Sticky Situation: Possible to file for CH 13?

[TheCraft]

I'm in a very sticky situation... like a catch 22. I'll try to keep it not TLDR.

On 12/12/12, I was injured at work. Received work comp and then was fired on 2/15/2013 due to my injury.

Since my firing, I was able to still collect work comp due to not being cleared for work and needed surgery. Work comp discontinued benefits/wages on 5/7/2013.

I currently have a court date to get benefits re-instated on 6/13/13 -- but since then I have no income.

I have a lot of debt from credit cards and private student loans... and I want to file for Chapter 13 to get a hold of the chaos. But I keep hearing from different Bankruptcy attorneys and from researching online that I cannot be able to file for CH 13 because I do not have a steady income. I'm trying to get unemployment, but that has proven to be unsuccessful, even though my doctors have stated that I am not fit for work.

I have a summary judgement that I will attend to tomorrow in court to see if I can get it pushed to a trial date to buy me more time.

What are my best options? I can't afford to file CH 7 as it would wipe out a huge chunk of money I'm using to pay bills and pay rent.

Just seems that I can't get any help thanks to my work injury and losing any sort of income I had.

Thank you for listening.

[LadyInTheRed]

But I keep hearing from different Bankruptcy attorneys and from researching online that I cannot be able to file for CH 13 because I do not have a steady income. I'm trying to get unemployment, but that has proven to be unsuccessful, even though my doctors have stated that I am not fit for work.

That's true. A Chap 13 without steady income is doomed to fail.

What are my best options? I can't afford to file CH 7 as it would wipe out a huge chunk of money I'm using to pay bills and pay rent.

Have you stopped making your credit card payments? If not, stop now and save the money for attorney fees. You could also check to see if legal aid is available for BK in your area or consider filing pro-se if you think you are up to the task. But, if you are unable to save for attorney fees while not paying your CCs, then you need to improve your financial situation before you file for BK. Do you have any significant assets? If not, there is not much a creditor can do.

[TheCraft]

Thanks for your response.

I haven't had any credit cards since 06/07 but they are still there as debt, but no collection has gone my way. The only thing I'm dealing with as far as lawsuits go is with private student loans (Sallie Mae) as I couldn't afford their high payments per month after jacking up interest rates and were no longer able to work with me on lowering payment. I have one summary judgement tomorrow morning to defend in court and a court trial for another one in August (which I defended from a summary judgement all by myself).

I have no significant assets. I don't own a home. I rent a townhome per month. I own a car with nothing owned on it.. value is around $2-3k used. I don't owe any land or mortgages or anything. I'm not medically clear for work and cannot get a job due to the fact that I'm a liability to another employer if I don't get my neck surgery... they won't hire me due to that fact. Money is running out (from older work comp payments saved) and I will soon be homeless from the looks of it.

My main worry is freezing my bank account, but I will just have to pull that money out and find someway to live on cash. My work injury and being fired because of that has really made everything else spiral out of control. Wrongful termination lawyers say I have no case to file against my employer because by law they can fire me for a work-related injury or if I was on short/long-term disability.

It seems that no lawyers or bankruptcy lawyers want to listen to my case -- I've gone through dozens of them in my metro area... there HAS to be something that can be done so I can get a grasp on things. Thanks for letting me vent... and thanks for listening.

[LadyInTheRed]

Based on my quick Google search, the statute of limitations in Minnesota is 6 years. So, it sounds like your cc debts are close to or past the SOL. If any of them decide to sue you, you would have to file an answer alleging the expiration of the SOL as an affirmative defense.

Student loans are not dischargeable in bankruptcy unless you can show they are an undue hardship. If you are permanently disabled, you should talk to an experienced BK attorney specifically about getting your student loans discharged based on undue hardship. A lot of BK attorneys will probably simply say they are not dischargeable. So, you need to keep looking. When you call attorneys, ask right away if they have experience getting discharges of student loans. If you can't get the loans discharged, I don't think BK will be of much use to you.

You may be able to avoid garnishiment of your bank account. See http://www.ag.state.mn.us/Consumer/F...bfactsheet.asp for information. You can also start using a debit card instead of a bank account.

Since your doctors say you are unable to work, have you applied for SSDI? Make sure to apply for any public assistance you might qualify for.

That's all I can come up with. It sounds like you are in a really tough spot. Try to stay as positive as you can as you try to find solutions. Hopefully, others will have some suggestions, or at least words of encouragement.

[TheCraft]

Once again, thank you for listening and providing me with some additional info.

I had to set up a doctor's appointment to get another exam done and get additional documents filed out so I can use them in court next week and also with the unemployment office. Hopefully, there will be no more issues with even more updated and recent paperwork. Unfortunately with no health insurance and obviously work comp not paying for this visit, I have to a lot of money upfront to see my doctor. Now, I'm racking up medical debt because of this...

I have no looked into SSDI but I will now -- seems logical at this stage.

I have no issue with defending myself with creditor lawsuits if they arise, it's just the Student Loan ones, I'm battling in court. A chapter 13 would at least stop any more garnishments/lawsuits etc in the mean time so I can get back on track. Hopefully, if I can win my work comp wages/health benefits back, that would be huge -- then I can get my surgery, heal up, find a new job and start paying stuff.

I have ran into dozens of Bankruptcy attorneys that tell me that I cannot get student loans discharged, and then I tell them you can under due hardship if proven... and actually can be dis-chargeable under CH 13, once again with hardship if I can't make a means of living based on the amount. A few colleagues have gone through it and were successful after 3 or 5 year plan. The bottom line, I want to get a grasp on the chaos before anything else. I've already hit rock bottom and funds are running out to keep a roof over my head and put food on the table.

I've also decided to look into a Personal Injury lawyer and see if I can get somewhere with that. This work injury has ruined everything.. financially and socially.

Thank you for listening and offering help. I greatly appreciate it.

[ValleYum]

Adding on to what LadyInTheRed said earlier:

Typically, you can't obtain unemployment benefits unless you are able to work. I would think your disability would preclude receiving unemployment benefits if this is the case in Minnesota.

If the money you are trying to hang on to is from Worker's Comp the Minnesota exemptions appear to exempt that. If that is the only reason you aren't filing a CH 7 it may be important to know that your cash should be safe from being taken by the trustee. It also should be safe from judgment creditors but you may have to prove where the money came from and risk not having access to it if it got frozen so it may be simpler and less stressful to live on cash or prepaid cards.

Statute protecting worker's comp money:

Workers' compensation
Minn. Stat. Ann. § 176.175

http://www.legalconsumer.com/bankruptcy/bankruptcy-law.php?ST=MN

Do check with the Social Security folks or hire a Social Security Advocate or Lawyer regarding filing for disability. It can take a couple of years to be approved if you are denied in the initial stages and have to go before an administrative law judge in order to be approved for benefits.

With no income, you may be able to file for SSI - Supplemental Security Income - which offers disability income but is both income and asset based. The monthly payment is need-based and varies by state up to a federal maximum amount. It also makes *most* of those who are on it eligible for Medicaid.

More info about SSI is here: http://www.socialsecurity.gov/ssi/te...anding-ssi.htm

Some state specific Social Security Disability info is here from a NOLO press site: http://www.disabilitysecrets.com/dis...minnesota.html


As always, do keep trying to find a local attorney to help you - a good attorney is invaluable particularly if you are going to try to have your student loans discharged if you do file bankruptcy.

Good luck!