It seems like having a bankruptcy on your credit report for the next seven years would be disincentive enough, especially now when everyone from the phone company, to your landlord, to your employer may look at your report.
...why wouldn't I just borrow every cent I can without even intending to pay it back?
(or this judge's decision won't become universally applicable, or the law will be changed to circumvent it)
It might be possible to declare bankruptcy a year or two before graduating still. Not sure what employers would make of it. Maybe they'd like the mercenary attitude.
This is basically the entire point.
What do you think at the moment stops graduates taking out a credit card, blowing 100k on it on holidays and then declaring bankruptcy? The same fraud laws as would stop you from clearly never intending to pay off your student debts.
Landlords aren't in the business of providing housing for free, and seek restitution for damages and unpaid rent through the courts. A low credit score or bankruptcy shows that a potential tenant could incur significant damages and unpaid rent, and leave the landlord high-and-dry when the bill comes due.
In today's owner's market, there are plenty of other potential tenants without a poor credit history or bankruptcies.
Aka. bankruptcy vs bad credit, not compared to a good credit score.
Many landlords are loath to rent to recent graduates, those with poor credit and a history of bankruptcy. It's an owner's market, and someone who checks all three risky boxes will be skipped over for another tenant who comes with less risk.
Credit card issuers actually target recent bk's since they have no debt. :)
They're also ignoring medical debt, since otherwise a large percent of their applicants would be rejected.
Of course the other two issues are that such a "retributive" system of treating debtors with a scarlet letter isn't productive even if it appeals to a sense of "fairness" to those who pay. Second, the reason banks don't care about old bankruptcies isn't anything high minded but because they like money and can make it if they don't pass them up.