[tedivm]

Bankruptcies have to get approved by a judge, and often debt is restructured instead of being discharged. The scenario where someone takes on a bunch of debt then declares bankruptcy on graduation is a joke because judges wouldn't allow it. They may get their loan deferred or restructured to help buy time to get a job, but they wouldn't just discharge it like that. These kind of made up "what if" scenarios to justify broken laws are always weird to me especially when there aren't so far from reality.

[judge2020]

Neither of us are lawyers (based on your profile), but there are two modern forms of bankruptcy in the U.S: Chapter 7, liquidation which does discharge your debts, or Chapter 13, which is restructuring. In a chapter 7 bankruptcy, you have to pass the means test, which checks if your household income is below the median income of your state:

> The means test looks at the gross income of everyone in your household during the six months before you file. If your household income is below the median income in your state, you’ll qualify to file a Chapter 7 bankruptcy.

If it isn't, then the courts can force your chapter 7 case be converted to a chapter 13. But if someone, say, lives alone and still works at their minimum-wage job from college, I don't see anything else that would prevent a chapter 7 from proceeding.

https://www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy....

[tedivm]

Chapter 7 has an abuse provision which people also have to pass or the bankruptcy can be turned into a Chapter 11 or Chapter 13 (or gets dismissed outright).

To quote the law directly-

> After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, trustee (or bankruptcy administrator, if any), or any party in interest, may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts, or, with the debtor’s consent, convert such a case to a case under chapter 11 or 13 of this title, if it finds that the granting of relief would be an abuse of the provisions of this chapter.

11 U.S.C. § 707(b)(1)

[judge2020]

Do you know how often this has been used and isn’t some dead piece of law never cited (like a lot of law is)?

[nrmitchi]

I may have been unclear and didn't mean to imply there there was a rush of students declaring bankrupcy, thus this law made sense. The law is, in my opinion, stupid.

I was implying that education should never have been allowed to become so unreasonably expensive and unsustainable that it has to be propped up with special exceptions.