student loan and BK..m

[graciebeth]

Ok for those not following or familiar with my story I have been summoned to court on Dec 1st by Capital One. my only income is SS money because my husband died of cancer I have the 3 kids now(17,15,11)

I am not working and have gone back to school full time. I was going to try to get a student loan to cover costs,especially next semester since I'll have to take all classes at the main campus in the next county.

Would it be best for me to apply for the student loan BEFORE fililng, or do I need to file first? or is this one of those rock and a hard place situations?.. I really could use the money to survive on,but really need to file BK too.. if I get the student loan would I need to wait a certain timespan befor filing? or vice versa?

Also this. I was going to pay off my van with student loan money too, if I go ahead and get the loan do I still need to do that, or do I need to do a re-affirm thru the BK on it?? its a 96 caravan with near 200,000 miles on it btw. would I be better to use that student loan money to pay off people that I owe but NOT pay off the van?? I mean assuming I could even get the student loan.

helllllppppppp

-grace

[dealingsdone]

Wow, what a coincendence. I just finished filling out my student loan papers this morning. I did not think about the ramifications regarding my 341 meeting later this week. Maybe I should have waited, I'll be curious to know if there is any benefit to waiting.

[jribe]

the only issue with getting the loan before you file, is that it may delay things if you're not disbursed before you file. Most likely, you'll have to sign a new MPN before they will do any disbursements. So if you wait until after you file it's one less step.

what do you mean use the money to pay off money to people you owe? Like creditors (cc's etc?) - unless you only have a very small amount of debt - i wouldn't recommend this. BK is the better option if you need to discharge your debt.

Also, be aware that if you pay off your van, and cannot exempt it- it can either be taken and sold by the trustee, or you will have to buy it back from teh trustee. So it's probably better to leave the lein on it...

Ok for those not following or familiar with my story I have been summoned to court on Dec 1st by Capital One. my only income is SS money because my husband died of cancer I have the 3 kids now(17,15,11)

I am not working and have gone back to school full time. I was going to try to get a student loan to cover costs,especially next semester since I'll have to take all classes at the main campus in the next county.

Would it be best for me to apply for the student loan BEFORE fililng, or do I need to file first? or is this one of those rock and a hard place situations?.. I really could use the money to survive on,but really need to file BK too.. if I get the student loan would I need to wait a certain timespan befor filing? or vice versa?

Also this. I was going to pay off my van with student loan money too, if I go ahead and get the loan do I still need to do that, or do I need to do a re-affirm thru the BK on it?? its a 96 caravan with near 200,000 miles on it btw. would I be better to use that student loan money to pay off people that I owe but NOT pay off the van?? I mean assuming I could even get the student loan.

helllllppppppp

-grace

[graciebeth]

Ok Im not sure what you mean by disbursed?? Do you mean that id have to be able to account for where the money from the student loan went?

And by paying people off I mean people in my life like my mom, neighbor, etc etc..

and yeah I figured it would be best to keep the lien on the van,but wanted to ask to make sure.

-grace

[jribe]

Ok Im not sure what you mean by disbursed?? Do you mean that id have to be able to account for where the money from the student loan went?

And by paying people off I mean people in my life like my mom, neighbor, etc etc..

and yeah I figured it would be best to keep the lien on the van,but wanted to ask to make sure.

-grace

when you get a student loan there is a "disbursement" of the loan. You typically don't get the whole loan at once. For example if your qualified expenses are 15,000; and it's for the 2009-2010 school year; there are typically 3-4 disbursements of equal amounts.

DO NOT pay back your friends, neighbors, mom, etc before you file BK. The trustee can go back and get the money from them.

[backtoschool]

If you are still planning on filing for bankruptcy this year and you pay back any family members with that student loan money, then the trustee will go after those family members to get the money back, because it will be considered a preferential transfer.

Student loan disbursements first go to pay any tuition and University fees, then they go to student housing and meal plans if you are on either, then you will get what is called a "refund", which will either be direct deposited to a bank account or you will be sent a check.

If you get the disbursement before you file, you will have to count the refund part as a cash asset and exempt it, unless you spend it all before you file.

[coolmom04]

If you are still planning on filing for bankruptcy this year and you pay back any family members with that student loan money, then the trustee will go after those family members to get the money back, because it will be considered a preferential transfer.

Student loan disbursements first go to pay any tuition and University fees, then they go to student housing and meal plans if you are on either, then you will get what is called a "refund", which will either be direct deposited to a bank account or you will be sent a check.

If you get the disbursement before you file, you will have to count the refund part as a cash asset and exempt it, unless you spend it all before you file.

So if you get the student loan "refund" before you file and you need to spend it, do you HAVE to spend it on "qualified" expenses? I am supposed to get a small loan for this coming semester, but haven't accepted it yet. I thought I could count my college tuition on my BK, but can't, so I'd rather get the loan, get the refund, and use that money to pay for tuition for the summer semester. But, it'll be sitting in savings until then.. is that okay? Or, do I need to spend it on qualified stuff - like clothing, food, household stuff?

ETA: I am filing in July.

[DebtHater]

Gracie, please don't take what I'm going to say as a personal attack but I think I'm missing something in the translation. During this BK process the furthest thing from my mind is taking on new debt when I can't pay the debt I have, hence the reason most of us are here to begin with.

When I met with my attorney he recommended to me to open a secured CC to rebuild my credit after I'm discharged. Rebuilding my credit is the last thing I'm concerned with. In the 10 years it takes for the BK to drop off my credit reports my goal is not to have "good" credit or "bad" credit, but to have NO credit and to live strictly a cash flow lifestyle.

[pcn]

Gracie, please don't take what I'm going to say as a personal attack but I think I'm missing something in the translation. During this BK process the furthest thing from my mind is taking on new debt when I can't pay the debt I have, hence the reason most of us are here to begin with.

When I met with my attorney he recommended to me to open a secured CC to rebuild my credit after I'm discharged. Rebuilding my credit is the last thing I'm concerned with. In the 10 years it takes for the BK to drop off my credit reports my goal is not to have "good" credit or "bad" credit, but to have NO credit and to live strictly a cash flow lifestyle.

Debthater, I guess I'm missing something too. So you would recommend against someone working to better themselves? It seems logical that Gracie is trying to improve her education and get a better paying job. Most people don't take college classes to kill time, (unless they are so well off that they don't even have to work...). The only recommendation I have for Gracie is make sure there is no left over money in your checking when you file, as has been previously recommended.

[DebtHater]

So you would recommend against someone working to better themselves? It seems logical that Gracie is trying to improve her education and get a better paying job.

I never said I'm against someone bettering themselves, especially working to better them selves. Key word, working. Not filing for BK just to turn around and take on more debt. That is the issue I have.

Here is a single mother unemployed and raising three kids. In my opinion it doesn't seem like the best time to go back to school and try to feed three little mouths. Yes it's unfortunate how this came about as it's hard to loose someone you care about. Since there is no mention of life insurance there may not have been any.

There are too many people that think the only way to buy cars or go to college is to go into debt to do it. Only to turn around and get bitten (again) later on. Right now it's student loans, then it's something else, then it's something else after that and before you know it some people end up right back where they started.

I understand BK is meant to be a fresh start and am not criticizing anyone for filing if it's a last resort. I believe it's important to remember how we got to where we are how to prevent the viscous cycle from starting all over again.

The OP asked for advise on her situation and I am giving my opinion as I'm an expert in my own opinion. Does everything I'm outlining apply or will apply to her. Probably not. There are, however, too many people out there that think BK is a game. They wipe the slate clean, rack up more debt and file again. All I'm saying is wipe the slate clean and start over again... the right way.

[creditgone]

I am attending school too and am curious to find out about this. I get a reimursment check every semester too but I use it to pay for summer courses and school supplies and gas because my school is so far away. Its not much only like 1K

[coolmom04]

I am attending school too and am curious to find out about this. I get a reimursment check every semester too but I use it to pay for summer courses and school supplies and gas because my school is so far away. Its not much only like 1K

That's what I use my reimbursements for, too... so now I am worried b/c I usually leave it sitting in the savings account until it's time to pay for summer tuition.

[hopeforus]

I am also a student and I learned that if you accept any LOANS... then when you file they automatically get turned into "make payment" status. So you will have to start making payments on any Stafford loans as soon as you file bk. It's best to accept the loans after you file. Wouldn't make sense to accept only to have to start paying on them right away. I only have accepted my grants and scholarships. I will receive 2k over what my tuition is that I will have to spend.

[coolmom04]

I am also a student and I learned that if you accept any LOANS... then when you file they automatically get turned into "make payment" status. So you will have to start making payments on any Stafford loans as soon as you file bk. It's best to accept the loans after you file. Wouldn't make sense to accept only to have to start paying on them right away. I only have accepted my grants and scholarships. I will receive 2k over what my tuition is that I will have to spend.

So even for loans that are in forbearance? I had one student loan stopped for one year due to financial hardship.

[hopeforus]

So even for loans that are in forbearance? I had one student loan stopped for one year due to financial hardship.

Honestly... I don't know. I just know that I saw when I was about to sign... that it mentioned if bankruptcy was filed then payments would start.
I'm trying to find the information now and of course I can't!