BANKRUPTCY ATTORNEY CALLS FOR BOYCOTT OF STUDENT LOANS
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BANKRUPTCY ATTORNEY CALLS FOR BOYCOTT OF STUDENT LOANS
Urges students to charge educational costs on credit cards since they would be dischargeable in Bankruptcy
For Immediate Release – Thursday, November 4, 2010
Contact: Mike Greiner – 586-693-2000 * mike@financiallawgroup.com
Warren, MI – A prominent Detroit-area Bankruptcy attorney is urging a national boycott of student loans. Instead, Attorney Michael Greiner, urges students to charge their educational debts on credit cards – debts that unlike student loans, would be dischargeable in Bankruptcy.
“The next big debt crisis our nation will be facing is the student loan crisis,” Greiner said. “People are coming out of college with so much debt that they have no way to pay it back with the jobs that are available to them.” Students can have $40,000 in student loan debt or more.
Student loans typically don’t get discharged in Bankruptcy. This protection is afforded not just to the federally-backed student loans, but even to private student loans which often charge credit-card interest rates.
“The protections that Congress has given to these student loan issuers are unacceptable,” Greiner said. “The only way we will change this system is to refuse to participate in it.”
Instead, Greiner is urging students to charge student debt onto credit cards. “With these private student loans, students often pay interest as high as on credit cards,” Greiner said. “At least credit cards are dischargeable in Bankruptcy if the student is unable to afford the payments.”
Greiner has seen an increase in graduates looking for relief from high student loan payments. “Unfortunately, there is nothing I can do for these folks,” Greiner said. “Some student loans allow for deferrals in payments, but while you’re not paying, the interest keeps going up. A few deferrals will double or triple the total amount of debt a recent graduate has.”
Key points to bear in mind:
- Student loans – whether they be government or private — are generally not dischargeable in Bankruptcy. That means that even if a person owing student loans files Bankruptcy, he or she would still owe that debt. On the other hand, credit cards used to pay educational costs are typically discharged in Bankruptcy.
- Even if a parent pays for a child’s education, those student loans would be non-dischargeable in a Bankruptcy case. As a result, parents should use credit cards to finance a child’s education.
- It is important that when an individual charges educational debt on a credit card, those charges never be made with the intent to discharge them in Bankruptcy – that would be considered fraudulent. However, there is nothing wrong with staying away from student loans due to the fact that if the person is required to file Bankruptcy sometime in the future, those debts would be non-dischargeable as opposed to credit cards which would be discharged in a Bankruptcy.
Greiner is the founder and President of the Financial Law Group, P.C., a Detroit-area law firm specializing in Bankruptcy. He has represented hundreds of individuals, businesses and creditors in Bankruptcy. He is also the writer of the recently-published Bankruptcy 101: An Insider’s Guide to Filing Chapter 7 Bankruptcy on your own without an Attorney, and he is the creator of the website myeasy7.com which assists individuals in filing Chapter 7 Bankruptcy without an attorney.
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