creative financing

Justin Schwartz jkschw at hotmail.com
Wed Apr 18 22:25:44 PDT 2001


I'm an attorney. This is not legal advice, since we are discussing a purely hypotheical situation, as you emphasize. Now, exploring the dynamics of our political-financal system is fine. But anyone who thinks it might be a good idea to get out of student or other loans undischargeable in bankruptcy by running up (dischargeable) credit card bills he has no intention of paying, and then strategically declaring bankruptcy, ought to make a careful study of the federal sentencing guidelines. There is no parole in the federal system, I should add, and bankruptcy fraud is also a federal crime. You really don't want to try to present the analysis you suggest to the US Attorney or to a federal jury. It's not a defense to fraud. It's a ticket to prison. Don't commit federal crimes, it's a really bad idea.

--jks


>
>>Credit fraud is a crime, as is mail fraud and wire fraud. I'd advise
>>aaginst committing it. You can go to jail. --jks
>
>Now, now Justin: despite painstaking efforts to assure that I was
>engaging in an Abstract Thought Exercise, you're just determined to
>read it as a practical query. But exploring the dynamics of our
>political-financial system is one of lbo-talk's raisons d'etre and in
>that spirit I invited theoretical analysis of a fascinating
>confluence of social facts.
>
>Social fact 1: credit card companies are currently thrusting
>exorbitant credit limits upon segments of the population.
> For instance I regularly receive unsolicited "rewards,"
>amounting to tens of thousands of dollars of credit, for my
>"financial responsibility." After getting their approving dad-like
>pat on the head I get the siren songs, of the dream vacation in Bora
>Bora that I uniquely deserve, the house addition to that'll make me
>complete, etc. (Of course what they won't tell me, have killed
>congressional proposals trying to make them tell me, is how many
>years at their interest rate it would take to pay back my carpe diem
>expenditures.) They've sent me all these credit increases at the
>same time that my income has almost qualified for Earned Income
>Credits.
>
>Social fact 2: the present structure of higher education makes it
>increasingly likely that students, especially graduate students in
>humanities and social sciences, will accrue enormous student loan
>debt.
>
>Social fact 3: institutional structures (to say nothing of moral
>ones) mitigate strongly against reneging on gov't student loans.
>
>Social fact 4: the student population likely to be highly indebted by
>gov't loans correlates highly with the segment of the population
>receiving high credit limits from the bottom-feeding credit card
>companies.
>
>This array of social facts present interesting material for social
>analysis. My theoretical understanding of the finance system and
>its mutual imbrications in the sociopolitical realm would be enlarged
>if anyone here could indicate possible institutional factors or
>regulatory procedures that might mitigate against the elective
>affinity I perceive here between the confluence of social facts
>enumerated above, and the possibility of a segment of the student
>population choosing to pay off their gov't loans via the funds made
>available by their credit cards, after which they might subsequently
>and regrettably feel compelled to file for bankruptcy.
>
>inquiring social analytical minds wanna know,
>Maureen
>
>

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