Executory contract (part 2)

[Priceless ProSe]

(please read "executory contract" post prior to this if ur not fimiliar)

Soooo...
I decided based upon my research that I was not going to dispute the whole "is this a stipend or not" in court, as my chances of winning would have been slim. I decided my best option was damage control, I decided to go talk to "tiger lady" (the boss) and convince her that my bankruptcy has nothing to do with them, because it effectively does not. The reason I would do this is because I thought they may send thier lawyers to my 341 or just try and muck up the BK in general. BIG mistake on my part.


I severely overestimated/misjudged these people. After I sat down and explained to them that I was filing, and had to include them because it was my legal duty to disclose everything, she looked at me and said. "so what ur saying is you filed bankruptcy and wont pay us back?" So I explained again. Still she didnt get it, so she asked, "are you going to work here?", I said "that was the plan" (small deception), she said, "well if you dont are you gonna pay us back?"

It was about then that I began to feel nauseous (do you see what I was thinking yet?) I told her "of course, its probably not dischargable even if I wanted it to be "(big mistake number 2). I told her also if she was still concerned she hould contact her lawyer to verify what I was saying (mistake 3). As soon as I left I contacted the operator for the agency (future would be employer) and asked to be connected to the lawyer, they gave my the number for an outside firm. When I called this firm they informed me that they dont handle the contracts THE TIGER LADY DOES!

Dont you see! If I wouldnt have went there I bet dollars to donuts it would be a "de facto" discharge of this debt. That is to say, if the person in charge of the contracts does not realize they cannot be discharged, and believes they were discharged in BK, and thus never tries to collect, it is discharged!

Seems I may have out-thunk myself on this one.
1) Do you think my appraisal of the siuation may be accurate?
2) What next?

I was considering calling her back and saying, nevermind I decided to include you in the bankruptcy!

(HHM this is mostly towards you as youve been very knowledgable in this, I only wish I had asked everyone on the forum if I should go talk to her before I did, maybe someone would have talked me out of it, but then again I would have never known about this situation had I not have gone in to her office)

[Bandit]

eh. how to know what the best plan is.

I think I will have to find part1 first because part2 looks really messed up

I would not say anything more to them for awhile because I agree with the three mistakes. It sounds very complex.
I will bet a trustee might have something to say about it too. Yes?

I am going to go find part1 then come back.

[Bandit]

Dont you see! If I wouldnt have went there I bet dollars to donuts it would be a "de facto" discharge of this debt. That is to say, if the person in charge of the contracts does not realize they cannot be discharged, and believes they were discharged in BK, and thus never tries to collect, it is discharged!

due to the nature of the questions they asked you on what you told them, I would tend to think they would know already that this area is a bit complex & would not just assume or not realize they cannot be discharged.

My hunch is technically, no, but I understand what you are saying because maybe they wont try to collect & just let you go/cancel the contract.

Can you find time to call a couple of BK attorneys & tell them the whole story & see what they say about it at this point? I would get a couple of different professional legal views about your contact. It would be good time invested.

On to part1 now

[HHM]

The good news is, what you say to them is largely irrelevant. The status of the debt as non-dischargeable or dischargeable does not change because you spoke to them.

But, also, the status of the debt as dischargeable or not does not depend on whether they take any action. In this particular case, the burden would be on you to prove the debt can be discharged.

Also, you have time. As I recall, you only just filed BK. The average chapter 7 takes 4 months to reach discharge and you can file the objection anytime before discharge. So, you might as well give it a little time and see if they do anything.
There really is no harm in contesting the dischargeability. After all, since the debt is likely non-dischargeable anyway, you are in no worse off position challenging the dischargeability and losing, than doing nothing.

But you are are correct, had you asked us whether you should go talk to them, we probably would have said no. (after all, you didn't really accomplish anything by doing so, nor should you have expected to).

[keepmine]

To me, you're a prime example of a bankruptcy that never should have been filed in the first place. You're unemployed, you've filed for public assistance and, a huge chunk of your debt can't be discharged. I can't figure out what you are trying to accomplish. You have nothing that a creditor can take. What happens if, you or a member of your family get sick and you run up a huge medical bill? The bk card has been played. You'd have been much better served to get your finances stablized and then explore the bk option.
As it stands now, it's hard to see how you can benefit from a fresh start.

[Bandit]

Two years of wages owed over getting that discharged.

Being totally miserable working there or going on to something you like.

But what if you start to like the field after you give it a little time? No way?

Department of Justice clears it all up. You probably already know all of this. 50, 60 & 61 talks about all that...or maybe soimeone else here can use the info:

http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title4/civ00060.htm

B. Standards for Rejection of a Contract. An executory contract may only be rejected if the proponent satisfies the business judgment test. In re Chi-Feng Huang, 23 B.R. 798, 800 (Bankr. 9th Cir. 1982). The primary issue is whether the rejection of the contract would benefit general unsecured creditors. E.g., In re Orion Pictures Corp., 4 F.3d 1095, 1098 (2d Cir. 1993), cert. dismissed, 114 S. Ct. 1418 (1994); In re Kong, 162 B.R. 86, 94 (Bankr. E.D.N.Y. 1993); In re Lawson, 146 B.R. 663, 664-65 (Bankr. E.D. Va. 1992); In re Audra-John Corp., 140 B.R. 752, 755 (Bankr. D. Minn. 1992). However, other factors courts may consider include whether (a) the contract burdens the estate financially; (b) rejection would result in a large claim against the estate; (c) the debtor showed real economic benefit resulting from the rejection; and (d) upon balancing the equities, rejection will do more harm to the other party to the contract than to the debtor if not rejected. "Generally, absent a showing of bad faith, or an abuse of business discretion, the debtor's business judgment will not be altered." In re G Survivor Corp., 171 B.R. 755, 757-58 (Bankr. S.D.N.Y. 1994).

Depending on how much all the other debt is excluding the contract, BK might make it worse if you end up having to do the contract by getting screwed, i.e. pay it back. for example if the other debt could be payed back in a couple of years by fulfilling the contract no matter how much you hate it.
my 2 cents

This was worth quoting too on the timing:

[Bandit]

I guess I have no opinion & cannot really be of much help. It is difficult for me to put myself in that situation & think the whole thing through without knowing all the possibilities that could arise.

I dont even see how a trustee can make a decision all that easy (with exception of huge government contracts or rental properties as they are pretty cut or where a lot of money is involved) & I will bet the final results will vary from court to court on the same exact case-because that is just how people are when laws get complex.

Interesting case.

[Bandit]

But you are are correct, had you asked us whether you should go talk to them, we probably would have said no. (after all, you didn't really accomplish anything by doing so, nor should you have expected to).

At least we know now what Tigerlady was going to ask back as soon as she heard

[BKParalegal]

Great comments from all of you, HMM, Bandit and keepmine. Hands down the best one, was from keepmine, regarding wasting their BK card now. You are in no position to handle any curveballs in your life regarding, as keepmine mentioned, medical problems, etc. and in your state of "poverty" you are basically untouchable. Talk to an attorney, but I would look at dismissing this thing until you have turned a corner.

And, as I have interpreted it, by all accounts what they paid you is classified as a student loan, and after they changed the law in 1998 to make student loans non-dischargeable, I have only been part of one case, where a case was won, and that is because the person had been ruled clinically insane and was admitted into a psych ward.
( It was a couple, and we were working with the sane one)
Good Luck

[Priceless ProSe]

To me, you're a prime example of a bankruptcy that never should have been filed in the first place. You're unemployed, you've filed for public assistance and, a huge chunk of your debt can't be discharged. I can't figure out what you are trying to accomplish. You have nothing that a creditor can take. What happens if, you or a member of your family get sick and you run up a huge medical bill? The bk card has been played. You'd have been much better served to get your finances stablized and then explore the bk option.
As it stands now, it's hard to see how you can benefit from a fresh start.

The way I figure it, im discharging 30k in credit card debt and whatever im upside down on the car. Not to mention the car would have been repo in the next few months without BK.
I could have waited until I graduate in two or so years, but then my income will most likely not qualify me. I could not file at all, watch the interest build until I graduate, and then owe 60k which will probably cost me 120k by the time im done paying.
I could wait until next year, but all I would really be doing is starting the "bad credit clock" a year later, meaning I cant buy a house until one year later as well (assuming).
Mind you this is all IMO, and relative to the person. If my situation was permanent then all my student loans would be dischargable!

The good thing is were recieving medical from the gov now so we wont be running up any bills (and no copay!), downside is you gotta wait in the ER for 20 hours to be seen.

Edit: I dont know why I said 30k above, I think I was subtracting the contract or something, its actually more than 40k (still dont know how I got 30k)

[keepmine]

All I can say, is you have one heck of a reality check coming. You have no concrete way of supporting yourself for 2 or more years. With those student loans hanging over your head and accumulating interest, you won't be buying a house anytime soon. The point I'm trying to make is, you're gonna have a lot more debt 2 or more years from now than you have now. Some of which likely could be discharged. I assume your health coverage is some form of medicaid. You're gonna find fewer and fewer doctors will accept medicaid patients. In the county I live in, only 1 doctor will take medicaid patients and sitting in an ER for really long periods of time is not my idea of a health plan.
Thing is, sometimes, bk is just not the best option. Sometimes you just have to pay 'em. Either in a Chapter 13 when the time is right or, in negoiated settlements as Treehugger is doing.

[liz417]

...downside is you gotta wait in the ER for 20 hours to be seen.

Hey I have insurance and had to wait in the ER twice for 10-12 hours each visit!!!!

Good Luck!

[Priceless ProSe]

Thank you everyone for the feedback, it really helps. Keepmine, I do see where your coming from. At the time I filed my rationale is, my credit is already ruined because my wife lost her job and we wont be able to pay for some time, so why not file now, get rid of all the unsecured debt, and let the credit heal for awhile. If I didnt declare BK I dont think I would be able to pay off the CC in the near (or not so near) future, and I think my credit might be bad for 7 years after i had paid off al the collections/judgements, so in that regard the BK may actually help my credit 7 years from now. I do not take into consideration the student loans when filing BK because they are going to be there regardless.

Also, I wasnt saying I could buy a house soon, but perhaps sooner than If I did not file, and defenitely sooner than if I wait another year to file.

Thjank you again

[Priceless ProSe]

And, as I have interpreted it, by all accounts what they paid you is classified as a student loan, and after they changed the law in 1998 to make student loans non-dischargeable, I have only been part of one case, where a case was won, and that is because the person had been ruled clinically insane and was admitted into a psych ward.
( It was a couple, and we were working with the sane one)
Good Luck

Defenitely not a student loan, but most likely a stipend (may be equally as non-dischargable).

[Priceless ProSe]

(please read "executory contract" post prior to this if ur not fimiliar)

So I explained again. Still she didnt get it, so she asked, "are you going to work here?", I said "that was the plan" (small deception), she said, "well if you dont are you gonna pay us back?"

Are you serious! I just reread my filed docs and I actually wrote "I intend to reject ths contract" on the schedule. If tigerlady takes a look at my filing im sure shes gonna freak out. If my intention was to make myself look as suspicious as possible so that they can send thier attorneys to the 341 I think I have accomplished this. And its funny because the reason I went to see her was to tell her not to worry I wasnt going to try and get out of the debt, in the hopes that they wouldnt send attorneys and request a million documents.

At this point I do not have hopes of discharging this debt. Also, I was hoping that they would not terminate the contract until after I graduate, but I have pretty much given up on this as well (well once they see my intention was to reject).

I am thinking now that I should just keep my mouth closed and goto the 341, if/when the trustee asks about the contract I will tell him I was mistakenly thinking it could be discharged, but now I understand it cannot, and I will not be fullfilling the contract at any time. I was also thinking of calling tigerlady and telling her that I will be terminating the contract after/during BK, but not trying to get the debt discharged.

Questions:
1) Does this seem like the logical next step?
2) If tigerlady does send lawyers, will they be able to request that I jump through a bunch of hoops given the fact that they are not a creditor, and I am not trying to get the debt incurred from the contract discharged? Or can I object to thier requests based on this fact?
3)Will I get in trouble for telling tiger lady that I was planning to work, when I am obviously not?

My mission is/was not to be deceptive (obviously I am not very good at it), I just thought that in court/legal issues it is best to hold onto info until it is required of you (something else I am obviously not good at).


Someone please hook me up with some sound advice to get through this, Im not worried about discharging the contract, I just want the rest of the BK to work out so I can have a new start as well.