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    #1

    Student Loans refund

    Hello everyone,
    I am a college student. I am thinking about filing Chapter 7. I have like $22000 in credit card debt. I am unemployed for like 2 years already. I am expecting to get my financial aid refund check (all of the refund is from student loans) in Jan 20. If I file the bankruptcy in Jan 29, what should I do with my financial refund check? Should I cash it? Or Wait until my 341 meetings is over and deposit into my account. Please help me.

    Thanks so much
    Tags: None
    #2
    Originally posted by tianh2002 View Post
    Hello everyone,
    I am expecting to get my financial aid refund check (all of the refund is from student loans) in Jan 20.
    Well, that's a problem. When you file for BK you need to not only declare what you assets are now but any significant income you expect to have in the future. Hiding the fact you have a check is fraud.

    I don't really understand what you mean by a refund check anyway. Do you mean money you get from the school in excess of tuition?
    So the poor debtor, seeing naught around him
    Yet feels the narrow limits that impound him
    Grieves at his debt and studies to evade it
    And finds at last he might as well have paid it.

    Comment

      #3
      Thank you for your help.

      The refund check is the money that I get from the school in excess of tuition. All of them are student loans. But if I don't deposit them or cash them out, how do the trustee find out that I have the check. I really don't want to deceive the trustee at all. But I just don't want the trustee take all of my student loans refund check either. Maybe I can wait until I use most of the student refund check and file for Chapter 7.

      Comment

        #4
        Originally posted by tianh2002 View Post
        Thank you for your help.

        Maybe I can wait until I use most of the student refund check and file for Chapter 7.
        That would be the best approach.
        So the poor debtor, seeing naught around him
        Yet feels the narrow limits that impound him
        Grieves at his debt and studies to evade it
        And finds at last he might as well have paid it.

        Comment

          #5
          Definitely use up as much of it as you can and maybe you can exempt the rest? I would imagine if you wait until February that you could pay February and March's rent with it, and stock up on groceries, etc. Do you know how much cash you can exempt? I think it's a lot safer just being transparent about it.

          I've heard some people say that you are supposed to count student loans in the 6 month look back period for the means test and some people say you don't. It seems to me like you wouldn't have to, but that's something to think about.

          Good luck!

          Comment

            #6
            Unused portions of your refund check have to be exempted as a cash asset. If you have the wildcard or cash exemptions available to exempt the money then you will not have to wait to spend it all, but if you do not have the exemptions available then spend the money and then file.
            You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

            Comment

              #7
              Well, I will be expected to get $5000 in student loan refund from my school. And I just got full time job after 2 years of unemployment that pay me $1840 a month. So I am afraid that I can't spend all of the money. If I use the $5000 to pay off my student loan and file Chapter 7, will the trustee see as "preferential payments" and dismiss my case?

              I live in Ohio. So my cash exemption is only $400. and the wild card is $400. So total I only have $800 for cash on hand. Is there anyway my student loan refund be exempt?


              Thanks so much
              Last edited by tianh2002; 01-16-2010, 06:46 AM.

              Comment

                #8
                Originally posted by tianh2002 View Post
                Well, I will be expected to get $5000 in student loan refund from my school. And I just got full time job after 2 years of unemployment that pay me $1840 a month. So I am afraid that I can't spend all of the money. If I use the $5000 to pay off my student loan and file Chapter 7, will the trustee see as "preferential payments" and dismiss my case.

                Thanks so much
                It would be safer to spend the money on expenses and necessities and then file. Do you have the bankruptcy exemptions available to cover the refund? What state are you filing in?
                You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

                Comment

                  #9
                  Remember, now that this "refund" (excess over school tuition), if used does not go away - it is still a student loan and will need to be repaid in the future. That excess you are receiving is to go to books, computer, school related expenses, etc. My daughter has gone through the same thing and she has ensured she now only gets enough financial aid to cover tuition/books so she is not hit in the future with higher amounts to pay.
                  _________________________________________
                  Filed 5 Year Chapter 13: April 2002
                  Early Buy-Out: April 2006
                  Discharge: August 2006
                  "A credit card is a snake in your pocket"

                  Comment

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