Ex-student off hook for $50K in loans

[Malibook]

I could see the additional $30k being absolved because the bank was extremely reckless and foolish at this point but the original $20k should remain.
The bankruptcy rules for student loans being discharged were increased to 10 years and then reduced to 7 years.
People who do not at least make an honest attempt to pay their debt should never have the debt discharged.

Thu Nov 19, 10:08 AM

NOVA.SCOTIA (CBC) - A Nova Scotia court has ruled that a former university student does not have to pay back tens of thousands of dollars he borrowed from a bank.
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Alfredo Abdo won his case in bankruptcy court this week, with the court concluding that the Royal Bank of Canada was at least partly responsible for what happened.

"I question whether advancing all that money at one time was prudent banking on the part of RBC," registrar Richard Cregan said in a written decision.

Abdo was a promising engineering student at Dalhousie University in September 2004. He had good grades, a scholarship and lived at home with this family.

In his second year, at the age of 19, he borrowed $20,000 from RBC through a student line of credit. He made bad investments online, according to court documents, and he accepted an offer from the bank for another loan of $30,000 to solve his problem.

Abdo started having dizzy spells. Finding his engineering program very stressful, he switched to commerce. But he dropped out of university in his third year.

The dizziness and social anxiety never went away, Abdo said, and therefore he couldn't work or pay back the bank loans. He filed for bankruptcy last November.

RBC argued that Abdo shouldn't be let off of the hook.

The former student, who lives with his mother, represented himself in court during a hearing in October. He asked to sit down when presenting his case.

Cregan said he believed the young man suffers health problems and has no job prospects, and he questioned why the bank loaned the $30,000 when it didn't appear to be related to Abdo's studies.

"I take it simply to be a loan to an immature 19-year-old investor out of his depth to temporarily solve a financial problem. RBC took the risk," Cregan wrote.

Abdo, now 23, was discharged from bankruptcy and is no longer responsible for the loans.

It's not known whether the bank will appeal.

http://ca.news.yahoo.com/s/cbc/091119/canada/canada_novascotia_ns_student_bankruptcy

 

[nolabel]

In terms of bail-outs, this is barely a drop in the ocean; more like a speck in the universe.

I often wonder about the kind of society that gets cranky about these kinds of cases, but otherwise allows golden parachutes and corporate bail-outs to get mostly a free ride.

 

[Malibook]

I am against the corporate bailouts and the people who stiff their lenders.

Compared to the Wall Street bailouts, everybody's debts are a speck in the universe but how is this relevant to anything?

 

[keepmovingforward]

that kid should not be off the hook for the initial amount.

 

[apprentice]

In terms of bail-outs, this is barely a drop in the ocean; more like a speck in the universe.

I often wonder about the kind of society that gets cranky about these kinds of cases, but otherwise allows golden parachutes and corporate bail-outs to get mostly a free ride.

amen say it again
stories like this make headlines, but the more serious problems lie elsewhere.

 

[Malibook]

Nobody is suggesting that this story should bump the Bernie Madoffs from the front page.
What does one have to do with the other?

 

[nolabel]

amen say it again
stories like this make headlines, but the more serious problems lie elsewhere.

Yep. It's like fatcats saying "heh, look over there" [ex student not paying all his loan back] while they line their pockets for as long as you're not looking. If only more would look at the real problem, not the diversion.

 

[Malibook]

If only more would look at the real problem, not the diversion.

Why not look at both?

There is no conspiracy to divert attention nor any logical reasons to connect this minor story with corporate greed and corruption.

This story could set a dangerous precedent and harm honest students who really need the loans.

People who don't consider this newsworthy should move along.
These aren't the droids you were looking for.

 

[Mencken]

Big difference between a government backed student loan and a line of credit granted by a bank. In the latter case it is like any other line of credit...the bank needs to do whatever due diligence it needs to do before approving it, and might expect some to fail. This sort of story is similar or typical of bankruptcies. So, if the law allows bankruptcy, so be it.

 

[Malibook]

Big difference between a government backed student loan and a line of credit granted by a bank. In the latter case it is like any other line of credit...the bank needs to do whatever due diligence it needs to do before approving it, and might expect some to fail. This sort of story is similar or typical of bankruptcies. So, if the law allows bankruptcy, so be it.

That's a good point.

I have no sympathy for people who don't at least make an honest attempt to pay their debts but I also have no sympathy for stupid lenders.

 

[nolabel]

Why not look at both?

There is no conspiracy to divert attention nor any logical reasons to connect this minor story with corporate greed and corruption.

This story could set a dangerous precedent and harm honest students who really need the loans.

People who don't consider this newsworthy should move along.
These aren't the droids you were looking for.

Bar humbug. Of course the story is newsworthy, but all that proves is that the news outlets will run anything to get some small seconds of your attention. This incident won't harm students getting loans, because banks everywhere will continue to give loans, based on their risk assessment practices. If anything, it might be a precedent for banks not to be stupid about it, as the Judge seemed to find in this case. Isolated case, move along, young paduan.

Meanwhile, as folks waste their energy bothering with this case, fatcats in the corporate sector continue to rape economies and solicit their golden parachutes. It is all that is left unsaid upon which tragedies are built, said the jedi to the paduan.

 

[Aardvark154]

First this is a highly unusual case - most people don't have legitimate medical conditions that prevent them from working.

Secondly this was not a "Student Loan"* almost all of those are bankrupcy proof. They say that both death and taxes are certain, well a third is having to make a good faith effort to repay student loans.



Although indeed it was a loan to a student.

 

[Malibook]

This incident won't harm students getting loans, because banks everywhere will continue to give loans, based on their risk assessment practices. If anything, it might be a precedent for banks not to be stupid about it, as the Judge seemed to find in this case.

The banks would be wise to err on the side of caution which would hurt a lot of marginally worthy students.

 

[Gyaos]

Although indeed it was a loan to a student.

A dropout. What about the grads?

 

[WhaWhaWha]

I've seen some grads still paying their student loans until their early thirties. Where's their bailouts? This kid will learn nothing from this except it's safe to borrow and bail.

 

[Scarey]

Hear that?

I can hear the appeal and judge being put in place for the next trial right now........

 

[Gyaos]

I've seen some grads still paying their student loans until their early thirties. Where's their bailouts?

LOL. I've seen MUCH older.

Gyaos Baltar.

 

[Cassini]

I have no sympathy for people who don't at least make an honest attempt to pay their debts but I also have no sympathy for stupid lenders.

The lenders have to be held responsible for blatantly stupid loans. Otherwise, they just give away money like water, which is very bad in so many ways. Importantly, it is bad for the financial system, and causes worldwide recessions. Speaking for myself, I don't want the banks causing another recession/depression/great depression. I rather like having a job in a stable economy.