Debt Free

I noticed this story on SoCal Law Blog, about a young lawyer convicted of fraud for using a credit card scam to pay his way through law school.

When I graduated law school just a few years ago, there was a lot of talk about young lawyers declaring for bankruptcy to have their law school debts erased. Then they could waltz into some big firm making many Gs and not have the debt to repay. I'm not sure if anyone actually did it, but I know that some employers and some state bars were doing credit checks.

It's an interesting idea though. If businesses can use bankruptcy to "restructure," why can't enterprising young attorneys? Not that I know much about bankruptcy, of course.

9 comments:

  1. I've been told that federal loans do not get discharged through bankruptcy (although I don't know if that's the same for all educational loans, or just the government ones). Which is a total bummer.

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  2. Well, I do know one thing. Federal student loans are cancelled upon death.

    That has to be a starting point to a good scheme somehow.

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  3. OK maybe this dates me.

    My state used to really believe in higher education. We also used to have a lot of oil money. I paid a whopping $4.00 per semester hour to attend all of law school.

    My average bill for tuition/fees/books was about $700-$1000 per semester when I attended law school.

    Talk about a state welfare system.

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  4. Federal loans arent' discharged through banrupcy. But the guy got a big firm job, a lot of credit from the credit card companies, used their "convenience checks" to pay off the loans, and then declared bankrupcy. Viola. Student loan debt gone.
    That was a problem when I was getting admitted into the bar and was asked repeatedly about this issue during the interview.

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  5. "Why can't enterprising young attorneys?"

    Because it would be a sneaky, lying, unethical way to get out of a debt. The school loan was a promise to pay the government back later, when the law student could better afford it. Based on that promise, the government advanced educational funds.

    Any lawyer who tries to get out of paying back such a loan is a liar and a cheat, and should be disbarred. Then prosecuted.

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  6. But the enterprising young attorney DID pay his loan back, but through the use of credit cards. The government is not being cheated at all, they got their dough. It's the credit card companies, the ones that charge you fees for doing anything, that are getting cheated presumably. It's the same thing as any major airline or any company filing for banrupcy and getting out of it.

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  7. I agree. All school loans should be payed. It is the persons responsibility to the govt. Otherwise, he won't get the education he/she got.

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  8. I agree. All school loans should be payed. It is the persons responsibility to the govt. Otherwise, he won't get the education he/she got.

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