Private Student Loans Could Become Dischargeable!

It may or may not help some people. A high majority of the students in the past few years have had to have a cosignor on the loan...if the student files bankruptcy, then the onus is then place totally on the comaker.

So many lenders have left the private loan arena. This will make them impossible to get which in my thought could be good...it is going to force students to attend schools they can afford or actually save for their education.

Soaplady, you make a good point about cosigners. However, with the restoration of bankruptcy rights, borrowers may now be able to extract much better settlement offers rather than having to declare chapter 7. Though settling damages one's credit rating, this is not anyway near as bad as having a bankruptcy on you or your cosignors record.

Actually there could be less settlements...if the loan is in default and they see that the cosignor has the assets to pay the debt, they are less likely to settle....they will look at the hold credit picture...not just the borrowers.

Bankruptcy rights are you kidding me...how about you guys borrow what you CAN... I did...

I hope you guys realize the responsible payers are the ones who pay for this. The money does not disappear in lala land... the good gut in the middle always gets screwed by he dead beats.

Yet people who ran up their credit cards by taking vacations and buying HDTV's or accumulated gambling debts have these bankruptcy rights? While people who tried to further themselves with an education but had stumbled upon misfortune in the light of a predatory lending environment cannot. Makes perfect sense to me...NOT! Businesses can go bankrupt when investments don't work out. I don't see how this is much different. Anyway, I am sure many borrowers would be more than willing to pay back the principal owed with reasonable interest. However, when you have ridiculous late fees, collection costs, default fees added on to your private loan because one is unable to find a job in the greatest depression since the 1930's, it is almost as if bankruptcy becomes your only option to ever dig yourself out. By the way, private loans are not guaranteed by the govt...so your excuse doesn't fly. Banks who should never have lent out this money in the first place need to learn to swallow this loss. Hopefully, as SoapLady already mentioned, this will stem another loan crisis from happening again in the future.

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Should gamblers have bankruptcy rights? There will always be a minority who may abuse the system. Even so, is it fair to deny bankruptcy rights to borrowers who had a curve ball thrown at them? Should they have to suffer an entire lifetime trying to pay off a loan that can never be paid off? It is like sentencing an 18 year old who commited a misdeameanor or "made a poor choice" to a 50 year jail sentence. Surely there should be some penalty but lets be merciful and realistic here.

Gambling is usually a hidden addiction...education is not. Some of these students keep signing for more and more loans over the course of 4 years, a lot with the parents knowledge and/or cosignature. I have seen too many cases where after the first year they know the consequences and yet they continue to sign for the next 3 years. Maybe the parents are to blame more...