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wtf? Putting student loans on credit cards and defaulting

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Obviously people have no idea how important, or hard it is to get a good credit rating once you have it borked up.

it took me 8 years to get my credit back after a bad divorce.....at 25 I had to have my mother co-sign for a loan for a POS car I needed for work...that was pretty bad......who the hell wants to depend on mommy or daddy when they are 25?

I busted my ass to get my credit up into the 800 range and I will never let it drop.

As someone already stated...may employers do a credit check now and that can make or break a job opportunity....in this day and age people need every edge they can get...but hey, if some idiot wants to screw up his/her credit ....less competition in the job market leads to more opportunities for those of us that are responsible.

 
I don't particularly care what my credit rating is, as I don't borrow money anymore.
The only exception to this is a future mortgage, but I intend to pay 20% down.

About jobs: From what I understand (may not be much), only jobs that have something to do with money directly (bank teller, for example) or security clearances have a high potential of being impacted by bad credit scores.
 
Next year colleges and universities will need bail outs. Simple reason really. mommy and Daddy won't be able to get that home equity line of credit to pay the outrageous prices of college these days.
 
I never understood student loans. When you're in school you don't work summers, why not get a job? Starting from highschool. I made all my money to pay my first year tuition while I was in high school, then continued making more money during college to pay for the next years tuition, books etc...

Putting big lumps of cash like that on credit is only asking for trouble. Pretty sad when a couple are married, have kids, and are STILL paying their college fees, and have been working full time for years.
 
Originally posted by: Wheezer
Obviously people have no idea how important, or hard it is to get a good credit rating once you have it borked up.

it took me 8 years to get my credit back after a bad divorce.....at 25 I had to have my mother co-sign for a loan for a POS car I needed for work...that was pretty bad......who the hell wants to depend on mommy or daddy when they are 25?

I busted my ass to get my credit up into the 800 range and I will never let it drop.

As someone already stated...may employers do a credit check now and that can make or break a job opportunity....in this day and age people need every edge they can get...but hey, if some idiot wants to screw up his/her credit ....less competition in the job market leads to more opportunities for those of us that are responsible.
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8 yr marriage that ended before you were 25?
 
Doesn't a judge have to decide whether to grant you bankruptcy? Won't he see that you paid off student loans with credit cards, and thus deny your claim?
 
Information about Florida's Homestead Protection:

http://www.alperlaw.com/constitutional_protection.html

In Florida, our home is truly our castle, a castle that is impenetrable by creditors. The Florida Constitution exempts homestead property from levy and execution by judgment creditors. Florida courts have liberally expanded definitions of homestead property which includes more than just a single family house. Condominiums, manufactured homes, and mobile homes are also afforded homestead protection. The Constitution defines homestead as one?s principal place of residence up to one-half acre within a municipality and up to 160 contiguous acres in any county in Florida

.

To qualify for homestead protection, a debtor must be a permanent Florida resident and the homestead property must be his primary place of residence. Property purchased as a future residence is unprotected until the property is occupied as a principal residence. A second home or investment property cannot be considered a Florida homestead. Only "natural persons" quailfy for homestead protection so properties titled in the name of irrevocable trusts, corporations, limited liability companies, or partnerships will not qualify. Property owned by a living trust can be homestead property. A newly-enacted Florida Statute provides that property owned by a land trust may be homestead property.

What makes Florida?s homestead protection such a powerful asset protection tool is its unlimited monetary protection. A Florida resident can invest millions of dollars in large estate homes and farms and protect the full value of these luxury residences under Florida?s homestead law. Under a Florida Supreme Court ruling, a person can transfer unprotected, non-exempt assets to his homestead at any time by either buying a new home or reducing the principal balance of an existing mortgage and protect this money under the homestead umbrella, even if the asset transfer was clearly designed to hide money from creditor claims. There are limited exceptions to this general rule pertaining to money obtained by deceit, fraud, or other egregious means.

The Florida Constitution does not protect homestead property against tax liens, mortgages, homeowner association assessments, or from mechanics liens associated with labor or materials to repair or improve the homestead property. Also, the asset protection benefits of homestead should not be confused with the homestated tax exemption; the tax exemption and creditor exemption are similar but different rules can apply to each.

Homestead protection may not apply if the debtor files bankruptcy. Under the new bankruptcy law, homestead protection is available in bankruptcy up to $137,000 unless the debtor occupied his current Florida homestead property and previous Florida homestead properties for a continuous 40-month period. Joint bankruptcy debtors can protect $274,000 of jointly owned homestead. Also, transfers of cash into homestead within 10 years intended to defraud creditors may be challenged by the bankruptcy trustee. The new bankruptcy law has no effect on Florida's unlimited homestead protection outside of bankruptcy.
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The last paragraph does indicate that under certain circumstances a property is not protected under the Homestead protection during bankruptcy, but if you are smart about things then you should be able to retain your primary place of residence when filing. I'm no lawyer, but found this info useful back when I was debating filing bankruptcy 🙁
 
I still doubt that someone will keep their home if there's a mortgage against it and they don't reaffirm that debt during bankruptcy proceedings.
And nothing prevents credit card issuers from crying fraud.

And above all that: It would be utterly reprehensible to do this.
 
I thought about taking a big loan or getting high limit cards to pay off my school related debt then filing for bankruptcy, but that just seemed too easy and the thought of going to prison for fraud... Not worth it. I'll just live with my debt until it's paid off. It's going to take forever, but oh well.
 
It might not work.

When filing BK, your creditors are notified that you are filing and can contest it/show up in court. They can pull up your records to see what you've been spending, and then try to make a case in court that your intent was to get out of your student loans by taking out huge balance transfer checks, which can be considered fraud, and you're still stuck with the debt.

Your call.
 
Originally posted by: SuperjetMatt
Originally posted by: Naustica
In Florida, you get to keep your house in bankruptcy. Why do you think OJ had his house in Florida?
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I very seriously doubt that you can get out of secured debt while keeping the secured part (house).
Further, bankruptcy law is federal, not state law.

You can reaffirm debt if you choose to. That means you get to keep paying on it.
Anything you don't pay on will be repossessed.
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Actually i believe the poster is correct about Florida, read about that before.
 
Originally posted by: frostedflakes
Why do people always have to try to game the system? What happened to integrity? :|
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As long as corporate america keeps "legally" screwing people over, people will try just as hard to fight back.

I consider myself to be a little too ethical to pull such a stunt, but there is nothing preventing someone from trying it. Make a few loan payments, "realize" you can't afford the payments and file.

The situation can happen to honest people, so good luck trying to prove that you intentionally did something illegal.
 
Originally posted by: IHateMyJob2004
Next year colleges and universities will need bail outs. Simple reason really. mommy and Daddy won't be able to get that home equity line of credit to pay the outrageous prices of college these days.
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Good thing I'm graduating next spring then, huh? 😛
 
Originally posted by: Tweak155
Originally posted by: Wheezer
Obviously people have no idea how important, or hard it is to get a good credit rating once you have it borked up.

it took me 8 years to get my credit back after a bad divorce.....at 25 I had to have my mother co-sign for a loan for a POS car I needed for work...that was pretty bad......who the hell wants to depend on mommy or daddy when they are 25?

I busted my ass to get my credit up into the 800 range and I will never let it drop.

As someone already stated...may employers do a credit check now and that can make or break a job opportunity....in this day and age people need every edge they can get...but hey, if some idiot wants to screw up his/her credit ....less competition in the job market leads to more opportunities for those of us that are responsible.
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8 yr marriage that ended before you were 25?
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no...the marriage only lasted 1 year....I was 19 at the time....married a chick that was 24.....we both liked to party...only it was not until after we were married did I realize that she was not just partying....she was an alcoholic.

Then I busted her coming out of some dudes apartment.....called her everything but a white woman and called an attorney the next day.

as a friend of mine put it I was "young, dumb and full of cum"...pretty much sums up 95% of male youths at that age.

anyway I just walked away from it...took my clothes and what little I had....I had gotten my first CC and bought a bunch of stuff...new tv, furniture, shit for our apt....a damn dog...we bought a car...and I just walked away from it all just to get out....stopped paying the cc bills and car payments.....and had several collection agencies after me......bad choices really fucked up my credit for a long time.
 
Originally posted by: freesia39
It might not work.

When filing BK, your creditors are notified that you are filing and can contest it/show up in court. They can pull up your records to see what you've been spending, and then try to make a case in court that your intent was to get out of your student loans by taking out huge balance transfer checks, which can be considered fraud, and you're still stuck with the debt.

Your call.
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Excellent point. And the larger the debt, the more likely it is to happen.
 
Originally posted by: lokiju
Originally posted by: frostedflakes
Why do people always have to try to game the system? What happened to integrity? :|
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Here's a perfect example of that.

It amazes me how many people want to get out of what they knowingly signed up for.
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hey man, why u callin me out? why are banks and corporations allowed to get out with a bailout, knowing full well what they signed up for? i'm just asking for a little fairness by being the responsible party here.

i did take out a home equity however to pay off my student loans. the credit card idea seemed like a better deal though. may have to balance transfer that equity to a cc 😛
 
The way it used to work.

Go to bankruptcy court, perhaps the 10 - 20 banks you had credit cards with sent a lawyer, perhaps they didn't. If no lawyers (as was usually the case if you only owe < 10k on each card and have no job or low paying job) then judge looks over the application, MAYBE asks you a question or two (to which you answer "yes i am a loser" or "yes i have a big gambling problem"), and bingo, you're bankrupt. Wait 1 year and credit card offers start rolling in all over again.

Gee, wonder why so many banks went under.
 
I can't believe the number of people here who are saying they would take advantage of this. It's not about screwing the system or taking advantage of something, it's about your honor as a man or woman...it's about your integrity. I couldn't sleep at night knowing I defrauded someone, even if it's the bank that's rolling in the bailout dough. It still doesn't it make it right. I'm just surprised so few of you have honor and integrity. Society is doomed...dooooooommmmeeddd I say.
 
It would be extremely hard to get that debt discharged in bankruptcy court.

Now if you just default and dont go through bankruptcy, you will probably be taken to court and your wages eventually garnished. Debt collectors WILL go to court and get judgements on large sums of money.
 
you wouldn't be able to file right away, you'd probably have to let it ride for 6 mos before filing. now i'm not saying it's the right thing to do as i did eventually pay off my student loans 10 years after the fact, but if i were just out of college and couldn't get a job.......
it's not hard to get a loan after a bk, as i did file bk because i was young and stupid, but 2 yrs post bk i was back at ~760 fico
had all the credit cards i needed and was able to finance 2 cars @ 0% apr.
 
Originally posted by: venkman
Now, this is all completely anecdotal, so take this with a grain of salt. Anyways, students who got all of those credit cards in college, or even today, are taking out those balance transfer checks and cashing them out to their limits. They then spend all of that cash on their student loans, which cannot be defaulted on.

They then declare bankruptcy or just stop paying the CC.

Anyone do this? Why would someone want to kill their credit like that? Forget about ever owning a home.
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I have done that. Well not quite like you say... but when I was in college I needed to pay my tuition and could not get a student loan because I was international student. I just maxed out my credit card knowing I can't make the payments. However I paid all my credit cards my first year out of college... it certainly hurt my credit some... but it was worth it.
I am able to get loan now not because my credit score is high, but because of my income and ability to pay (zero late payments in the last 3 years).
As far as buying a home.. I just have to save for a down payment ... I don't think the bank will lend me without a down payment because of my credit score.
 
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