Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

> We should treat student loan debt like any other debt.

We should! There's no asset to secure the debt, so just mark the trade line as unpaid/collections and have it be a black mark for 7 years.

If Congress isn't going to fix this, Millenials can max out unsecured credit, pay off their student loans, and then go bankrupt on the unsecured debt; 7-10 years of bad credit is better than the federal government pursuing you for the rest of your life.*

* Not legal advice. Confirm with an attorney first if you attempt such a feat to ensure you stay within the law by doing so.

View on HN

It is much easier to obtain unsecured credit without prior student loan debt.

7 years for a bad decision made when you were 18?

That seems incredibly harsh.

Then again, you Americans really don't believe in rehabilitation do you.

Do other countries allow people to declare bankruptcy and discharge their debt without consequences?

The 7 year black mark is no one wanting to loan you money because you've shown you won't pay it back, and it's 7 years because the government says it can't be longer. It's not anything truly harsh like prison sentence or anything.

And yet, there's a growing industry of people who explicitly target the newly bankrupt (with high interest loans).

This is incorrect. Lenders are more likely to lend to you after bankruptcy, as you're not permitted to declare bankruptcy again for several years.

Now, if you're credit score is simply low due to negative marks from late payments or charge offs, yes, it's likely you won't be lent to again until you take action to raise your credit score (by making payments on time).

The american bankruptcy system is much more forgiving than most of the world, precisely because it allows the economy to be more flexible.

"Some countries keep failed entrepreneurs in limbo for years. Britain will discharge a bankrupt from his debts after 12 months; in America it is usually quicker. In Germany people expect it to take six years to get a fresh start, according to the commission; in France they expect it to take nine (see chart 2)." http://www.economist.com/node/21559618

So you can't buy a house before you're 25? Wow, cry me a river.

Reply on news.ycombinator.com