Student Loan Refund Disbursement as Income?

[dumpinmydebt]

Hello,

This is dumpinmydebt's wife. Love this forum by the way and I really appreciate everyone's help.

I've searched the forum and have found posts related to this, however, it seems there is no clear answer.

I'm filling out Schedule I and just don't know about this one. What about Student Loan Disbursements? This is the check we receive after the tuition/fees have been paid.

I see some posters say it is not income, rather it is a cash asset in which would need to be exempted. In this scenario, I do have questions. We already received one at the end of July. Have the receipts for what it was spent on. All on bills and necessary expenses. And $300 is going to the filing fees. Now we are planning on filing September 27th or October 4th. We expect to receive 2 more refund checks around mid-end of October. I can see what is pending, however, we don't have the "true" disbursement amount until 2 days before the check is mailed. So how would I exempt cash that I don't know exactly how much it would be?

I see other posters say it is considered income, since we are technically receiving these proceeds for living expenses. So I'm going to take the checks I've received for the last six months and average it out as monthly income?

I don't have a problem doing either, we'll still be under the median and I haven't used the wildcard exemption yet, so I'll be able to exempt it all, I'm just concerned I'll do the wrong one. What do you think?

We're filing pro se.

Thanks!

[backtoschool]

Hello,

This is dumpinmydebt's wife. Love this forum by the way and I really appreciate everyone's help.

I've searched the forum and have found posts related to this, however, it seems there is no clear answer.

I'm filling out Schedule I and just don't know about this one. What about Student Loan Disbursements? This is the check we receive after the tuition/fees have been paid.

I see some posters say it is not income, rather it is a cash asset in which would need to be exempted. In this scenario, I do have questions. We already received one at the end of July. Have the receipts for what it was spent on. All on bills and necessary expenses. And $300 is going to the filing fees. Now we are planning on filing September 27th or October 4th. We expect to receive 2 more refund checks around mid-end of October. I can see what is pending, however, we don't have the "true" disbursement amount until 2 days before the check is mailed. So how would I exempt cash that I don't know exactly how much it would be?

I see other posters say it is considered income, since we are technically receiving these proceeds for living expenses. So I'm going to take the checks I've received for the last six months and average it out as monthly income?

I don't have a problem doing either, we'll still be under the median and I haven't used the wildcard exemption yet, so I'll be able to exempt it all, I'm just concerned I'll do the wrong one. What do you think?

We're filing pro se.

Thanks!

Student loans are not income.

The cash left over (ie your refund after tuition is paid) that is still sitting in your bank account when you file (ie it has not been spent yet on anything) has to be exempted as a cash asset or it becomes part of the estate.

[dumpinmydebt]

Thanks for your reply.

So if none of the cash is in there, because there won't be once we file, then there is no exemption for it.

But do I exempt what I expect to receive before the 341 meeting?

[backtoschool]

Thanks for your reply.

So if none of the cash is in there, because there won't be once we file, then there is no exemption for it.

But do I exempt what I expect to receive before the 341 meeting?

Yes you should definitely exempt what you expect to get before the 341 meeting. You can use unused homestead exemption or wildcard exemptions to exempt the money.

[dumpinmydebt]

Yes you should definitely exempt what you expect to get before the 341 meeting. You can use unused homestead exemption or wildcard exemptions to exempt the money.

Thank you!!!

[kartoons19]

Thanks for your reply.

So if none of the cash is in there, because there won't be once we file, then there is no exemption for it.

But do I exempt what I expect to receive before the 341 meeting?

I got a distribution between filing and the 341 that I was concerned about losing because Colorado does not have a cash exemption or wildcard. My attorney said it wasn't an issue because I received it after filing. She was right, it wasn't an issue. Of course, along with everything else, this probably varies with each district, but that was my experience. Good luck.

[dumpinmydebt]

I got a distribution between filing and the 341 that I was concerned about losing because Colorado does not have a cash exemption or wildcard. My attorney said it wasn't an issue because I received it after filing. She was right, it wasn't an issue. Of course, along with everything else, this probably varies with each district, but that was my experience. Good luck.

Thanks!

[JoJoCal19]

I got a distribution between filing and the 341 that I was concerned about losing because Colorado does not have a cash exemption or wildcard. My attorney said it wasn't an issue because I received it after filing. She was right, it wasn't an issue. Of course, along with everything else, this probably varies with each district, but that was my experience. Good luck.

This was my EXACT experience. I had met with an attorney on a Wednesday and I didn't have a clue how that worked. When he found out I was getting a school loan disbursement on Friday that's when his demeanor changed and he advised me if I wanted to keep it I had better file Thursday. Needless to say I got everything done and filed on Thursday. Me bringing that up as one of my many questions saved me thousands of dollars.

[kartoons19]

This was my EXACT experience. I had met with an attorney on a Wednesday and I didn't have a clue how that worked. When he found out I was getting a school loan disbursement on Friday that's when his demeanor changed and he advised me if I wanted to keep it I had better file Thursday. Needless to say I got everything done and filed on Thursday. Me bringing that up as one of my many questions saved me thousands of dollars.

That's good it worked out for you. I was really concerned about it too, because I got laid off after filing so I needed that disbursement more than ever! By the way is 19 your favorite number too?

[dumpinmydebt]

This was my EXACT experience. I had met with an attorney on a Wednesday and I didn't have a clue how that worked. When he found out I was getting a school loan disbursement on Friday that's when his demeanor changed and he advised me if I wanted to keep it I had better file Thursday. Needless to say I got everything done and filed on Thursday. Me bringing that up as one of my many questions saved me thousands of dollars.

That's good to know. I was a bit worried too when I realized there was no way I was going to be able to exempt it all since my state has such tiny exemptions. And, it's not like I'm just pocketing the money, my hubby needs it for dental work(crown.)

Thanks everyone. We're poor and we have pretty much nothing, so I don't see any issues arising with our bankruptcy. Which is good. We're both ready for a fresh start and to rebuild our lives and credit.

[bigtim6656]

Mine told me to wait , exempt the property I spent it on and then file. Since some of it is for clothes, food and my lawyer filing fee it will not be hard since my wildcard is 8k

This was my EXACT experience. I had met with an attorney on a Wednesday and I didn't have a clue how that worked. When he found out I was getting a school loan disbursement on Friday that's when his demeanor changed and he advised me if I wanted to keep it I had better file Thursday. Needless to say I got everything done and filed on Thursday. Me bringing that up as one of my many questions saved me thousands of dollars.

[JoJoCal19]

Mine told me to wait , exempt the property I spent it on and then file. Since some of it is for clothes, food and my lawyer filing fee it will not be hard since my wildcard is 8k

Yea my problem is Florida's $1000 total exemption so I had to file before rather than blow through it on exempted things.

[bigtim6656]

true, each state goes by it's own rules. I go lucky and mine is a wildcard so I can spend it as I see fit within reason. Going to buy a new computer, tires, food, lawyer fees, work on my jeep, and a few little things. Which minus the lawyer fees is how I planned to spend it.