New here, terrified single mom

[meggie]

Hi, I am new here.

I am swimming in information and I was hoping someone could help me out.

I am a single mom, 22k income this year for a family of 2 in Arizona so it looks like I am safe on the means test.

I make enough money to pay for all necessary bills (childcare, rent, car, food, utilities, student loans when they become due) but not enough to cover the monthly credit card and loans.

I am current on all of my bills with no missed payments, but I have been living off of credit cards and using a private student loan refund to pay for my credit card bills. I have a six year credit history with 0 late payments, but all of my accounts are maxed out. I have 60k in debt, 26k credit cards, 34k in loans, mostly the car and a bank loan which I used to consolidate debt.

On a cash only budget that includes payments to the credit cards, I am several hundred dollars in the red every month.

I have no savings or assets and I rent an apartment, but I do have a car. I owe only 8k on it, but it is worth 7000 or less. If I file ch7 will I lose the car? I have never been late on the car and would like to keep it, and keep up with the payments.

Do I have to be behind to file? I cut up my cards and have not been charging anything for the past two months. I am still making minimum payments.

Will I be able to get a federal student loan for my last semester of school, or should I wait until after I get it before I file? This federal loan would go straight to the school for my tuition, with no refund.

When should I contact an attorney? Just before i am ready to file, or now?

Thank you for any help!!!
Meg

[ready2puke]

Sounds to me like there would be no problem for you make sure you wait alittle longer to file tho. About the new loan, I doubt if you would beable to get it once you file. You know student loans arent dischargable.. Maybe you can get the loan first before you file and pay your school. Just a thought. Im sure the pros will beable to give you better feedback.
Oh yea and start seeing attorney as soon as you can and see as many as possible so you can get a feel for one you like. Keep reading the forum..it'll help in more ways than I can say.

[meggie]

Thanks!
It probably would be a good idea to wait.

[soleprop]

Hi, I am new here. If I file ch7 will I lose the car? I have never been late on the car and would like to keep it, and keep up with the payments. Do I have to be behind to file? I cut up my cards and have not been charging anything for the past two months. I am still making minimum payments. Will I be able to get a federal student loan for my last semester of school, or should I wait until after I get it before I file? This federal loan would go straight to the school for my tuition, with no refund. When should I contact an attorney? Just before i am ready to file, or now?

Welcome

you won't lose the car if you continue making your payments throughout the bk process.

you do not have to be 'behind' to file; however the money you're paying on your credit cards is kinda money down the drain once you commit to filing bk; it is better spent on food, shelter, and other necessities.

you have to stop using the cards immediately and start living on the funds you get from work, etc. you'll need to put some distance (90 days, at a minimum) between your last credit card usage and your bk filing.

your ability to get a federal loan for school is more likely to be impacted by the current economic crisis. you should not get any new lines of credit (school loans included) while in the bk process; i'm not sure how it's looked at if you get a loan prior to filing bk...someone else can help there.

you should schedule an initial consult with at least two attorneys pretty much any time now; don't wait to be ready to file, you want to know who you're going to jump in the bk boat with. ;)

good luck. hopefully someone else will come in and clarify the student loan bit.

[epiphany]

Hi, I am new here.

I am swimming in information and I was hoping someone could help me out.

I am a single mom, 22k income this year for a family of 2 in Arizona so it looks like I am safe on the means test.

I make enough money to pay for all necessary bills (childcare, rent, car, food, utilities, student loans when they become due) but not enough to cover the monthly credit card and loans.

I am current on all of my bills with no missed payments, but I have been living off of credit cards and using a private student loan refund to pay for my credit card bills. I have a six year credit history with 0 late payments, but all of my accounts are maxed out. I have 60k in debt, 26k credit cards, 34k in loans, mostly the car and a bank loan which I used to consolidate debt.

On a cash only budget that includes payments to the credit cards, I am several hundred dollars in the red every month.

I have no savings or assets and I rent an apartment, but I do have a car. I owe only 8k on it, but it is worth 7000 or less. If I file ch7 will I lose the car? I have never been late on the car and would like to keep it, and keep up with the payments.

Do I have to be behind to file? I cut up my cards and have not been charging anything for the past two months. I am still making minimum payments.

Will I be able to get a federal student loan for my last semester of school, or should I wait until after I get it before I file? This federal loan would go straight to the school for my tuition, with no refund.

When should I contact an attorney? Just before i am ready to file, or now?

Thank you for any help!!!
Meg

First off, you should contact an attorney now and ask him/her all the questions that you have asked above. Most will give free consultations and a lot of them will take a down payment for their services. Don't be afraid to ask the questions that are important to you at your initial consultation.

Second, you do not have to be behind to file BK. You are actually better off in the long run if you are not in arrears.

Third, you will not lose your car as long as you are current and keep paying on it. You can either reaffirm or you may be able to do a ride through. Research your options.

I can't answer your student loan question but hopefully someone will come along and do so.

Good luck.

ep

[ready2puke]

See an attorney about when to file and that Fed loan you want. You may want to stop paying on your cc's and save for attorney fees

[meggie]

Thanks for all of your help!
I will be looking around on Monday for a good atty, to see what I need to do to prepare, and when the best time to file would be.


I just thought of one additional thing.

I have a 529 college account for my son. He is the beneficiary, but my name is on the account too, as the adult gaurdian or whatever the word is. It has about $900.00 in it from christmas and birthday contributions from my parents. Should I be worried about this?

[epiphany]

If, like you say, you have little assets, you can exempt that pretty easily.

ep

[InDebtNeedHelp]

BEFORE YOU EVEN THINK ABOUT BK, you need to secure your student loan for your last semester. A college degree is essential in the upcoming years. Do everything you can to stay afloat until you get your last student loan. The Chapter 7 BK will NOT eliminate your student loans; you will have to repay them. DO NOT JEOPARDIZE your last semester of college and your degree!

[jennordhavn]

You should have no problem obtaining a federal (Stafford) loan despite the BK. Not sure if you can get it while the BK is still active, but once it's discharged, it's not a problem. I was in law school when I filed Ch. 7 in 2000 and had no problem getting my loans for the last 3 years of school. Of course, as everyone has pointed out, the student loans will not be discharged.

[TEW]

H
Will I be able to get a federal student loan for my last semester of school, or should I wait until after I get it before I file? This federal loan would go straight to the school for my tuition, with no refund.

When should I contact an attorney? Just before i am ready to file, or now?

Thank you for any help!!!
Meg

It should not be a problem getting more student loans even with the BK. They are not dischargeable debt.
It would be a good idea to get 3 or 4 free consults from BK lawyer soon

[jonnarocka]

Do wait until your loan is disbursed

I'm a financial aid officer. It's correct, what's been said so far about not having a problem getting a Stafford loan after bankruptcy. However, having an active bankruptcy would likely cause complications. Since this will be your last semester, to be safe, I would definitely wait to file BK until your last loan disbursement is made to the school.

FA officers check on the NSLDS (National Student Loan Data System) to check for flags, such as over-awards, defaults and active bankruptcy before awarding aid. If you're ever interested in seeing your own record you can access this information using your Federal Student Aid PIN number at:

http://www.nslds.ed.gov/nslds_SA/

If you've ever filed or renewed your FAFSA online, you've already activated your PIN. If you haven't activated or don't remember your PIN, you can go to the PIN site at: http://www.pin.ed.gov/PINWebApp/pinindex.jsp

The NSLDS is a government site, run by the Department of Ed. All of your Federal loans and grants that you've ever had at any school show up here.

Best of luck, and (early) congratulations on your upcoming graduation!

[jonnarocka]

Bears repeating...

Though it's already been said, it bears repeating: Once the BK is discharged and closed you'll have NO PROBLEM getting additional Federal Stafford loans should you ever decide to return to school. (As long as you haven't reached the aggregate limit: $57,500 for undergrad and $138,500 for grad/professional students, or have other flags). BK is just an issue while it's active.

Now, private student loans are another issue altogether... I always advise my students against those anyway, if it's at all avoidable!

[Clabbergirl]

Bumping this because I've been searching the boards for something along the lines of what was discussed here - student loan disbursement during and post-Chapter 7. And yes, I understand full well that student loans aren't dischargable.

I'm a grad student and will graduate in July 2011 - 2 semesters left. I have 2010-2011 Federal student loans and a private Grad Plus loan that was credit based - 1/3 of these loans was disbursed Fall 2010, another 1/3 will be disbursed in mid-Jan 2011, and the last in Summer 2011. The loan amounts are more than tuition and I will receive a refund 2 more times. I'm also about to file Chapter 7, either end of month or Jan 2011. Since these loans were approved pre-BK, I will include them in my list of creditors.

Reading now, however, I'm starting to panic because of the comment by the financial aid officer in this thread. Can my school deny my already-approved-and-partially-disbursed loans because of a BK? And what about the refund amount? It is deposited into my bank account and will push me over the $10K exemption limit. Do I report the refund as income?

[bellows321]

From what I've read about federal student loans is that if you are convicted of a drug-related crime while receiving student loans, you will no longer be eligible to receive further federal student aid. I've never heard about bk and student loans. Some of the recent law changes may affect what that previous student loan officer said.

Can you wait until Summer 2011 to file? Remember, student loans stay with you until you die or pay them off, so you're going to get stuck with them regardless.

Good luck.