Paying off federal student loans with credit cards thereby taking the gov’t out of the picture if charged off?
If one pays off federal student loans with a credit card, and then is delinquent on the card and the creditor charges it off…..
May the card issuer get the IRS to pursue the debt on its behalf as this debt was originally a federal student loan?
OR
Does the fact that they were federal loans not matter since the loans were paid off through the card and the lender of the loans, its gaurantor and the IRS are now OUT of the picture, as it became a regular credit card debt, in which case one would ONLY have to deal with the card issuer (and its collectors) as any other credit card debt?
I know that crad rates are higher and that consolidation of loans is good. I have already done that.
I am NOT interested in all that.
I only want to know what may happen once the card that was used to pay off federal student loans is charged off?
Is it like any other card charge off or not.
Does someone have EXPERIENCE with this?
i’ve heard this as a recommended course for people who graduate with a few hundred thousand dollars of school loans – just pay them off with unsecured debt and claim bankruptcy.
not sure if it would really work, but it seems a bit too easy to be true. if you could do this, then everyone filing bankruptcy would do it. i think the likely result is that a bankruptcy judge would not excuse any debts on credit cards that were full of student loans, so you’d still end up owing the money – just at 30% instead of 6%.
