Rbc Sues Md Student Who Dropped Out Due To Mental Illness, Thoughts?

[PurpleS]

http://www.cbc.ca/beta/news/canada/manitoba/rbc-sues-med-student-from-dauphin-1.4021823

[itsalwayssunny]

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[1994]

This is certainly a sad story. However, how did he spend $170K over two years (tuition being $14K)? Can't really ignore that.

[itsalwayssunny]

This is certainly a sad story. However, how did he spend $170K over two years (tuition being $14K)? Can't really ignore that.

It was unfortunately related to his bipolar disorder, he said (you can imagine a manic phase + access to LOC would spell disaster).

[feb1232123cba]

Here's my second thought- as medical students, we have a lot of collective power with the banks. They want our business. So, $&@* RBC. I plan on transferring my LOC to Scotia or another bank immediately, and making it clear to RBC exactly why I'm doing it (btw you are free to do this at any time, and there is generally nothing that locks you into your LOC). I know it's difficult to say if this same thing could have happened with another bank, and it may well be that it could have. I plan on also discussing with any new provider what their policy would be under similar conditions.

 

Its my understanding that RBC offers the best deal of all the banks. Just want to make sure you make an informed financial decision. For example, CIBC offers similar LoC terms, except once Loanee graduates-- interest rate jumps up to 5.7% - 8%. The RBC for example offers prime interest rate throughout borrowing and repayment periods. If by 4th year, LoC is maxed out, that would mean you're paying $8000 more in interest per year vs having borrowed from RBC. I used RBC and CIBC for example because I've looked at those two only so far. 

[MunHeon H.]

this is unfair. i think that if he was struggling with bipolar disorder, taking a break from medical school isn't a bad idea. but i don't think RBC had any sort of reasonable grounds to sue him for all that money he lost on the basis of tuition and mental illness. how is he going to find all that money?

 

my whole family and i are with RBC so this is disturbing.

[rmorelan]

Its my understanding that RBC offers the best deal of all the banks. Just want to make sure you make an informed financial decision. For example, CIBC offers similar LoC terms, except once Loanee graduates-- interest rate jumps up to 5.7% - 8%. The RBC for example offers prime interest rate throughout borrowing and repayment periods. If by 4th year, LoC is maxed out, that would mean you're paying $8000 more in interest per year vs having borrowed from RBC. I used RBC and CIBC for example because I've looked at those two only so far. 

 

actually they are on par with many of the other banks I definitely would not say RBC has any clear advantage. 

[BoopityBoop]

There was another story linked to that article about a senior citizen being sued by 3 different banks (TD, RBC, BMO) after being the victim of extortion by a scammer.

 

Near the end of the article, TD and RBC dropped the lawsuit and BMO even said they'd help her out, only after the news went mainstream and "Go Public" got involved. But before then they seemed to have cared less based on this:
 

Her family reported the crime to the banks she had borrowed from and provided evidence, including a police report that determined Ladhani was the victim of extortion.

 

They also gave banks her psychiatric assessment, which found Ladhani's cognitive functions and judgment were impaired while she was being extorted.

 

Despite being provided with evidence that Ladhani was the victim of crime, the banks went after the senior to get back their money.

 

I mean from a banks business point of view, I totally get it. Regardless if it's 1k or 170k - a loss is a loss.

 

If they can bully people to pay that debt back and those people aren't aware of services like "Go Public", many may try and pay it back some how. Even if it means coming out of retirement at the age of 80. It's also important to recognize that banks may also deal with more people trying to get out of paying debt using fraud or other tactics. But, overall, are banks tactics' cheap, unethical, and sly? Of course. But it's fair game in their world. It's not a one way street like it is for medicine. In healthcare, we are taught not to treat patients like crap even if they are treating you like crap. In banking and other industries they carry the, "You pull a fast one on me? I'll bury you one way or another" mentality. So it's not a surprise to me that banks would do this, and I think that mentality is one of my biggest reasons for not choosing a career involving finances or money.

 

Every decision any rational adult makes is a calculation. For us it's based on maximizing treatment effects, quality of life, and positive patient experiences. For them, the calculation primarily involves money. 

I'm sure their lawyers or whoever are furiously trying to find loopholes and caveats and vague policies and procedures that they can use to get the 170k. Or maybe they'll find it and publicly state that despite being able to pursue further charges they are going to drop the charges to appear "charitable" and "nice". But if not, they'll pursue the 170k from an ex-medical student with mental illness if they think it's worth the negative press/image.

Now they probably let that senior citizen off the hook because 17k, 8k, is pocket change for them and not worth the bad press. If it was millions of dollars, they may pursue it. What that threshold for action and pursuit is (despite the bad press), I don't know. I'm not in that world.

[Meridian]

I agree it is a sad situation. 

 

I do not view that RBC is doing anything wrong.   They are in the business of loaning money and they did so in good faith for a valid reason.  Without the banks offering these LOC,  a large portion of students could never go to Med school. 

 

The banks are not a charity.  They are also not responsible for people's health or choices, nor did they cause the issue.

 

For the bank to proceed to lawsuit, the student must have declared he will not even attempt to pay it back or come to some minimum payment term to show some goodwill.  Potentially the lawsuit is to force the student to take the step of Bankruptcy.  Maybe there is a car or other asset that he is unwilling to liquidate.

 

If there was disability insurance with the loan, the student needs to understand how that may or may help. I highly doubt it was loan forgiveness insurance.  Information on how that plays out would be valuable info for medical students. 

 

Anyone on this board with a current LOC have info handy and what the insurance covers (fine print) ?

 

I think there is more to the story.  He burned through $170K in 2 years at UofS where school and living costs should not be high.  It appears he maybe burned through $100K beyond reasonable expectations.   

[rmorelan]

oh so awkward for everyone. 

 

I mean of course the bank is going to want to recover its 170K - that is a huge amount of money and it is duly owed to them. You can only get so angry at the bank - it is a business after all. Not saying they aren't doing this completely correctly - they have to work with the student to come up with something (usually suing someone without any money is pretty clearly not going to work). They aren't going to look look in the media here. 

 

I am not sure about the rules with respect to his disability insurance. You have to make sure any insurance you get covers things that makes sense - for medical students/residents mental illness is actually a key area. We all need it and we all need to make sure it actually is suitable. If anything this an example of why that is so important. 

 

In the end the student is not going to be able to get away from this easily - the bank is not going to wave away a loan. They can work out some logical method of dealing with it though - something that allows him to recover.  

 

People wonder way banks usually don't give out all the money all at once. This is one of those reasons. 

[ralk]

1) This is not an RBC-specific thing. Any bank that gives out a private loan will expect it to be repaid unless discharged via bankruptcy. Even if a person died, they'd still try to collect from the person's estate and would only write off that debt if there was nothing left in the person's estate. So before everyone jumps on the "let's punish RBC" bandwagon, they're not acting any differently than any other banks or differently than they would with any other loan. I'm not with RBC, but if I were to become disabled, I don't doubt my bank would try to collect.

 

2) Along those lines, this case highlights the importance of real, independent disability insurance, not just insurance linked to a line of credit. In Ontario at least, medical student disability insurance is dirt cheap. It wouldn't erase the loans I've taken out, but it would provide a small monthly income to cover living expenses and keep debt reasonable. I'm not sure how the other provinces work, but I'd hope there are similar options. Every medical student should be arranging disability insurance, it's very important.

 

3) Bipolar wrecks finances. Rules around this are terrible and can lead to some very bad outcomes. Spend enough time in Psych and you see so many examples where someone threw their money away or just straight-up got taken advantage of while in a manic state. The main problem in this situation has nothing to do with RBC or medical school tuition, but with the recognition and treatment of bipolar disorder, as well as the legal ramifications for actions taken in a manic state.

 

4) The one aspect I will blame RBC for is how this guy got his LOC limit increased to $170k in second year. I have to cost-out my expenses every year to get my limit raised. It's not hard to do that for good reasons, but I would never have had a $170k limit available to me in 2nd year - heck, I don't have that now at the end of 4th year. For all the hoops I have to jump through each year to set my LOC limit, it's situations like this that make me glad I have to.

[JohnGrisham]

Its my understanding that RBC offers the best deal of all the banks. Just want to make sure you make an informed financial decision. For example, CIBC offers similar LoC terms, except once Loanee graduates-- interest rate jumps up to 5.7% - 8%. The RBC for example offers prime interest rate throughout borrowing and repayment periods. If by 4th year, LoC is maxed out, that would mean you're paying $8000 more in interest per year vs having borrowed from RBC. I used RBC and CIBC for example because I've looked at those two only so far. 

This isn't true as far as i know. It says at professional LOC level interests rate - Prime, whatever that is at the time. 

[JohnGrisham]

This is a very grey and complex issue - regardless, the bank lends you money, you owe it to them until discharged through bankruptcy and other means of paying it back. Plain and simple.

This is where disability insurance and other forms of insurance come into play. 

We don't know the whole story, so to automatically assume the bank is this big bad monster, is very unfair.

Don't forget the student should have had provincial and federal student loans too, so the real debt # is probably >200,000k for 2 years of school. 

Part of the fault also lies in giving the person access to all the funds from the get go in the first place.

Lots and lots and lots of variables, so be cautious on making a decision one way or the other (pro bank or pro student)

[JohnGrisham]

this is unfair. i think that if he was struggling with bipolar disorder, taking a break from medical school isn't a bad idea. but i don't think RBC had any sort of reasonable grounds to sue him for all that money he lost on the basis of tuition and mental illness. how is he going to find all that money?

 

my whole family and i are with RBC so this is disturbing.

A bank is a bank, not a counsellor.

 

You see the same thing in less sensationalist situations all the time - short term money loan centres, and just average families that are over-stretched too.  Single-mom, struggling with substance abuse, over-drafting on your debts, etc,  yet still expected to pay their debts.   Seems like people will draw a line from a more "social movement" stand point with similar baseline etiologies.

 

What if the situation was someone with a gambling problem?  

 

What about someone who gets a SCI? 

 

While the bank should definitely show compassion in terms of payment plans and timing... it isn't necessarily their  obligation to do so. UNLESS you have some sort of insurance through them, or have insurance elsewhere that can kick in. Of course bleeding dry can only get you so far if there is no means for payment.

 

It's a tough situation, and i'm more so providing a counterpoint to the immediate visceral bleeding heart reactions.  

 

(My opinion is somewhere in the middle, before i get vilified for even attempting to defend the bank)

[indefatigable]

Financially,  the line of credit does seem very high, there might be some level of forgiveness based on the credit given out in two short years.  Unfortunately, I don't think a bankruptcy would automatically discharge the student debt, but it might provide a negotiating tool.  

 

I agree that the bipolar illness is really at the center of the whole situation.  I'm just wondering whether all management/treatment options were explored, since this can't be the first case of a med student or resident in a similar situation.  

[itsalwayssunny]

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[itsalwayssunny]

A bank is a bank, not a counsellor.

You see the same thing in less sensationalist situations all the time - short term money loan centres, and just average families that are over-stretched too.  Single-mom, struggling with substance abuse, over-drafting on your debts, etc,  yet still expected to pay their debts.   Seems like people will draw a line from a more "social movement" stand point with similar baseline etiologies.

What if the situation was someone with a gambling problem?  

What about someone who gets a SCI? 

While the bank should definitely show compassion in terms of payment plans and timing... it isn't necessarily their  obligation to do so. UNLESS you have some sort of insurance through them, or have insurance elsewhere that can kick in. Of course bleeding dry can only get you so far if there is no means for payment.

It's a tough situation, and i'm more so providing a counterpoint to the immediate visceral bleeding heart reactions.  

(My opinion is somewhere in the middle, before i get vilified for even attempting to defend the bank)

It's my understanding (correct me if I'm wrong) that he had disability insurance. No one is expecting a bank to forgive an LOC otherwise. Banks make money on policy premiums, on average. They in turn assume some risk, which would seemingly apply in a case such as this.

[Arztin]

This is certainly a sad story. However, how did he spend $170K over two years (tuition being $14K)? Can't really ignore that.

edit. never mind. I might have misread.

[ellorie]

Bipolar disorder is a terrible illness in this way - people max out their credit cards and there is no real recourse after it's done.  The banks don't care why you did it.  If you're lucky, a family member takes your cards away from you when they see you heading up, if you're not lucky, you get situations like this, where you have access to a massive bank loan pretty much PRN and you burn through it and then are left to pick up the pieces.

 

Unfortunately while government loans usually have provisions for people unable to pay back due to disability, private loans are less generous.  Not sure that this is stigma related to mental illness - I am not sure what their policy is on inability to complete medical studies/work due to a sudden physical disability, but it may be similar.

[Intrepid86]

Being able to stick out 2 years of medical school suggests that this individual was high-functioning enough to have taken steps to mitigate some of the financial damage he inflicted on himself. Chances are he knew (or at least suspected) something was wrong way before he spent all that money. We can be sympathetic to the fact that he has Bipolar disorder, but the bank isn't wrong for going after him.

[ralk]

It's my understanding (correct me if I'm wrong) that he had disability insurance. No one is expecting a bank to forgive an LOC otherwise. Banks make money on policy premiums, on average. They in turn assume some risk, which would seemingly apply in a case such as this.

 

The description of the person's disability insurance is a bit confusing here. I can't tell if it's personal disability insurance similar to what I have, one which pays out a monthly sum if I become disabled, or if it's tied to the LOC and simply covers the cost of the LOC if disability occurs, which is more like debt insurance than true disability insurance. The former is what every medical student should have and we should all avoid the latter. In either case, it sounds like the student obtained debt insurance that only kicked in once they graduate, which is a huge mistake.

 

I don't mean to minimize the difficult situation this student is in, or absolve the financial industry of their often-times heartless actions, but I do want to point out that this situation is largely avoidable. Even with the incredible financial problems that can be caused by a manic state in bipolar disease, and assigning no blame to the student for their actions taken in that manic state, this result wasn't inevitable.

[ellorie]

Being able to stick out 2 years of medical school suggests that this individual was high-functioning enough to have taken steps to mitigate some of the financial damage he inflicted on himself. Chances are he knew (or at least suspected) something was wrong way before he spent all that money. We can be sympathetic to the fact that he has Bipolar disorder, but the bank isn't wrong for going after him.

 

I'd say that similar to psychotic conditions, troubles with insight are often part of severe bipolar illness.  Especially during manias.  There are incredibly high functioning people with bipolar who do incredible amounts of damage because the insight just isn't there, especially early in the illness course.  With a full on euphoric mania, you don't feel sick - you feel absolutely amazing.

 

We have no idea what happened - medications don't always work, and a bad bipolar 1 can be hell to get under control even if you are perfectly adherent with treatment and do absolutely everything you're supposed to.

 

There's a long way between "maybe something is wrong with me" and "I have a serious psychiatric condition that impairs my insight and impulse control and I am seeing my warning signs coming on so I'd better get somebody to hold on to my bank card." 

[567765]

I'm unsure of this guy's situation. But I think that he may not even have insurance on the student loan. I think your parents or co-signer have to pay monthly for you to have the insurance on the loan, then the insurance company pays the bank the amount you owe them if you can't continue school for whatever reason. I don't think he signed up for any insurance on his loan before he took out the loan with his mental illness. He can say he is of disability to the bank, but I'm not sure if banks will even care for that.

[rmorelan]

I'm unsure of this guy's situation. But I think that he may not even have insurance on the student loan. I think your parents or co-signer have to pay monthly for you to have the insurance on the loan, then the insurance company pays the bank the amount you owe them if you can't continue school for whatever reason. I don't think he signed up for any insurance on his loan before he took out the loan with his mental illness. He can say he is of disability to the bank, but I'm not sure if banks will even care for that.

 

the bank won't "care" - well more correctly they will care but still cannot do anything about it. The banks have to deal with this sort of thing all the time - a ton of sad situations are attached to their loans. Failed dreams, sudden heart breaking events, and any number of horribly sad situations all mixed in with frequent success stories as well. A bank that doesn't collect on its loans won't be a bank very long. Plus the only real way the could "forgive" things means the bank's risk are higher - the means they would have to charge more interest to cover that risk. It would be interesting to see how many people would accept higher interest rate to cover that (yes the banks will make money from you in the future but they do not on their LOCs - prime interest is by definition low return, and when you think about it the costs of the loan officer, running the program, marketing (including sponsorship), and yes dealing with the odd loan they cannot collect doesn't leave much. Plus they have other routes - each LOC is basically a mortgage - which has same or higher interest and actual collateral)

 

No bank wants to sue someone, or force bankruptcy. No bank wants to come off as the bad guy - both for business reasons (already in this thread people are saying switch from RBC - which I understand on an emotional level), and also moral reasons - you don't become a bank loan manager for professional loans so you can crush people. It is supposed to be a relatively happy rewarding job (your clients are happy, you get to go to the school and sponsor happy things, you are in effect part of a system that leads to helping a lot of people. People like seeing you - how rare is that for a banker?)

 

Again the situation sucks - people PLEASE consider your insurance needs. Any who has been around long enough has run into multiple examples of something like this. Each time I am reminded of how basic boring financial planning can protect everyone. Things like this really can happen to anyone. 

[JohnGrisham]

I of course agree with the above that the banks a business, and not doing this out of malice. I also agree (as I stated in 1st post) that we don't know all the details, and that quite possibly this could have been any bank. I don't intend to smear RBC. I suppose my other comments (re. making it known to RBC that this might hurt their business) just come from the heart. If there's any way that pressure can be applied in addition to the media exposure and associated publicity, then hey. Might help, might not, but maybe it will help this one guy out and also serve to clarify the rules that exist around disability insurance. Because I'm not sure if you've looked into it, but there are a host of loopholes that banks have used and continue to use to renege on insurance claims (I mean, we know this is true of virtually every insurance agency).

 

Anyways, I don't know if there's really much to be said other than that I truly feel for this young man's situation. It could be any of us. I will certainly be looking into the fine print of my own insurance tonight.

Again, these are not "loopholes". 

 

The default is that if you take a loan, you have to pay it back. 

 

The insurance aspect is SEPERATE from the bank loan itself. You get insurance, you get paid out, and use some of that payout to service your debt.