patrick.net

A often discussed dodge was to take your student loans (not dischargeable in bankruptcy), buy a house, HELOC it, pay off your students loans with the HELOC, default, then go through bankruptcy.

No more debt!

Did your co-worker roll all this debt into a new 1st, or a HELOC? If it's all 1st he may get the bank to approve the short sale. Any 2nd holders oftentimes prevent the approval of a short sale.

I think the main issue will be, is he in a non-recourse state or not?

And in California, if you refinance, bye-bye non-recourse. Only purchase money loans are non-recourse; anything else and the lienholders can indeed go after you for the balance(s).

When you say "rolled" -- what do you mean? e.g. did he pay off the loans with what would have been his down payment at the time of purchase? Or did he get a second mortgage/HELOC when values went up? The latter would be recourse in almost any state, although it depends on how the foreclosure is conducted and state law whether the bankster could come to him for a deficiency.

Bravo on the Idea. Recourse issue may come to play. But what an idea. Pay off student loans and then roll on the mortgage, or even better use credit cards instead (as an option).
Viola, student debt paid which could not be discharged in bankruptcy, magically goes away. If you are going to wreck your credit, at least get rid of debt that will not go away.

Morally, I find it hard to swallow. Financially, it's just business like the big boys do all the time. I would call it my "Hail Mary" of last resort. But everything is on the table when that time comes.

HERMAN BLAMES OCCUPY PEOPLE FOR NOT HAVING A JOBBIE!

Herman know GD well that when you get by the week, month or bi-weekly. That is called bonded servant - as defined by the jewish book. Blacks have been pissing in their pants laughing at people for that for years. Watching the bonded servant's shuffle back and forth to work. While people say they have nothing and can't get work. Now they got Herman.

You were in the Burger division at Pillsbury. Herman horses don't like you. Know what a horse laugh is Herman? Read the fine print. There is always fine print Herman. Believe me.

Herman you know damn well what a bonded servant is. Maybe the people without a jobbie. Just don't like being one. At least they are out of that.

It did make me uncomfortable. Watching everyone sing and dance. At the debatie last eve. Yep you all had jobbies last night. The very reason I get uncomfortable. Is that I just can't bear the sight of my fellow humans beings, being servants. Giving pony rides to the childern of the people they serve and their friends.

You used to ride on a chrome horse with your diplomat
Who carried on his shoulder a Siamese cat.
Ain't it hard when you discover that
He really wasn't where it's at
After he took from you everything he could steal ?

I'm with robbie dobbie: I hate that this kind of behavior takes place, but the "big boys" do it all the time, so why us working stiffs take advantage.

for a recent example of the "big boys" at work, check out this article where BoA "has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits..."

http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html

carloshdragnub@gmail.com

robbbie dobbie says

Bravo on the Idea. Recourse issue may come to play. But what an idea. Pay off student loans and then roll on the mortgage, or even better use credit cards instead (as an option).
Viola, student debt paid which could not be discharged in bankruptcy, magically goes away. If you are going to wreck your credit, at least get rid of debt that will not go away.

Careful though. If this is some sort of scheme to get around bankruptcy laws, then the bankruptcy court might have discretion to reverse a portion of the transaction. Talk to a bankruptcy lawyer.