Student Loans during Chapter 13

[lolly78]

Hello, I came across this website today and have gotten so much great info! My husband and I are very close to filing chapter 13. I start grad school on Monday. My loans for the next six months have been awarded, not yet disbursed. Although I hate to incur additional debt considering I would be debt free in five years if I don't go back to school, I do feel that continuing my education is in my best interest at this time. My question is this: Does anyone foresee the trustee having an issue with me taking student loans? Also, would they have an issue with me receiving financial aid refunds as well?

Secured Debt: $262,000, includes 1st and 2nd Mortgage and auto loan
Unsecured Debt: $92,000
Current Student Loans: $26,000

[Pandora]

your student loans will be deferred until your Ch. 13 plan is completed (as far as payments go).

Wow - debt free in 5 years vs. filing BK now because I wanted to go to school at this moment? Hmmmm.... tough call, but if it were me, I'd go to school after I paid off all the debts myself. If you have the means to do so, filing bk will just put you at 100% payback anyways from what you've written - so its a wash.

Think long and hard before pulling that BK trigger - and prioritize your "wants" and your "needs".

Good luck!

[lolly78]

I'm not filing because I want to go back to school, I'm going back to school regardless. I'm filing because we cannot see the light at the end of the tunnel with all this debt. My house is under water and we can no longer keep up with all the minimum payments on the credit cards and personal loans (some of which nearly doubled for no reason). If we continue the way were going, we'll never get out of debt. I'd rather bite the bullet now and be out of this mess in 5 years. My attorney is including my current student loans in my plan. He is also stripping my 2nd mortgage which is $44k. Also all my back taxes will be included as well. He said that the unsecured creditors would be paid at 50%. I am current on my first mortgage so that and my vehicle will not be in the plan, I'll continue to pay those.

[Pandora]

I'm not filing because I want to go back to school, I'm going back to school regardless. I'm filing because we cannot see the light at the end of the tunnel with all this debt. My house is under water and we can no longer keep up with all the minimum payments on the credit cards and personal loans (some of which nearly doubled for no reason). If we continue the way were going, we'll never get out of debt. I'd rather bite the bullet now and be out of this mess in 5 years. My attorney is including my current student loans in my plan. He is also stripping my 2nd mortgage which is $44k. Also all my back taxes will be included as well. He said that the unsecured creditors would be paid at 50%. I am current on my first mortgage so that and my vehicle will not be in the plan, I'll continue to pay those.

I'm confused I guess - in your first post you stated that if you didnt go back to school now (and incurred that debt) you'd be out of debt in 5 years..??? Its a bit confusing

Does your district allow for student loans to be put into your plan for payment? Most Ch. 13's require the student loan get deferred because that money can go to pay creditors, so make sure you know 100% how it works in your area.

Be aware that what your attorney proposes for payment can be changed, its just a "guesstimate" - close, but definitely can change (ous did). We stripped our 2nd - was quite the ordeal to get where they finally agreed, but we did it (or are doing it I should say).

Good luck to you!