Cash Asset (Student Loan) Questions.

[backtoschool]

I think student loan proceeds that are funded federally may be exempt.

Title 20, Chapter 28, Subchapter IV, Part F

(d) No attachment of student assistance

Except as authorized in this section, notwithstanding any other

provision of Federal or State law, no grant, loan, or work

assistance awarded under this subchapter and part C of subchapter I

of chapter 34 of title 42, or property traceable to such

assistance, shall be subject to garnishment or attachment in order

to satisfy any debt owed by the student awarded such assistance,

other than a debt owed to the Secretary and arising under this

subchapter and part C of subchapter I of chapter 34 of title 42.

This is incorrect. Please see the posts above. If the money is in a bank account, it is not exempt and must be protected using a cash or wild card exemption.

[backtoschool]

Wage garnishment and having cash count as an asset in a bk are two separate things. Student loan refunds that are sitting in a bank account are not exempt and have to be exempted with a cash exemption or wildcard exemption.

[ccsjoe]

sweet2ooth81,

You are talking about two different things here. You're attempting to reference laws regarding wage garnishments and apply them to BK. This is incorrect. There is no ambiguity in that once the money is in your hand as cash or in your account as cash, that it becomes fair play for the bk estate and will need to be exempted.

Garnishments and/or attachments are completely separate from bk, hence your legal reference does not apply to bankruptcy.

[sweet2ooth81]

the fact that they do not apply to bankruptcy laws is exactly my point. You are allowed to use non-bankruptcy federal laws in addition to bk laws (at least in TN). What is reason Federal funds can not be garnished? What is the intent of the law?

[sweet2ooth81]

Federal student loans can not be discharged in bankruptcy. The funds received are also not counted as income by the federal government.

[sweet2ooth81]

If social security is in the bank account, is it counted as an asset? If unemployment is in the bank account, is it counted as an asset? No, no, no.

[backtoschool]

Federal student loans can not be discharged in bankruptcy. The funds received are also not counted as income by the federal government.

Why is this relevant? You get a student loan, it goes directly to your university to pay your tuition and fees. Your university issues you a refund, which you deposit in your bank account. It is now a cash asset sitting in your bank account that needs to be exempted as a cash asset.

[backtoschool]

If social security is in the bank account, is it counted as an asset? If unemployment is in the bank account, is it counted as an asset? No, no, no.

Student loans are not treated the same way in bankruptcy. Also for unemployment insurance you have to exempt the extra cash sitting in your bank account the same way you would for the student loan.

You have posted 6 posts, all of them incorrect and questionable sweet2ooth81. I suggest you do some research before you post any more on this topic.

[sweet2ooth81]

well, it's working with the trustee. that's all that matters.

[Freddy03]

This is off topic but I'd thought I'd share since it's kind of funny.........

I was wondering why 7 of my co-workers all decided to go back to school over the summer. Well they all took out student loans and all ended up with money in their pockets. A lot of money! One just spent her's on some body enhancements (.)(.) LOL I couldn't believe it! I think they think it's free money! Crazy!!

[backtoschool]

This is off topic but I'd thought I'd share since it's kind of funny.........

I was wondering why 7 of my co-workers all decided to go back to school over the summer. Well they all took out student loans and all ended up with money in their pockets. A lot of money! One just spent her's on some body enhancements (.)(.) LOL I couldn't believe it! I think they think it's free money! Crazy!!

When they are paying for that non-dischargable "free money" for the next 50 years they will learn.

[dumpinmydebt]

I trust backtoschool's advice which is why I exempted my loan disbursement as a cash asset. I used my wildcard exemption. I'd rather be safe than sorry. No word from my Trustee yet either.

I agree Freddy03. Some people just don't think when they get this check. What's funny is some people are just going to school to get the money. You should see how much the attendance drops at my school after the checks have been sent. I don't get it. I use mine on necessary expenses.

[sweet2ooth81]

student loans can be used incorrectly but they serve a great benefit. It's an investment in yourself. If a person will finance a car, why not finance a tax deductible investment in education?

But perhaps this student loan exemption varies from state to state. Apparently California includes student aid as an exemption.

Public benefits

Public assistance, including aid to the blind, elderly and disabled, are exempt. Also exempt are student financial aid, relocation benefits, unemployment compensation, union benefits during labor disputes and workers’ comp.

[tcreegan]

Hi again sweet2ooth,

If social security is in the bank account, is it counted as an asset? If unemployment is in the bank account, is it counted as an asset? No, no, no.

Unfortunately it is yes, yes, yes once the $$ hits the ol' checking acct. Once the funds 'comingle' they become regular ol' cash.

The federal non-bankruptcy exemptions are an odd lot of exemptions but they don't come from title 20, they are a hodge-podge from titles 5, 10, 25, 28, 33, 38, 42, 46

Yeah, I hear you, it should all make sense, but in BK code that is not always the case, often it is even contrary to IRS code!! Go figure....

Tom in Colo

[AngelinaCat]

Posting inaccurate information helps no one, Sweet2ooth. You have been corrected more than once. You cannot make the laws work your way, just because thry 'ought to.' I am closing this thread.