Chapter 7 ?

[Anonymous]

Thinking of filing chapter 7 within the next few weeks. Debit (cc) is climbing and income is decreasing and cant meet utilities, signature loans(late),cc payments and other daily living needs. Concerns:

1. Child is in college and has Parent Plus loan. They will not get if we file. Advise?

2. Car just tanked. Needs 1400$ service. Could charge or try for a 5-9K loan. Would probably get approved for outrageous interest rate auto loan, but dont want it to impact chapter 7 options. 

3.Also, have vacation home with less then 40k  equity. Has a max 2nd morg. on it, but is current. Will we have to lose this property? Thanks. 

[despritfreya]

---

1. Child is in college and has Parent Plus loan. They will not get if we file.

2. Car (need major). . . service. Could charge or try for a 5-9K loan. 

3. Vacation home with less then 40k  equity. . . Will we have to lose this property?

---

1. 11 USC 525( c)(1) prohibits denial of a government loan because of a bk.

2.  Use of the cc now, when you know you are filing bk is fraudulent unless you intend to reaffirm the amount charged. Financing a needed vehicle shortly before filing, IMO, not a problem as you will most likely show an intent to reaffirm and, if you fail to make payments you lose the car.

3.  Use of the cc now, when you know you are filing bk, is fraudulent unless you intend to reaffirm the amount charged. Financing a needed vehicle shortly before filing, IMO, not a problem as you will most likely show an intent to reaffirm and, if you fail to make payments you lose the car.

Des.

[despritfreya]

Obviously something went wrong with #3 above - sorry.  It should have said:

Unless you can find an exemption that protects the equity, yes, you will “lose this property”.

Des

[bstone]

Some misinformation above on PLUS loans. Parent PLUS loans are credit based, and you likely will no longer qualify after BK. The good news is you can have a guarantor (co-signer) help take the loan, then when payments start consolidate the new loan with old loans. Consolidations don't require a guarantor, therefore the guarantor is only on the loan for a few months.

[Anonymous]

Thanks. Dont think co-signer is an option. But do know if student is denied Plus, their stafford loan goes up by 4k which will help. 

[StartingOver10]

---

@Anonymous wrote:

Thinking of filing chapter 7 within the next few weeks. Debit (cc) is climbing and income is decreasing and cant meet utilities, signature loans(late),cc payments and other daily living needs. Concerns:

1. Child is in college and has Parent Plus loan. They will not get if we file. Advise?

2. Car just tanked. Needs 1400$ service. Could charge or try for a 5-9K loan. Would probably get approved for outrageous interest rate auto loan, but dont want it to impact chapter 7 options. 

3.Also, have vacation home with less then 40k  equity. Has a max 2nd morg. on it, but is current. Will we have to lose this property? Thanks. 

---

Sell the vacation home. Even $40k will help you in this time of financial stress. You are more than likely going to lose this vacation home in the Bk and the equity goes to the trustee. Remember, the trustee also gets a commission on the sale of every asset you have over and above the exemption amount. See exemption link below.

Don't know of any exemptions that would allow $40k protected for a second home. Here is a link for you to check the Bk exemptions for your state  http://www.legalconsumer.com/bankruptcy/laws/

Of course the other option is for you to file Ch 13 to keep your assets.

[despritfreya]

---

bstone wrote:
Some misinformation above on PLUS loans. . .

---

 Info not wrong. Simply points out that a bk cannot be used in determining if “they” will qualify, which, I believe was the focus of the post - the effect of a bk . . .

525. Protection against discriminatory treatment

(c)(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a student grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

(2) In this section, “student loan program” means any program operated under title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.

http://studentaccounts.nd.edu/policies-procedures/federal-title-iv-funds-policy/

“Federal Title IV. . . is a term that refers to federal financial aid funds. Federal regulations state that any federal funds disbursed to a student's account in excess of allowable charges must be delivered to the student (or parent in case of an undergraduate PLUS loan).”

See also. . .

http://www.staffordloan.com/stafford-loan-info/government-student-loan.php

Des.

[despritfreya]

---

@bstone wrote:
Some misinformation above on PLUS loans. Parent PLUS loans are credit based, and you likely will no longer qualify after BK. The good news is you can have a guarantor (co-signer) help take the loan, then when payments start consolidate the new loan with old loans. Consolidations don't require a guarantor, therefore the guarantor is only on the loan for a few months.

---

Info not wrong. Simply points out that a bk cannot be used in determining if “they” will qualify, which, I believe was the focus of the original question. . . the impact of filing a bk

525. Protection against discriminatory treatment

(c)(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a student grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

(2) In this section, “student loan program” means any program operated under title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.

http://studentaccounts.nd.edu/policies-procedures/federal-title-iv-funds-policy/

“Federal Title IV is a term that refers to federal financial aid funds. Federal regulations state that any federal funds. . disbursed to a student's account in excess of allowable charges must be delivered to the student (or parent in case of an undergraduate PLUS loan).”

See also. . .

http://www.staffordloan.com/stafford-loan-info/government-student-loan.php

Des.

[despritfreya]

---

@bstone wrote:
Some misinformation above on PLUS loans. Parent PLUS loans are credit based, and you likely will no longer qualify after BK. The good news is you can have a guarantor (co-signer) help take the loan, then when payments start consolidate the new loan with old loans. Consolidations don't require a guarantor, therefore the guarantor is only on the loan for a few months.

---

Info not wrong. Simply points out that a bk cannot be used in determining if "they" will qualify, which, I believe was the focus of the original question. . . the impact of filing a bk

525. Protection against discriminatory treatment

(c)(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a student grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

(2) In this section, "student loan program" means any program operated under title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.

http://studentaccounts.nd.edu/policies-procedures/federal-title-iv-funds-policy/

"Federal Title IV is a term that refers to federal financial aid funds. Federal regulations state that any federal funds. . disbursed to a student's account in excess of allowable charges must be delivered to the student (or parent in case of an undergraduate PLUS loan)."

See also. . .

http://www.staffordloan.com/stafford-loan-info/government-student-loan.php

Des.

[despritfreya]

---

@bstone wrote:
Some misinformation above on PLUS loans. Parent PLUS loans are credit based, and you likely will no longer qualify after BK. The good news is you can have a guarantor (co-signer) help take the loan, then when payments start consolidate the new loan with old loans. Consolidations don't require a guarantor, therefore the guarantor is only on the loan for a few months.

---

Info not wrong. Simply points out that a bk cannot be used in determining if "they" will qualify, which, I believe was the focus of the original question. . . the impact of filing a bk.

525. Protection against discriminatory treatment

(c)(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a student grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

(2) In this section, "student loan program" means any program operated under title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.

http://studentaccounts.nd.edu/policies-procedures/federal-title-iv-funds-policy/

"Federal Title IV is a term that refers to federal financial aid funds. Federal regulations state that any federal funds. . disbursed to a student's account in excess of allowable charges must be delivered to the student (or parent in case of an undergraduate PLUS loan)."

See also. . .

http://www.staffordloan.com/stafford-loan-info/government-student-loan.php

Des.