed pursuant to a signed loan agreement. To pretend it’s not is just self-rationalization and the talk of stoned liberal arts majors who can’t find decent work.

Sorry the economy sucks, but a deal’s a deal. You can beg for mercy and modification of the loan terms – that may be understandable in today’s world – but don’t pretend it’s OK to breach a contract and default on a loan. It’s not.

137

What changed your mind?

[quote=“robinhood5000”]* * *

Where does the law stand on the Hess “break your contract” fine.

[/quote] [Forumosa - Taiwan's largest and most active Taiwan-oriented global online community in English … 96#p848496](The Hess fine

[quote=“lupillus”]Setting terms for breaking a contract is not illegal. You have to give that amount of notice and also pay them the fine.

They can’t deduct it from your pay, and they can’t withhold your pay, but they can sue you for the amount you agreed to in the contract.

[/quote] [Forumosa - Taiwan's largest and most active Taiwan-oriented global online community in English … 10#p848510](The Hess fine - #2 by lupillus

[quote=“GuyInTaiwan”]I didn’t pay the Hess fine when I quit. Sure, they tried to intimidate me on a number of occasions in a number of different ways. It worked on some people I knew, who lost sleep over it, but I treated the whole thing like a game from the outset and I think I approached it in the right way.

Hess isn’t allowed to fine you up front though.

Hess had to return the money they fined me. It was then up to them to try to get that money back from me.

Of course, they will threaten to take you to court. If you bow to their pressure or you let it get that far then you haven’t fought correctly. The object is not to win, but in classic guerrilla fashion, to make it so expensive for them to win that it’s not worth them winning.

I ignored their letters or e-mails or stalled them, forcing them to send more, thus allocating more resources to my problem.

I took them to meetings with the CLA, during which they had three people (one of whom was a lawyer, I think) present, who had to travel from Taipei. Thus, I tied up more of their resources. I threatened further meetings and mediations, which would have tied up even more of their resources.

Don’t get emotional, and don’t let them intimidate you: bleed them until they can’t afford to win.[/quote] [Forumosa - Taiwan's largest and most active Taiwan-oriented global online community in English … 52#p863352](The Hess fine - #24 by GuyInTaiwan

138

[quote=“Mother Theresa”]Of course one has a moral obligation (as well as a legal one) to repay money borrowed pursuant to a signed loan agreement. To pretend it’s not is just self-rationalization and the talk of stoned liberal arts majors who can’t find decent work.

Sorry the economy sucks, but a deal’s a deal. You can beg for mercy and modification of the loan terms – that may be understandable in today’s world – but don’t pretend it’s OK to breach a contract and default on a loan. It’s not.[/quote]

Could silmanor get back on your good side by hiring a lawyer?

[quote=“Mother Theresa”]LAWYERS DO THAT KIND OF STUFF ALL THE TIME – find their client in a crappy position and scrutinize the contracts and applicable laws to look for any possible argument to try to gain benefit for their client. There’s nothing scummy or dishonest about that; it’s called zealous representation.[/quote] [Forumosa - Taiwan's largest and most active Taiwan-oriented global online community in English … 73#p970673](Bailout and financial crisis - #19 by Mother_Theresa

139

[quote=“Mother Theresa”]Of course one has a moral obligation (as well as a legal one) to repay money borrowed pursuant to a signed loan agreement. To pretend it’s not is just self-rationalization and the talk of stoned liberal arts majors who can’t find decent work.

Sorry the economy sucks, but a deal’s a deal. You can beg for mercy and modification of the loan terms – that may be understandable in today’s world – but don’t pretend it’s OK to breach a contract and default on a loan. It’s not.[/quote]

A deal is, in fact, not always a deal.

The classic example: baby selling. Even if a party A sign an agreement with party B that they will exchange x amount of money for little Johnny - the courts will not up hold the deal.

The famous example: from a case which went to court in America - a rich couple wanted a baby but were unable to have one, signed an agreement with a young woman who had already had one baby but was willing to have artificial insemination (from the rich male of the couple) and hand over the baby at birth.

In the end, the mother refused to hand over the baby. The high court ruled that the deal did not stand because the mother was not able to fully appreciate, at the time she signed the deal, the value of that baby to her at birth.

The OP could make the same argument: that he/she was not able to fully appreciate the valuelessness of the degree they signed up for. They could argue that they signed the deal with the expectation of getting higher earnings, from a proper job. But as that has all changed, the OP has not got the deal they signed up for. He is living in a foreign country, far from family, etc.

A deal is not always a deal. Who can deny that the circumstances have changed? Who can deny that the degree is not doing what the loan for it sold it as?

140

[quote=“Mother Theresa”]Of course one has a moral obligation (as well as a legal one) to repay money borrowed pursuant to a signed loan agreement. To pretend it’s not is just self-rationalization and the talk of stoned liberal arts majors who can’t find decent work.

Sorry the economy sucks, but a deal’s a deal. You can beg for mercy and modification of the loan terms – that may be understandable in today’s world – but don’t pretend it’s OK to breach a contract and default on a loan. It’s not.[/quote]

Sorry Mum, but debt defaulting is a civil matter, with no necessary legal implications. However, it is true that an individual can be sued for defaulting on debt, as it is a contract, and s/he can be called to to appear in court, although what ensues is up to the judge. You cannot be arrested for defaulting on debt. What you could be arrested for is not appearing in court if you are summoned.

And frankly, I am tired of all this self-righteous ‘you owe them’ talk; I have always repaid my friends, and would normally even to a stranger if I could, but in the system we live in, it is of no real consequence to the ultra-rich to have tiny bits taken from them. If you don’t realize how much they are ‘legally’ stealing from us all, you’re deluding yourself. They lobby to take as much as they can, and have the money and power to leverage the system against the hard-working masses. You sound like people who would root against Robin Hood, and for the established ‘laws.’ Remember, it was legal and the people ‘owed’ the money that was taken from them. Fiction can be useful, no?

Time to see the big picture. Someday, a great restructuring of society shall take place, and no longer will a tiny fraction of humanity be able to hoard a huge amount while the masses remain impoverished.

And no, I am not ‘begging for mercy.’ I am giving them a fair chance to get something back from me, as I did indeed borrow every cent with the initial intent of full repayment. It is up to them to see if they have the decency and respect to be reasonable. You can’t squeeze blood from a stone, no matter how you try. Even you must see this.