Author Topic: Discharged!  (Read 5002 times)

Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1536
  • Location: Canada
    • My Necronomicon of Badassity
Discharged!
« on: April 02, 2014, 12:02:42 PM »
This is sad on so many levels, I don't even know where to start.  Getting sick sucks, but the slant of this article rubs me the wrong way.

"Frank filed for bankruptcy. But that did not erase the giant pile of federal Parent Plus loans that he had taken out to help put his three children through college. Since he could no longer work, Sallie Mae, the loan servicer, ultimately suggested applying for a disability discharge, which would cancel the debts."

http://www.nytimes.com/2014/03/28/your-money/disabled-borrowers-trade-loan-debt-for-a-tax-bill-from-the-irs.html?partner=rss&emc=rss

In short:  66 years old.  Never saved a dime.  Took on debt to put his THREE kids through college.  Got sick.  Filed for bankruptcy. Had the total debt reduced from $150,000 to $59,000.  Still complains about the situation. 

Do people think they can work forever?  He's 66!  Had his chance to make money, long time.  Given the facts in the article, is it a viable solution now to maybe take on huge loans to put all your kids through the best colleges and then smoke and eat junk like a sumbitch to hopefully get some sort of disability and have the slate wiped clean? ...I mean, unless we just die one night in our sleep while fit as a fiddle, we can all expect something to take us down if we work 'til we drop.

Anyway, I don't think the IRS is the idiot in this article.

Rebecca Stapler

  • Pencil Stache
  • ****
  • Posts: 907
    • Stapler Confessions
Re: Discharged!
« Reply #1 on: April 02, 2014, 12:10:27 PM »
Wow. I don't share your distaste. He qualified for a disability discharge, which isn't easy to do, and now instead of paying an amortized student loan bill, he's hit with $59k due immediately.

I think the article sheds light on a real problem with how student loans are handled in this situation.

Nords

  • Magnum Stache
  • ******
  • Posts: 3217
  • Age: 59
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Discharged!
« Reply #2 on: April 02, 2014, 01:24:04 PM »
In short:  66 years old.  Never saved a dime.  Took on debt to put his THREE kids through college.  Got sick.  Filed for bankruptcy. Had the total debt reduced from $150,000 to $59,000.  Still complains about the situation. 
Do people think they can work forever?  He's 66!  Had his chance to make money, long time.  Given the facts in the article, is it a viable solution now to maybe take on huge loans to put all your kids through the best colleges and then smoke and eat junk like a sumbitch to hopefully get some sort of disability and have the slate wiped clean? ...I mean, unless we just die one night in our sleep while fit as a fiddle, we can all expect something to take us down if we work 'til we drop.
Anyway, I don't think the IRS is the idiot in this article.
Once again a guy behaves perfectly legally, but we castigate him for his lack of ethics and responsibility?

I guess we're actually just castigating him for not living up to our standards of ethics & responsibility... whatever those standards may be.

I think karma has extracted at least $100K of value from his life happiness.  I would not see this as "Winning!"

randymarsh

  • Handlebar Stache
  • *****
  • Posts: 1374
  • Location: Denver
Re: Discharged!
« Reply #3 on: April 02, 2014, 03:41:45 PM »
I wonder if we'll ever see changes made to the Parent PLUS loan program. Given how much people are borrowing now, it's a recipe for disaster. The credit check is the bare minimum and income isn't even asked. Limit is only cost of attendance of the school. Students have no legal responsibility to pay. Tons of low/middle class parents are signing up for these loans and  have no way to repay them if their kid can't get a job or refuses to help.


CarDude

  • Pencil Stache
  • ****
  • Posts: 611
  • Location: Chicago, IL
  • Beep Beep!
    • The CCD
Re: Discharged!
« Reply #4 on: April 02, 2014, 06:59:39 PM »
In the span of a year, he lost his wife of 36 years from a medical condition that was diagnosed only six months before her death, his job at 66, and was diagnosed with kidney cancer.

I've got nothing but empathy for this guy.

And for the record, his bankruptcy declaration was due to medical charges. There are an awful lot of things wrong with this story, but they're far more reflective of the barbarism of our country's approach to education and healthcare than they are of this fellow's character.
« Last Edit: April 02, 2014, 07:02:53 PM by CarSafetyGuy »

MgoSam

  • Magnum Stache
  • ******
  • Posts: 3643
  • Location: Minnesota
Re: Discharged!
« Reply #5 on: April 03, 2014, 08:10:11 AM »
I don't see any issue with the discharge, but rather that the tone of the article implies that he is somehow a victim in all this, as if he had no say or control over anything. There are a lot of people that are in dire financial situations and while many of the times it is due to things over their control, there sometimes have been things that many of us could have done to better prepare us.

There is a quote from "The Sun Also Rises" that comes to mind, a character is asked how he became bankrupt and responds, "Gradually, then suddenly."

kite

  • Pencil Stache
  • ****
  • Posts: 606
Re: Discharged!
« Reply #6 on: April 10, 2014, 04:47:16 PM »
My issue is not his ethics, he got dealt a shitty hand in the last few years. But his balance due went from over $150,000 (the article didn't say how much was discharged in bankruptcy before the student loans were discharged) to $30k (with his outrageous lawyer fees) and the article makes it sound like this guy is getting ripped off.

My question is: Where are his kids? You know, the ones he took the Parent Plus loans out for? Ethically I think they need to step in and help him out here. At $50k each I would hope they got a decent enough education to help him pay off $10k each of his bill

This!

Plus, if your parents need to go into debt to buy it, you simply can't afford it. Whether "it" is a brand new car or a college degree.  Tuition has skyrocketed beyond inflation in largee part because of the ease of borrowing.   Like with housing,  this is catching up with us in the worst possible way.  Parents need to say no. 

rocksinmyhead

  • Handlebar Stache
  • *****
  • Posts: 1491
  • Location: Oklahoma
Re: Discharged!
« Reply #7 on: April 11, 2014, 06:44:13 AM »
My question is: Where are his kids? You know, the ones he took the Parent Plus loans out for? Ethically I think they need to step in and help him out here. At $50k each I would hope they got a decent enough education to help him pay off $10k each of his bill

yeah! what the fuck?!