Dead Man's Debts
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07-07-2016, 07:36 AM
RE: Dead Man's Debts
This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

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07-07-2016, 09:02 AM (This post was last modified: 07-07-2016 10:53 AM by Full Circle.)
RE: Dead Man's Debts
(07-07-2016 07:36 AM)Vosur Wrote:  This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

They don’t need to be labeled as careless imo.

I just don’t understand why it is that some people (yeah, I said it) think that a financial contractural obligation they freely enter into should be abandoned or dissolved because of (insert reason here).

This is the kind of thinking that destabilizes markets, free trade, social contracts and social compacts, increases interests rates for everyone else and makes it more difficult to transact business. I hope everyone realizes that every service provider and retailer has to build into their price structure the uncollectables, in other words we all pay in higher prices, insurance premiums, medical bills etc. more because of the very thinking in the OP.

I know everyone has a personal horror story (see OP) regarding what those evil service providers, lenders, retailers or whoever did to me. I get that, it happens to me too. That’s why we have courts, big and small claims. But to suggest that debts cease to exist because the primary borrower is deceased while the co-signer is still around is shirking financial responsibility.

The people who provided the services, the professors and the school entered into the contract with the student with the understanding that they would educate for a fee, not for free. They met their end of the bargain didn’t they? They too have bills to pay. Why shouldn’t they be properly compensated as agreed? Huh

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08-07-2016, 09:35 PM
RE: Dead Man's Debts
(07-07-2016 07:36 AM)Vosur Wrote:  This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

Careless?

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08-07-2016, 10:21 PM
RE: Dead Man's Debts
(07-07-2016 09:02 AM)Full Circle Wrote:  The people who provided the services, the professors and the school entered into the contract with the student with the understanding that they would educate for a fee, not for free. They met their end of the bargain didn’t they? They too have bills to pay. Why shouldn’t they be properly compensated as agreed? Huh

We both know that the educational institutions have been paid in full. That is the entire point of a student loan. The debtholder in question is the State of New Jersey and its financial backers.

(07-07-2016 09:02 AM)Full Circle Wrote:  I just don’t understand why it is that some people (yeah, I said it) think that a financial contractural obligation they freely enter into should be abandoned or dissolved because of (insert reason here).

This is the kind of thinking that destabilizes markets, free trade, social contracts and social compacts, increases interests rates for everyone else and makes it more difficult to transact business. I hope everyone realizes that every service provider and retailer has to build into their price structure the uncollectables, in other words we all pay in higher prices, insurance premiums, medical bills etc. more because of the very thinking in the OP.

I know everyone has a personal horror story (see OP) regarding what those evil service providers, lenders, retailers or whoever did to me. I get that, it happens to me too. That’s why we have courts, big and small claims. But to suggest that debts cease to exist because the primary borrower is deceased while the co-signer is still around is shirking financial responsibility.

Everything that you say here is true, but it is not the whole truth. The article in the OP is about a rather specific instance of one agency that seems to have gone to extremes that others have not. Most creditors will write off this sort of debt. Spending the next 8 years rubbing salt in a grieving mother's wounds with a monthly bill is precisely the sort of behaviour that generates the sort of negative PR that a wise company avoids. You'll note that the federal agencies wrote off their loans.

What makes this interesting is that it highlights how the legal fictions that are corporate entities allow us to divorce our money and power from our sensibilities and responsibilities. Consider:

- If you were an individual with a ~$2 Billion loan program would you even hesitate to write off a small minority of those loans for compassionate reasons? Your ROI will drop slightly but you will still make a handsome sum and you will not end up in the poor house and you will not increase the agony of a number of people who are already suffering greatly.

- Yet if you are an investor in this ~$2 Billion loan program apparently you demand the highest possible return regardless of the human cost. Most likely you do this at several steps removed through a variety of funds and investment tools, only ever vaguely aware of how your money is being used and more fully focused on how much of a return you are getting on your buck.

You would most likely object to this behavior if you were aware of it. Consequently, steps are taken to help ensure that your conscience is rarely troubled. If it were you might take your money elsewhere.

What makes this particular case especially loathesome is that the agency in question is state run. In principle, the state is supposed to serve its constituents first and foremost. Yet it is the power of the state that is being wielded against the constituents for the benefit of the investors. Granted, the state as a whole will pay a lower rate to the investors because of their excessively diligent collections policies but one is left wondering exactly how much of a benefit was realized by the state as a whole and at what cost to the individuals. This particular instance sounds a great deal more like the state is much more eager to help the investors.

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09-07-2016, 02:15 AM
RE: Dead Man's Debts
I can understand why this woman's trying to get out of repaying her late son's debt, but unfortunately she did sign as guarantor and presumably knew her responsibility as such. So legally the debt liability falls on her. In Australia, state-funded student loans are financed by the taxpayers (in the US too?) so unrepaid student loans would be borne ultimately by taxpayers—which is obviously an unfair financial burden considering the number and dollar value of these types of loans.

Also in Australia, any outstanding debts incurred by a now-deceased person are taken from the value of their estate—prior to the disbursement of any funds from their will. Which, again, is only fair to creditors (such as the state).

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09-07-2016, 03:04 AM
RE: Dead Man's Debts
(08-07-2016 09:35 PM)Paleophyte Wrote:  
(07-07-2016 07:36 AM)Vosur Wrote:  This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

Careless?
Yeah. Unless she didn't read the contract before signing it, she knew fully well that she would have to pay it off by herself in the even that the other signer is unable to contribute their share for whatever reason (e.g. bankruptcy or death). Wouldn't you say it's careless to sign a contract like that, knowing that your financial situation is insufficient to take care of the loan on your own?

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09-07-2016, 04:33 PM
RE: Dead Man's Debts
(08-07-2016 09:35 PM)Paleophyte Wrote:  
(07-07-2016 07:36 AM)Vosur Wrote:  This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

Careless?

She was careless in her choice of lenders. Mafia don't forgive debts.

#sigh
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09-07-2016, 04:35 PM
RE: Dead Man's Debts
(07-07-2016 07:36 AM)Vosur Wrote:  This woman shouldn't have co-signed these loans if she wasn't prepared to abide by the terms of the contract. As harsh as it may sound, I don't think people should be saved from the consequences of their own careless financial decisions.

So you're not a big fan of all the relief Trump has received from bankruptcy protections.

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09-07-2016, 06:06 PM
RE: Dead Man's Debts
(09-07-2016 03:04 AM)Vosur Wrote:  
(08-07-2016 09:35 PM)Paleophyte Wrote:  Careless?
Yeah. Unless she didn't read the contract before signing it, she knew fully well that she would have to pay it off by herself in the even that the other signer is unable to contribute their share for whatever reason (e.g. bankruptcy or death). Wouldn't you say it's careless to sign a contract like that, knowing that your financial situation is insufficient to take care of the loan on your own?

Please read the entire article Vosur. The lady in question has not defaulted on the loan that she co-signed. Her financial situation is not insufficient. This isn't about the money, it's about the suffering.

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09-07-2016, 11:49 PM
RE: Dead Man's Debts
(09-07-2016 04:35 PM)GirlyMan Wrote:  So you're not a big fan of all the relief Trump has received from bankruptcy protections.
Of course not. I think both individuals and corporations should suffer the full consequences of their financial decisions.

(09-07-2016 06:06 PM)Paleophyte Wrote:  Please read the entire article Vosur. The lady in question has not defaulted on the loan that she co-signed. Her financial situation is not insufficient.
While I never said that she defaulted on the loan, you're right that she is able to pay it off on her own. I must have confused her story with the one mentioned later in the article ("As a co-signer, Tracey Timony struggled to help pay off her daughter’s $140,000 in loans." and "'I never thought that sending my daughter to college would ruin our lives,' Timony said.")

(09-07-2016 06:06 PM)Paleophyte Wrote:  This isn't about the money, it's about the suffering.
That's not the impression I got from reading the article. She says it's "unfair" that she has to pay back the loan, but it really isn't. It sounds to me like she thinks that she's entitled to shirk the responsibility of holding up her end of the contract she co-signed.

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