Tomorrow is the big day against the UST

[2manybills]

There are many legal issues regarding student loans and whether they are paid in the plan or outside of the plan. It all depends on what district, etc. There are legal opinions both on Westlaw and Lexis Nexis in both directions.

If you are able TeacherMomma, I would see a good attorney that specializes in this area, I know liz417 and albacore both have a good attorney in your area in the IE. You might PM them. My guy is in L.A.

[justbroke]

Hey TeacherMomma, sorry to hear! Are we going to start our Chapter 11 thread now? You might be the first Chapter 11 pro se filer here. I almost was a Chapter 11.

[albacore44]

you think they would give you a break, since obviously the student loans were to better yourself for service to your country. i have a lot of respect for teachers, it's kind of a thankless job, particularly in California.

[TeacherMomma]

As per the UST my student loans will be included in the 11 - there is NO way they can not be A) because they are my largest creditor and B) the interest would be RIDICULOUS if deferred, so that isn't going to happen. What we are apparantly looking at is a plan that is just my student loans and they will be an impaired class therefore we can have the judge "cram down" a plan on the other creditors who are likely to vote no on my plan. So yeah, a backdoor 7 is what I am getting, but with fees. Yahoo. Or a huge portion going to the student loans and a very small portion going to the creditors.

Now if I were to stay in an 11 long enough to pay down the debt and get it under the 13 limits I can convert, but why would I do that if my plan was doing what I needed it to and paying my student loans only??? I might as well do the 11, get it confirmed and get out of it so the quarterly fees stop. The fees would be the only reason to convert. Then what I have is a contract between me and creditors and my case is essentially closed (that is what the UST said a while ago, and what the judge said today).

We will prob be leaving our house anyhow - so they won't be part of it. I don't know for sure on that yet, but we have to figure that out quick. We have a place to rent if that is the case. I an unsure if we could take the full amount of the rent as an expense, or only the standard in an 11??? Is it like the means test on a 7 where if you are a renter you only get the state standard? If so, then that makes our disposable income look like more again.....

Speaking of the atty for liz and albacore - I met with him and he is not equipped for my case, he said so himself. He said he would do it for a really hefty fee, but I don't need to pay someone to LEARN an 11. I could do that myself. If I can afford this gal I met today, then I might use her....I really don't know.

I got some names and met one of them today at my hearing. The UST gave me names, and one of them was there so I talked to her. Just need to get the $ she would charge us. But other attys SWARMED us afterwards....I mean - were WAITING in line to give us their card. I said "if any of you are standing here and are going to charge me 20K for this - save yourself the time and beat it". LOL

I had to try to fight it, I contemplated just agreeing to the 11 but I thought I would spend 5 years wondering if I should have fought. Now I know.

[2manybills]

TeacherMomma: I guess on some level you are getting your 7 in a weird way.

I'm glad you gave it the "good fight" and glad that I was able to do the little I did.

You know where to find me when it's time for forms or whatever!

[TeacherMomma]

Thanks

[biotechsolution]

I'm trying to understand one point, hopefully you can clear this up for me JustBroke.

If the student loans can't be included in payments for Chapter 7 and are expected to be deferred in any BK proceeding, why would they be able to be paid in a plan for a Chapter 11?

Wouldn't all the other creditors argue that since the student loans can be deferrend during a BK and aren't dischargeabe they shouldn't be paid.

Otherwise the creditors who's debt can be discharged in a BK are at a disadvantage. Especially if there is a considerable payment going to the student loans.

[Chowder]

**raising hand**
Because the creditor -student loans in this case- with the largest amount of debt gets to sign off on the repayment plan, while the lesser creditors have not so much of a say?

[biotechsolution]

But.....the student loans aren't dischargeable so are they really considered a 'creditor' because they have no liability, no risk of the debt being discharged.

Wouldn't a creditor with debt at risk of being discharged have a stronger position in approving the payment plan than a creditor where in reality the bankrtupcy filing has no effect on the debt that your owe them?

[justbroke]

But.....the student loans aren't dischargeable so are they really considered a 'creditor' because they have no liability, no risk of the debt being discharged.

In almost any Court, they don't consider the student loan creditor, who is also a general unsecured creditor, a special class. Since they are not a special class... they must be considered in the same pool. (At least that's my read). That means, they are on equal footing with the other unsecured creditors.

I would just say that just because something is non-dischargeable doesn't mean that they a.) can't be on the plan, or b.) are not a creditor. Case in point, look at the IRS taxes. That is non-dischargeable debt, and included in the Plan. The Chapter 13 (and Chapter 11) plan only provides that "priority" unsecured debt must be paid in full during the plan. IRS tax debt usually has a priority unsecured component and a general unsecured component (which is not entitled to priority). So, just saying because something is non-dischargeable, transforms the creditor into something other than a creditor.

So, you can put your student loans in your Plan of Reorganization so that they don't accumulate.

[TeacherMomma]

Apparantly, in talking more with the UST - they are thinking me/or the atty I hire will want to attempt to get the SLs to be an "impaired" class. So that then the judge can "cram" the plan on the rest of the creditors. I guess as long as an impaired class votes yes on my plan, then the judge can do that (force the plan on the rest). And they are thinking that asking the SLs to extend my repayment term for longer than the 20-30 years, even if by 5 years, which then makes them impaired since they are not being paid according to the promissory note. As it stands now they are impaired cause I pay them when I can....so to them it is either here not there that they stretch it out, they are gonna get more interest that way anyways.

Just a little tid bit of info for ya.

I meet with an atty Monday after work.