student loans in california

[sunshynny]

Hello,

I'm a lurker who will probably file in August or September. I'm still getting paperwork together. Anyway, I've searched the forum and found different answers to my question so I was wondering if anyone could help.

I'm filing in the central district - Santa Barbara. How will they handle my student loan? I really want to keep paying on it because I deferred it for so long, it will not be paid off for 6 years after I retire. I know I can call my lawyer and ultimately will talk to him about it but I just wanted opinions now.

Thanks.

[lrprn]

Whether your student loan can be included as a legitimate monthly expense on your forms depends on your trustee and the local customs in your bk court. The vast majority do not allow it because your student loan lender will suspend payments (but not the interest) during your 13. Paying your SL lender their full payment each month even if the payments aren't required is like a preferential payment to them that excludes your other unsecured creditors and gives them $$ that could be equally shared among them.

However, keep in mind that if your student loan holder files a claim, your trustee will pay them their unsecured % during your Ch 13 until it ends.

Also keep in mind that if your Ch 13 is well-written by an experienced Ch 13 lawyer, you may be able to find enough leftover income periodically to make a payment on your student loans yourself.

Talk to your lawyer - it's the only way to find out for sure how your trustee and local court handle student loan payments during active Ch 13s.