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Safe to Pay off loan after filing

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    #1

    Safe to Pay off loan after filing

    My husband and I are planning to file a Ch7 in February due to medical bills (him) and credit cards (me). I have a few private student loans at 9 and 14%. My in-laws are offering to pay off these loans for me and I'll continue my payment plan with them at 4% interest.

    I consolidated all my federal stafford loans using the federal consolidation program, mainly to get them away from Sallie Mae. My two private loans are still with Sallie Mae.

    When is it safe for them to pay off my loans without it looking like hidden income/windfall/etc
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    #2
    Have you retained an Attorney yet? If so, I would ask him/her. I wouldn't pay off anything until after Discharge. Paying your parents through a Bankruptcy could be an Insider payment.

    Luci

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      #3
      We have picked the lawyer but yet to retain him. We are still working out a quick settlement with a personal injury case so have been busy with that lately. Trying to get a chunk of our medical bills covered so that we can still have a few docs in the city that we can see. We are currently getting all our paperwork together though.

      Just wondering if I should wait 6 months or so after discharge so there are no suspicious activities.

      My main goal is to escape all loans from Sallie Mae so that when I pay extra, they actually apply it to principle instead of extending my loan terms or apply it to interest that I've yet to accumulate. It is all very confusing.

      I will ask my lawyer once we pay our fee in case there are any special Louisiana issues.

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        #4
        Originally posted by lovebirds View Post
        We have picked the lawyer but yet to retain him. We are still working out a quick settlement with a personal injury case so have been busy with that lately. Trying to get a chunk of our medical bills covered so that we can still have a few docs in the city that we can see. We are currently getting all our paperwork together though.

        Just wondering if I should wait 6 months or so after discharge so there are no suspicious activities.

        My main goal is to escape all loans from Sallie Mae so that when I pay extra, they actually apply it to principle instead of extending my loan terms or apply it to interest that I've yet to accumulate. It is all very confusing.

        I will ask my lawyer once we pay our fee in case there are any special Louisiana issues.
        K. I also had a personal injury case open. I called my Attorney and demanded he start settlement requests in January. At the time, I could have cared less if I got a dime, even tho the accident deemed me 100% disabled. I received $5,000 the middle of Feb. and paid off my dental bill. My teeth are going bad due to the Pain & Nerve Meds I'm required to take.

        If you haven't already talked to the Lawyer on the Personal Injury Case, call him and tell him you need to get this settled ASAP. I was honest and told him I needed it settled & check received by the 20th of Feb. as I was going to file BK in 9/09.

        I don't think you will have to wait 6 months after your discharge. Your Attorney may tell you okay, discharge date or closed date.

        Hubby has a Parent Loan from Chase (used to be SunTech) he has been paying since 2002. I logged onto his Account and went to view history..Crap, you are right, the majority is going to interest & he supposedly has a 4% loan as it is auto drafted each month.

        That brings up another question. Students loans are in forebearance during your BK. In other words that cannot discuss your loans, demand payments; however, interest accumulates each month. I'm going to have hubby call & get the specific address (usually a different address) to mail the payments each month while we are in our BK process. I'm afraid he is going to lose the 50% off his loan because it will not be auto drafted.

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          #5
          Definitely wait until after you are discharged to borrow from your in-laws.
          Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

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            #6
            We were up front with the PI lawyer about the bankruptcy and he is trying to get it settled ASAP. He said if we signed a paper saying we wouldn't sue the driver that rear-ended him at a red light, we can get a settlement within a month.

            I doubt we'll get anything after paying lawyer fees and medical bills. I actually hope we don't get anything so it won't count as income. We are pushing for a Chapter 7.

            I wasn't married to my husband at the time and he didn't realize his insurance was lapsed. We even started getting quotes that morning to see rates once we were married but didn't switch already b/c he wanted to wait for his policy to end (so stupid of us).

            After the accident, his new car was totalled with no one paying to fix it, his whole section got laid off at work, and we got denied unemployment b/c he admitted that his car was totaled. We burned though all our savings and here we are...

            He's going back to school in the fall (gift from in-laws) so he'll stay unemployed until we can file. Thank god he doesn't have any student loans...

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