Question: Thanks to Mr. Woodcock for the correct terminology. Anyway, two law review articles discuss the full/partial discharge issue: Milligan, 34 U.C. Davis L. Rev. 221 (2000) and Pashman, 44 NY L. Rev. 34 (2001).

I believe it is Milligan, who argues that the discharge exception should be abolished altogether while Pashman feels that the goal of bankruptcy was a “fresh start” and should be applicable to student loans.

Notwithstanding these two arguments, assuming you could discharge your student loans, you’d have to suffer under the slavery of paying off student loans for SEVEN YEARS, before even making an attempt at filing for bankruptcy.

So why bother with filing a bankruptcy. Just move the hell away from America. Like someone mentioned earlier, the list of countries where english is spoken is numerous. And many I might add, have beautiful white sand beaches.

Of course, there are two other avenues you could use to avoid student loan debt. These will get you even into more debt and are quite risky. The first is you buy a house. Let the equity on the house appreciate for five years, then refinance and take out another loan against the equity of your home. Transfer all your student loan debt to this new loan. The debt no longer is educational and becomes a “consumer debt.” Then you file for a regular chapter 7. If you really want to get sick, you might be able to keep the house and the equity that appreciated under it through the homestead exception! The second is a business loan. Set up a dot.com and borrow enough to pay off the educational debt. Again, the debt becomes a commercial loan. File a chapter 11 reorganization or chapter 13.

Answer: Well, you’ve got me chuckling. Not because you’re not right. The system definitely does penalize those of us who did not take out credit card cash advances to pay off our student loans, when we had ample opportunity to do so. Judges in this area generally seem to be jaded, to have lost contact with the possibility that many (never mind a majority of) student borrowers are not scam artists. But as I say, you’ve definitely described one option, for the person who knows better than to have faith that a court will reward the honest borrower. Congress and the courts have adopted an “us versus them” attitude, and I bet that, in future years, an increasing number of student borrowers will play the game according to the rules handed to them — that is, they will abuse the system because that’s the only way in which they can be confident of getting out alive.

Let’s put it this way: if you’re more likely to be able to afford an attorney before filing bankruptcy than after, then you’re naturally more likely to put more energy into “pre-bankruptcy planning” (the accepted corporate euphemism for doing what it takes to get the result you want in bankruptcy court) than into the post-bankruptcy litigation. That would be true even if courts gave you a fair shake in the latter context; it is likely to be much more true when they don’t. In other words, the shrewd operator will probably realize that it pays to work from a position of strength, rather than coming to the court later with hat in hand, hoping for a break.

To me, this is a retarded situation. Everyone knows that you tend to drive in the direction where you’re looking. If you think you might have to file bankruptcy at some point — a normal worry in a huge number of American households — and if you hear that getting real relief in bankruptcy court may be a matter of getting your ducks in a row months (or even years) before actually filing, well, I’d bet that a fair number of people are going to prepare themselves just in case they might have to file bankruptcy sometime down the line; and this, in turn, increases the odds that, when the shit finally does hit the fan (as it does for almost anyone, at one time or another), the bankruptcy option is going to look pretty tempting.

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