I am filing for Chapter 7 and had a few questions about students loans. I am in graduate school and am graduating after this term. I am filing Chapter 7 to discharge medical debts and some overwhelming credit cards debts, since I know I will spend the next 30 years paying off student loans! My question is, when I fill out Schedule B, do I have to list my next student loan disbursement? I am filing a couple of days before the disbursement. When I fill out Schedule I, do I list my student loan disbursements as income? Obviously it has been what I have been living off of for the past 8 years, but since it is a loan, does it technically count as income? I have a job that pays me 125 every other week, and that was the only income I listed on my taxes, but I wasn't sure if this is different or not. Thanks for your help!
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Do you have a lawyer? When it comes to students filing bankruptcy and dealing with financial aid it just makes my head hurt.
You say the that the student loan will be disbursed before you file but what do you mean by that exactly. Will the disbursement go into your bank account or to the school. The thing I would be most worried about is having cash in the bank on the day you file.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. -
I don't know the answer to your question, but it doesn't seem right if you have to claim a student loan disbursement (to you) as income when you owe that money...Originally posted by ngddvm View Post
Of course I may be thinking about this from a completely wrong angle.
Filed Ch.7 on 03/17
Statement of Presumed abuse filed 707(b) 05/03
Statement of Non-Abuse filed!!
Discharged 06/23/10
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I think you will find out that the balance of those funds that you receive after any school gets their share will be counted as income.Comment
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I know for some people it is a gray area when they take out 403b or 401k loans, because it is essentially money they are borrowing from themselves, yet at the same time they cannot count the loan payments as expenses in many states....
As for student loans, I agree with Meatstick, I believe any extra money from the loan above and beyond the tuition, etc would be considered as income, even though you are borrowing it.
It is just like in my state I am not allowed to count student loan payments on my expenses, even though they are HUGE, because they can be held in forbearance during a bankruptcy so are not truly considered "secured debt" even though you have to pay them. I guess it is because you "have to pay them" but not necessarily "right now", like in the case of deferments or forbearances.
Student loans are a real headache in bankruptcy. You can't claim them in so many ways, yet you can never escape them either (which is fine, I don't mind paying back money for education but I just feel you should get to calculate it as an expense in all states).Comment
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If you can wait until the day after disbursement, I would do that. That is what I am doing. I have yet to find direct answers about student loans, seems like it is a case by case situation. I think a lot depends on your school, your lender, and the type of loan. You would probably be better off asking your financial aid office. If you can find someone that has worked there a while, not just a temporary student employee, I'm sure they have had that question.I am not an attorney and any advice given is simply opinion based on my personal experiences. Always ask an attorney before making legal decisions.Comment
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