Student loans b4 or after Ch. 7?

[twinsplus14me]

Can I go back to school, get FA and student loans and then file Ch. 7 (not on the loans of course)? I'm hoping to go back to school and be able to get a decent job in a couple of years. But, I'm not sure if I'll be able to get financial aid if we file BK first. In the meantime, we're being hassled by collection agencies.

I've been told that I should be able to qualify for a lot of FA since we are so low income. Any input is appreciated.

[tdawg]

Can I go back to school, get FA and student loans and then file Ch. 7 (not on the loans of course)? I'm hoping to go back to school and be able to get a decent job in a couple of years. But, I'm not sure if I'll be able to get financial aid if we file BK first. In the meantime, we're being hassled by collection agencies.

I've been told that I should be able to qualify for a lot of FA since we are so low income. Any input is appreciated.

I've heard some people on here say that if you receive a student loan before filing, then you have to include it in your means test 6 month look back, but someone else can clarify.

[jribe]

Can I go back to school, get FA and student loans and then file Ch. 7 (not on the loans of course)? I'm hoping to go back to school and be able to get a decent job in a couple of years. But, I'm not sure if I'll be able to get financial aid if we file BK first. In the meantime, we're being hassled by collection agencies.

I've been told that I should be able to qualify for a lot of FA since we are so low income. Any input is appreciated.

Yes- you can get student loans before or after BK7. Federal Stafford loans (probably not private). If you get the loans before you file (and they are disbursed) you won't have to sign a new MPN.
If you file in between- you need to sign a new one. Just an extra step.

Any "refunded" loan proceeds, will count towards your six-month income.

[tdawg]

looks like I cannot receive stafford loans while bk is active

I filed ch 7, had my 341, and had applied for financial aid. My SAR got a message posted on it that said that I had to contact my school's financial aid office before I could have any financial aid disbursed because I have a bankruptcy active. So, I called the financial aid office and they said they didn't think it would be a problem, but that they would look into it and give me a call back. I received the following email message from my school's financial aid office:

Unfortunately do to your active bankruptcy status you are not eligible for the Federal Stafford loans per the Federal regulations. Once you are no longer in bankruptcy status you will be eligible to take out the Stafford loans. If you have any further questions please feel free to contact our office.

So, it looks like until it's discharged (or closed) that I cannot receive financial aid (Stafford loans at least). From what they said, it seems like it's a Federal regulation, so it would apply regardless of where you went to school.

[jribe]

It must have something to do with the school- because i got Federal Stafford loans while in Bankruptcy.

No issues whatsoever, except resigning a MPN.

If you look up the details for staffords-it also says a BK won't disqualify you.

There must be something else going on with your particular situation.
[

QUOTE=tdawg;363617]I filed ch 7, had my 341, and had applied for financial aid. My SAR got a message posted on it that said that I had to contact my school's financial aid office before I could have any financial aid disbursed because I have a bankruptcy active. So, I called the financial aid office and they said they didn't think it would be a problem, but that they would look into it and give me a call back. I received the following email message from my school's financial aid office:

Unfortunately do to your active bankruptcy status you are not eligible for the Federal Stafford loans per the Federal regulations. Once you are no longer in bankruptcy status you will be eligible to take out the Stafford loans. If you have any further questions please feel free to contact our office.

So, it looks like until it's discharged (or closed) that I cannot receive financial aid (Stafford loans at least). From what they said, it seems like it's a Federal regulation, so it would apply regardless of where you went to school.[/QUOTE]

[mtbc]

I often find that people's opinion changes when I ask them to cite the regulation that they are vaguely alluding to.

[tdawg]

Verifying with the school financial aid office...

Good points. I just emailed them and asked them if they were sure that this is federal regulation because someone I know received stafford loans during their bankruptcy and all they had to do was resign their MPN. I'll keep you all posted what happens. Thanks!

[jribe]

tdawg- were you in default on a different student loan? Or a grant? Both of those situations would disqualify you for a stafford.

Otherwise- i would ask the school to give you proof of their decision.

As I said- I was approved with no problem for Federal Stafford loans for Grad school.

It was a new school (never attended) and i didn't need to give them any information about my filing.

The lender was the one that asked for a new MPN to grant the loan.

The school doesn't "approve" loans- it's actually just them certifying that you are an eligible student and can receive federal loans.

Then the lender is notified by the school, and the lender then will disburse funds to the school, and the school to you- if there is extra.

I would call the school and ask if they certified your status. If not, why?
Then call the lender you selected and ask them of your status.
They usually have a specific department in the student loan area for staffords.

It took me about 2 days to get through with my lender, but it worked out for me.

good luck

[tdawg]

tdawg- were you in default on a different student loan? Or a grant? Both of those situations would disqualify you for a stafford.

Otherwise- i would ask the school to give you proof of their decision.

As I said- I was approved with no problem for Federal Stafford loans for Grad school.

It was a new school (never attended) and i didn't need to give them any information about my filing.

The lender was the one that asked for a new MPN to grant the loan.

The school doesn't "approve" loans- it's actually just them certifying that you are an eligible student and can receive federal loans.

Then the lender is notified by the school, and the lender then will disburse funds to the school, and the school to you- if there is extra.

I would call the school and ask if they certified your status. If not, why?
Then call the lender you selected and ask them of your status.
They usually have a specific department in the student loan area for staffords.

It took me about 2 days to get through with my lender, but it worked out for me.

good luck

Hey Jribe,

I have never been in default on a student loan. I have been going to this school off and on for a couple years, so I have obtained a couple stafford student loans from them before that I listed in my bankruptcy (of course they will NOT be discharged though). Thanks a lot for your input! I sent an email reply to the financial aid office. If they don't respond by Tuesday morning, I'll give them a call.

[florida]

The disbursement does count as income???

I just started a thread on this yesterday and was told that it wasn't included in the 6mo look back period.

Does anyone know for sure?
I'm going to put a call in to our attorney next week.

Thanks.

[lrprn]

The disbursement does count as income???

The key question here is whether borrowed money should count as income or not. In the case of student loans, if you borrow money from a student loan agency you are not issued a 1099 or W2 at the end of the year, and you do not have to include that money in your taxable income. Therefore, it could definitely be challenged if your trustee throws up an objection after filing about not including it in your Means Test income calculations.

Let us know what your lawyer tells you to do in your situation. Unfortunately there could be variability between trustees in how they deal with this issue in their own local courts, so whatever works for you in your area may not hold true for everyone in this situation.