2 Time Loser

[Runnin on empty]

Well, next year marks 10 years since the wife and I filed for a 7, and it looks like we're going to be following it up with another. I'm beyond frustrated with myself for getting into the same situation again, albeit for different reasons.So I guess this is my "hey, back in the saddle again" post, as well as to ask some questions regarding my likely choice of action.

First and foremost - with Trump winning the election, I assume that there will be no Student Loan reform? I'm sitting at 100-large right now, and my income is not reflecting the education I have. Do we have any hope of being able to discharge via BK?

Also, I've seen some places like SOFI for refinancing. Say one was to refinance with them and couldn't keep up. Are these dischargeable because they are no longer federal student loans?

With regards to 7 or 13 - if you are under your state's median income, can the trustee still force you into a 13?

We're considering moving to a new state if we can save the money. Would it be better to file now in NY, or wait until we move (most likely FL)?

That's all for now. I remember this place being very friendly and accepting. I'm sorry I'm back but welcome any advice I can get.

[bcohen]

First and foremost - with Trump winning the election, I assume that there will be no Student Loan reform? I'm sitting at 100-large right now, and my income is not reflecting the education I have. Do we have any hope of being able to discharge via BK?

Regardless of who won the election, student loan forgiveness was just a pipe dream. Same with changing the bankruptcy laws to allow for easier discharge of student loan debt. That would require an act by Congress, not the President, and we all know that Congress is bought and paid for by powerful special interests, including the banking industry lobby.

In any case, depending on your age, income, type and amount of your student loans, and likelihood of further increasing your earning potential, it may be possible to attempt a hardship discharge/partial discharge. If your student loans are all or mostly federal, then the amount of indebtedness should not matter, because you can choose an income-based repayment plan. If your student loans are mostly private, then your options are: attempt to discharge them through Chapter 7, file a Chapter 13 to limit the monthly outlay, or simply let them default and structure/conceal your assets in order to dodge collections attempts. Private student loans, even when converted to a judgment, are subject to a statute of limitations, and cannot come after you forever.

Also, I've seen some places like SOFI for refinancing. Say one was to refinance with them and couldn't keep up. Are these dischargeable because they are no longer federal student loans?

Of course, this would not work--the new creditor would simply file an objection to discharge, which would be granted due to the nature of the transaction. You cannot pay your student loan payments with a credit card either, and expect to discharge that credit card. The only way something like this would work is if you took on debt (such as credit cards) in order to pay your monthly living expenses, paid as little on the accounts as possible to keep them current, while using your actual money to pay down the student loans. Then when you can no longer keep up the payments, or your lines of credit are maxed out, you could file BK and discharge those debts, and the student loans would remain paid down.

With regards to 7 or 13 - if you are under your state's median income, can the trustee still force you into a 13?

If your monthly income is higher than your allowable monthly expenses, thus showing disposable income sufficient to fund a repayment plan, then the trustee can file a presumption of abuse. Unsecured debts, such as credit cards and deficiency balances, which are dischargeable are not considered allowable expenses for purposes of the means test.

We're considering moving to a new state if we can save the money. Would it be better to file now in NY, or wait until we move (most likely FL)?

I am not familiar with the bankruptcy exemptions in NY, nor the likelihood of a successful student loan discharge there, but from my time on this discussion board, I have heard that Florida's exemptions are really lousy, especially if you are claiming a homestead exemption.

[justbroke]

First, welcome back, and don't beat yourself up too much. With that type of student loan debt hanging around your neck any change in income or life event would always put you in trouble.

First and foremost - with Trump winning the election, I assume that there will be no Student Loan reform? I'm sitting at 100-large right now, and my income is not reflecting the education I have. Do we have any hope of being able to discharge via BK?

I don't think the president-elect will have anything to do with student loan reform, as it's up to the Congress to decide those issues. Did you look at income based repayment programs?

Also, I've seen some places like SOFI for refinancing. Say one was to refinance with them and couldn't keep up. Are these dischargeable because they are no longer federal student loans?

Dischargeability of student loan debt has nothing to do with whether or not it was issued by the Federal government. Dischargeability is related to whether the debt was "backed" by the government and/or used for an educational benefit. The lender, SOFI, would likely argue that the debt is non-dischargeable because it was both used for an educational benefit, that the refinance does not change the character of a student loan, and that it is backed by the government. At least that's how I think it would go do.

With regards to 7 or 13 - if you are under your state's median income, can the trustee still force you into a 13?

No one can "force" you into a Chapter 13 since a Chapter 13 is voluntary. You would need to decide which works for your situation. If the United States Trustee (UST) finds that you have the means to payback creditors, they will seek dismissal of your Chapter 7. You would be allowed to convert to a Chapter 13 at that point. I would not worry about conversion to Chapter 13 at this point because you are under the median and you automatically "pass" the means test. Only a totality of the circumstances calculation would make it so you wouldn't qualify for a discharge under Chapter 7

We're considering moving to a new state if we can save the money. Would it be better to file now in NY, or wait until we move (most likely FL)?

Florida exemptions are horrible. In New York you can use the State's exemption scheme or the Federal exemption scheme. I don't know which is more advantageous as far at NY versus the Federal exemption and you always need to assess that based on your specific needs. In addition, you would need to be in Florida for some time before you could "use" the Florida exemption scheme. Venue versus domicile are treated differently when you move.

If you're really going to attempt discharging student loan debt, you'll need an expert attorney (that specializes in student loan debt discharges) and also have a really good case for discharging the debt. It's still not easy to discharge student loan debt.

[justbroke]

bcohen and I are saying the same thing. I didn't see bcohen's post before posting mine. In some limited cases, and as bcohen mentions, you may be able to get a partial discharge (aka a reduction of the balance0 on the student loan. You'll still need an expert attorney and an excellent case.