State fraud debt...dischargeable?

[oldbaddebts]

I filed CH 7 last friday Pro Se.... I have a debt and civil judgement for unemployment fraud from 2002. I recall seeing conflicting information on the dischargeablity on this. I believe it is dischargeable unless there is an objection to it, and they win the objection. But, did I read somewhere that fraud is only dischargeable in a 13 after you complete all payments?

Thanks for your help, I am looking ahead to make sure I can take care of all of my non dischargeable stuff ASAP so I can have a true "fresh start" but with enough effort to have already learned how to handle not owing anybody by the time I am out of debt.

[magyar123]

Federal/state/local debts are usually not dischargeable - especially debts that derived from fraudulent activities.

[HHM]

You still list it as a debt, but I am not sure the burden is on the state to demonstrate non-dischargeability, you might have to file the Motion to Determine Dischargeability.

Look at it this way, if you list it and do nothing, and after your BK is complete, the state tries to collect...here is what is going to happen.
State: give us our money
You: But I listed it in BK and it was discharged.
State: We don't care, the judgment was for fraud, give us our money, or we will take it from you.
You: umm, ahh, hmmm, ahh.

You would have to reopen your BK and file the Motion then.

[oldbaddebts]

It is listed as a debt. I expect to have this debt, the IRS, state income taxes and a trade school from 2002 debt remain in addition to my car. Once I have my 341, I intend to get a second job so when my discharge is issued I can contact all of these and get on payment arrangements I can live with. My thoughts are that if I go to them to make arrangements with a "good faith" payment available to each immediately after discharge, they all might be more negotiable. After all, they are GOING to get paid, just a matter of when and what they have to do to get it.

Regarding my trade school, does anyone know if it is possible to discharge the interest and fees from it and be left with the principle? My $3500 debt is over $7k now, and may or may not have been purchased by a collection agency.

BTW, thanks for the suggestion of filing a Motion to Determine Dischargeability.

[CindyLou]

I say HHM's scenario is a MUCH better option. Believe me there is no one handing out trophies in state agencies for good faith efforts. Really and truly chances are you won't ever hear from them again. Really good chance. My brother had overpayments from unemployment and filed it on a 13, but the state never even filed a claim, so POOF....debt GONE forever. Never heard a peep from them. I would just take that chance and then take care of it afterward. They aren't going to penalize you for waiting another few months to wait and see what happens.

Another question: Were you actually "convicted" of fraud?? Was fraud proven? Or were you just over paid and they are just sending you invoices? Do you mind explaining the situation, maybe I can help compare it to my brother's situation.

Also, on your taxes, how old are they?

On the trade school. Is it student loans? Private?

[oldbaddebts]

My unemployment "fraud" was I was unemployed a few weeks, then worked a temp job for less than unemployment paid cause I didn't want to be lazy, so I went through the process to have them reduce my benefit by literally $15 for a couple of weeks, then back to no job, followed the rules by the book to get my full benefit again.. when I called back with another temp job so they could reduce my benefit once again, the lady told me "I'm not telling you this, but it is rare for people to actually go through this hassle, it's only a few bucks, just don't worry about it, but let us know if you get employed enough to not get benefits".... I followed that advice to the letter, then a couple years later lost a job, applied, and the state decided I had to repay all 8 weeks of benefits in their entirety because I wasn't entitled to $42 of them. They called it Fraud, chose not to prosecute, but got a judgement that they have never acted on. Interest has it up to $3700 now. The monthly statements say the amount is for fraud.

Might be more info than you wanted, but I still can't believe the lack of appeals process on this stuff. I even had the name and ID # of the young lady that told me not to worry about it, but the response I got was that they had a high turnover rate and she was no longer working there, so they couldn't verify what I claim she said.

Taxes are less than 3 years old, they are from 2005.

Student loans were a trucking company that trains you, then if you work for a year they waive the fee, if you leave for any reason you pay $3500. I got fired after 6 months for getting a traffic citation, I was never convicted, but fired for getting it. BTW, that is the job loss that I went to get benefits to be told that not only do I not get them, but I have to pay back the previous claim within 30 days.

[CindyLou]

Nope, not too much info. Thank for sharing. I'm still with HHM on the unemployment. I think they do have to file an objection. List them and see what happens. Worst case you still owe them and you can work out something after the fact. Best case they don't file an objection and it gets discharged.

On the trucking company. Are you sure its actually a "student loan?" Sounds like a training scholarship to me. If that's the case its dischargeable. They may have worded it like a forgiveable loan. But this is not a school authorized to give government or private student loans, right? This is their own loan program, right? If so I don't see why it won't be discharged. Tell us more about this loan.

[oldbaddebts]

The contract is worded as a loan that can be forgiven if you complete a year with them. It states that it is a student loan, and therefore can not be discharged in bankruptcy. That statement, I take as a scare tactic because the contract was signed in 2002 when the old laws applied, and at that time it definetly would have been discharged as it is not government backed. The contractual interest rate is 18% direct from "XYZ Training Academy" where "XYZ" is the trucking company.

Maybe I should budget a payment for both unemployment and the training, but leave it in savings. Then if they come demanding payment after bk, I can try saying it was discharged, but be able to settle. They should have gotten the creditors notice, so if they think they are entitled to not being discharged, they should object. If not, I don't know if I want to go through voluntarily asking if it is dischargeable. (shrug)

[CindyLou]

I would walk into this FULLY EXPECTING to discharge that school debt. If they think otherwise then let them prove it. I would say a thing about it. List is right nex to your visa card and move on. I have a sneaking suspsision they don't have a leg to stand on nor do they want to spend the legal dollars to get the money back and come out about even. I think they's just back off and call it a day. But that's just my opinion. You do not hard by listing this and the state debt, sitting back with a cup of coffee and letting it take its course. This is one you will for sure have to keep us posted. but you will have to promise to keep your mouth buttoned and not talk to these people while in BK. don't mention the things you talked to us about. YOu don't want them getting their wheels turning. You want them to forget you exist on this earth! Seriously. You are now dead to them until your discharge. That's the plan, ok. Where here for you. Keep us posted!!!!!!