My Unsecured Debt is Over Inflated...

[Amy26]

Hello! I just wanted to ask, yet another, question!

On my petition... it lists out all the creditors and of course balances and what the debt is. I have a lot of credit cards, student loans, & 2 mortgages.

My question is about my student loans... I see some of them are listed as "educational" as the category... but then I have other ones (mostly my private student loans) that are listed as "unsecured" instead of educational as they are supposed to be.

Nothing else in the creditor list would deliniate it as a student loan except the fact that I know it is.

Therefore, this makes my unsecured debt look larger than it really is. Is this going to pose a problem? Is this being reported as unsecured because of the way my financial instution reported it to my creditors?

Me confused....

[MrSmithster]

maybe i misunderstand, but wouldnt you want any loans lused for education to be listed as unsecured so they are dismissed? i was under the impression student loans are not dismissed under BK protection.

[Amy26]

Well I also don't want be scrutinized without reason. If the educational loans are lumped into my unsecured debt it puts my total around 150k ...without it, its much lower. So, I don't want this to be an issue when the trustee starts looking into my stuff. Like wow...she's got a lot of unsecured debt... when really some of it is educational and it just appeared on my credit report as "unsecured".

[dingdong]

Student loans are not secured debt, but they are treated like priority debt in BK.

Your TT will know which debt is SL debt.

Did you or your attorney list the debt as SL or educational on your schedules?

Your debt that is secured for BK purposes is generally only Auto Loans and Mortgages for most filers. There can be some exceptions.

SL can be guaranteed by the Fed Govt, but that has nothing to do with being secured.

Secured just means the lender has an interest in the property that was financed, until the loan is PIF, then the property is no longer secured.

There is nothing tangible associated with an education, therefore a SL is not secured.

[Amy26]

No, that's what I'm saying...they are listed as unsecured debt and included in my unsecured debt total. I'm not asking if they are secured I'm just wondering if its bad that they are listed as "unsecured" when it should be "educational". There is nothing on the petition that would be obvious that they were student loans other than me just knowing which ones are which. These are private student loans.

Some of my student loans are listed as "educational" then my ones with JP Morgan Chase are listed as "unsecured". This is how they came off on the credit report that he pulled.

They are on schedule F.

[dingdong]

What types of loans are they from Chase?

Do they have an educationally related title to the loans, or are they just personal loans that you happened to use for education?

When you signed the loan docs, did you include "educational loans" or tuition as the reason for obtaining the loans?

I guess what I am asking is did Chase know when you obtained the loans that you were going to use the money for educational purposes?

[Amy26]

They are private graduate student loans. My chase credit cards have the creditor name listed as "chase" and the student loans are listed as "JP Morgan Chase"....that is the only difference between them on the schedule.

[dingdong]

It is still unsecured debt, no matter how it is listed on the schedules. It doesn't inflate what the unsecured amount is because it is unsecured.

It is what it is.

Even though some of it is I am guessing federally backed SL , the federally backed stuff is still unsecured, the private SL are still unsecured.

You take your total amount of debt.

Say your total debt load is 500,000.00

300,000.00 is secured, lets say a mortgage.

100K is cc debt ( that is unsecured)

100K is SL debt (also unsecured)

Total unsecured is 200K.

[dingdong]

There are basically three "types" of debt in BK.

Secured debt-where the lender has an interest in the property. (Mortages, Autos, etc)

Priority unsecured debt-usually tax debt.

Unsecured debt-all other debt including SL debt, CC, regular contracts like rental agreements, utilities, personal loans w/no collateral.

Your SL are unsecured and thus included in the unsecured debt portion of your schedules, whether or not they say 'educational" or not. They are still unsecured.

The difference is, SL debt is not dischargable, and to discharge it, you have to file an AP.

Even though it is listed as unsecured, that portion does not go away in BK, even though it is unsecured.

So you can have 1 dollar in CC debt, 100K in SL debt, your total unsecured debt is 100k plus 1 dollar, after the bk you still have 100K in unsecured debt.

Does that help?

[shabam]

Say your total debt load is 500,000.00

300,000.00 is secured, lets say a mortgage.

100K is cc debt ( that is unsecured)

100K is SL debt (also unsecured)

Total unsecured is 200K.

Yep that is exactly how it works. While student loans cannot be discharged, they are still unsecured debt. While the title may be different under schedule F, they will probably be listed (tallied) earlier on in the summary as student loans.

The credit report usually lists them as they are classified. Be it an education loan etc; As that is how the creditor classifies the loan.

This may work to her advantage as the creditors may discharge them after all.

[Amy26]

Thanks for the replies guys. While I realize they are ultimately unsecured I was just concerned with the classification. My petition doesn't list them anywhere as student loans. IE: my unsecured debt say 300k but there is no way for them to discern what of that 300k is really student loans unless they asked the lender directly or me. From what I'm reading it may not be an issue but I just don't want him to thnk I have 300k in credit card debt when it's really like 150k credit card and 150k student loans. Ficticous numbers here

[dingdong]

If the TT asks, just explain they are grad school loans.



You can always ask your lawyer to amend and list them as educational loans if you are worried about it.


I would just sit on it and if the TT asks, explain at the 341 they are grad loans and won't be discharged.

[Amy26]

Okie Dokie. We're gonna amend it later anways to add the 2 creditors that were left off...so perhaps we can do it then.