Unsecured Non-Pri Claims Red Flag

[loonzilla]

I've read a red flag goes up whenever someone files BK chapter 7 when unsecured non-priority claims are over 100K. Question...is this still a red flag when 1/2 of the amount is for student loans? Or, are trustees looking for amount owed to CC when looking over the schedules? You'd think you wouldn't be red flagged when 1/2 of your debt can't be discharged anyway, but, you never know. Appreciate your thoughts!!!!

[Spartan]

I've read a red flag goes up whenever someone files BK chapter 7 when unsecured non-priority claims are over 100K. Question...is this still a red flag when 1/2 of the amount is for student loans? Or, are trustees looking for amount owed to CC when looking over the schedules? You'd think you wouldn't be red flagged when 1/2 of your debt can't be discharged anyway, but, you never know. Appreciate your thoughts!!!!

Student loan is not dischargeable. Don't worry about the red flag. One look at your case, the red flag goes right back down... IF you got nothing to hide, let them audit all they want.

[treehugger1]

"Red flags" are probably more common when you have a high income. In my case, I would have 150K in unsecured, but like you, 1/2 of it is student loans. I have high income and would expect some scrutiny, but most of my cc's I've had for 10 15 years, and my student loan payment is $580/month. If any "red flags' should go up, it should be to question why the cc's didn't cancel my accounts given the enormous unsecured debt. They should be held accountable for "loaning" the money in the same manner I am held accountable for "borrowing" it. Spartan's correct, if you are up-and-up, I would not worry about it.

As a side-note, I find it interesting that unsecured creditors tend to ignore you student loan debt when they decide to loan you money. I don't understand this.

[SinkingFast]

I think any high level debt case is gonna get more than a cursory look.

The Local and UST are gonna look for Totality of Circumstance. Job loss with extended unemployment. New job at significantly reduced pay. Did you have to move to become re-employed. Death of a spouse. Medical issues. Things beyond the control of the Debtor/Filer.

They'll probably look at accts too. You have to list when accts were opened on your Schedules. So is this a mound of debt that built over the course of many years. Or was it the result of a flurry of cards recently acquired.

Lots of things go into the decision to press for more information and documentation than a simple +$100K debt figure.

[loonzilla]

Stupid question...how do I find out the "birth" date of my unsecured accounts? I've had my CCs for at least 7+ years but have no idea of the origin date for the account. Would pulling my credit report assist?? Thx.

[SinkingFast]

Yep.

The date accts are opened will be noted on your Credit Reports. That's how our paralegal got our acct open dates for our BK filing. Heavens knows we didn't know!!

[treehugger1]

If and when I finally need to file, it will be clear that income dropped by 15% - 25%. I have no new credit cards in the past 14 months. There are only two of these. The others are 5 - 20 years old and have been close to maximum for a long, long time. The last time I used a card was four months ago. I also bought a new vehicle in November, but my job requires traveling and I can easily justify the need for a car that gets great gas mileage. I also pay a bit when I can. If you are concerned that you racked up a great deal of debt in a very short time, you might want to wait several months, maybe make some token payments, etc. Yet, attorneys I spoke with claimed it was irrelevant with the exception of the 70 - 90 day rule. Still, if you can wait and "prepare," why not take the time to build distance.

[loonzilla]

Thanks for the info!!! Minimal debt in the past 6 months...started planning in December, so no issues in that department. No "hidden" assets or strange charges except high monthly medical prescriptions which I have receipts for. Hoping for a smooth filing in June/July timeframe and never would have been close to being prepared if it wasn't for this forum. Research, planning, and patience have been keeping me sane getting prepared for this. Thanks!!!

[Donald Baker]

speaking of flags, mine says "debtor ed, meansno. " I know what the debt ed is but what is the meansno?

[lrprn]

speaking of flags, mine says "debtor ed, meansno. " I know what the debt ed is but what is the meansno?

debted = Financial Mgt-Debtor Education Certificate Due
meansno = no presumption of abuse (that's a good thing!)

Here's a link to PACER flag definitions...it's the same list of definitions for every state that posts bk cases to PACER - https://ecf.neb.uscourts.gov/cgi-bin/CourtInfo.pl . Hope this helps!