Student Loan Payments

[willowhare]

As part of my preparation for bankruptcy, I stopped making my debt payments, including student loans (about $250 a month). The people at the loan place put me in forbearence until I could get the bankruptcy straightened out.

I will not be able to discharge this in the bankruptcy. Now, when it comes to the part of the means test where they discuss payments for secured loans (cars/house) presumably things you are still paying and will keep paying as you file chapter 7. Do I include my probable student loan payment here? Doing so would reduce the amount of disposable income it looks like I have, to my distinct advantage. Right now, I have

Or, should I just start making payments again before I start my bankruptcy? Would that be a preferential payment?

[jgordo52]

I can't believe I haven't thought of this before as I am still paying my student loans and are current with them. I'm pretty sure it's not looked at as a preferential payment since I can't discharge them, at least I hope I'm right.

[liz417]

I was told that our student loans would be on "hold" for 5 years (we are ch 13), but the interest would continue accrue while in forbearence. Do not make any payments until you discuss this with your attorney, some districts allow you to include it in your monthly expenses. Are you filing ch 7 or ch 13?

[willowhare]

Am going to try for a ch. 7

However, when worked out my tentative Sch. J., I have a lot of extra income now that I'm not paying anything. By restarting my SL payments and delaying my filing for a least an extra month, I could greatly lower the amount of cash it looks like I have at the end of the month. Hopefully, I can get it down to $300 at the most, then the trustee won't see it as worth the trouble to force me into a Ch. 13.

[CindyLou]

If you can pay them off in the length of the BK, then it is possible you can include them as part of your chapter 13....my brother did. He is in Louisiana.

[danaf]

Yes - you absolutely include them in your schedules since they cannot be discharged. And yes, this will decrease the amount of disposable income. I don't believe they can be included on the means test but it's the schedules that really matter. I put my gov't one in forbearance and just paid the interest. I paid my private one so they wouldn't mess with my interest rate. Student loan repayment is not considered preferential payment just like paying your car loan isn't either.