What if I have no income?

[dustinc]

I live off of student loans and live with my mother. Since the only money I have is from student loans, do I put "zero" for income since a loan is actually not income? Is the Trustee going to question things since I'm going to be so negative at the end of each month? I'm not supposed to include my mom's income since I live with her and she pays for rent and utilities am I? Thanks.

[BobMango]

You may get some questions but really, what can they say? The only issue this would really cause is if you wanted to reaffirm on a house or car. Not going to happen without some means of paying on it.

If you have no income you may want to wait to file until you have some income. Sounds like you are pretty much judgment proof right now. In the meantime it's possible to rack up more debt (medical, accident, etc) that won't be dischargeable post bankruptcy.

[dustinc]

You may get some questions but really, what can they say? The only issue this would really cause is if you wanted to reaffirm on a house or car. Not going to happen without some means of paying on it.

If you have no income you may want to wait to file until you have some income. Sounds like you are pretty much judgment proof right now. In the meantime it's possible to rack up more debt (medical, accident, etc) that won't be dischargeable post bankruptcy.

I have nothing to reaffirm and won't have income for quite some time. I only owe about $10k on credit cards but just got sued for $5k so I want to file before it goes to judgment and they levy my bank account. So I don't have to list my mom's income? I was thinking all household income had to be included. Thanks for the help.

[plisar]

$10,000 dollars in debt is not a lot, especially when you consider that this will be your only bankruptcy for the foreseeable future. I would honestly consider taking the judgment, considering that you have no income for them to garnish, finish up your schooling, and declare bankruptcy when you get a job in which they will have the ability to start taking money from you.

You never know if that debt is going to continue to go up. I'd air on the side of caution and not rush into anything that you can't take back.

[Brazzy]

Also consider that if you need further student loans they may not be available to you due to the BK. Saw a really bad issue like that last summer.

[dustinc]

$10,000 dollars in debt is not a lot, especially when you consider that this will be your only bankruptcy for the foreseeable future. I would honestly consider taking the judgment, considering that you have no income for them to garnish, finish up your schooling, and declare bankruptcy when you get a job in which they will have the ability to start taking money from you.

You never know if that debt is going to continue to go up. I'd air on the side of caution and not rush into anything that you can't take back.

What about them taking money from my bank account? Can't that happen? I do plan on trying to get a job while Im finishing school so I don't have to keep taking more loans out so then they would be able to garnish my wages too. I'm not sure what to do?

If I do decide to file, do I include my moms income?

[dustinc]

Also consider that if you need further student loans they may not be available to you due to the BK. Saw a really bad issue like that last summer.

Really? I never heard of that. Might not be eligible for federal loans or just private?

[Brazzy]

Take a look at your current student loan contracts. Some SL contracts will state that a filing for bankruptcy is considered a default under the terms of the contract (despite not being dischargeable). If you have student loans that are currently in default they will not give you new student loans (private or federal). Consult an attorney on this. I;ve seen this happen at least a dozen times. Makes sure your current lenders do not have the verbiage in the contract that a BK is a default.

[plisar]

What about them taking money from my bank account? Can't that happen? I do plan on trying to get a job while Im finishing school so I don't have to keep taking more loans out so then they would be able to garnish my wages too. I'm not sure what to do?

This is really going to depend upon the state you live in and how much money you have in your checking account. Each state has individual judgment exemptions. Perhaps someone with more experience on this can chime in.

If I do decide to file, do I include my moms income?

This is a question best left to a lawyer. Again, no one knows your personal situation as well as you do, but if your mother is paying things for you, it could very well be construed as income.

[dustinc]

Take a look at your current student loan contracts. Some SL contracts will state that a filing for bankruptcy is considered a default under the terms of the contract (despite not being dischargeable). If you have student loans that are currently in default they will not give you new student loans (private or federal). Consult an attorney on this. I;ve seen this happen at least a dozen times. Makes sure your current lenders do not have the verbiage in the contract that a BK is a default.

Mine are all federal loans and after reading the link below, I think I should be okay. I'm not in default as I am still in school and after starting repayment. http://www.finaid.org/questions/bankruptcy.phtml

[dustinc]

This is really going to depend upon the state you live in and how much money you have in your checking account. Each state has individual judgment exemptions. Perhaps someone with more experience on this can chime in.



This is a question best left to a lawyer. Again, no one knows your personal situation as well as you do, but if your mother is paying things for you, it could very well be construed as income.

I am just living with my mom now. She doesn't give me money. SHe only pays for rent and utilities. I use my loan money to pay for my expenses like gas, food etc. I plan on filing tomorrow. Can someone please tell me what to put for income? I'm confused if I'm supposed to include my moms. thank you

[Brazzy]

Double check on that. Kids have not been able to go back to school cuz of stuff like this.

Let me elaborate a bit more as to the why cuz I'm sure this is pretty shocking and F'ed up at the same time.

Student loans are taken out and are serviced by a servicing Co (AES, Xpress LS, UAS, etc). They are guaranteed by an insurer. In the contract with the insurer their contract will read something along the lines of a claim being submitted for default under the contract. In turn the verbiage is added to the students contract that a BK (along with a laundry list of other reasons) is considered a default. Under these terms something happens (like Bk) that is considered a default. Per OCC guidelines the loan is charged off and a claim is submitted to the insurance. Just like that you now have a charged off student loan on your credit report.

[dustinc]

Thanks for the advice. Anyone know about what I should put for my mom's income?

[plisar]

Agreed with Brazzy on this. Be careful. All my loans are serviced through Direct Loans, and even though I'm in 72 month deferral, my FAFSA came back from my school this year telling me that I was not currently eligible for being default. This does not matter to me since my department is paying for all my expenses and school related fees, and Direct Loans has since rectified the situation, but other servicers are not going to be nearly as kind!

You need to be extremely careful. At the moment, your back is not against the wall. Do not get to the point where it is by declaring early, and losing your only income source.

[dustinc]

Now you guys have me really confused. I don't know what to do. I planned on filing tomorrow. Here is the way I'm thinking. My credit is already screwed from not paying on 4 credit cards for the last year, if I don't file I will have a judgment. So bankruptcy will be on 3 years longer than the 7 years all my late payments will show up. If I don't file then they could levy my bank account and garnish my wages if I get a job while I'm trying to finish school. I could not file and try to wait until I graduate and once I have a full time job I could afford to pay off the credit cards, but I might not make it until then as they could garnish wages and levy bank account. Am I missing something here? Please help because I have to file tomorrow so this doesn't go to judgment.