Please help me off this fence - Ch7? - $145k in debt - mostly undischarable

[Anonymous]

Hi,

I have been on the fence about filing ch. 7. I have been on this fence for years as most of my debt will not be discharged in any type of bankruptcy. I talked to a tax/bankruptcy attorney and he said I should stop waffling and file for ch. 7 to get some relief.  I feel like what is the point of filing ch. 7 on roughly $24k that will be discharged, leaving me with still over $100k AND a bankruptcy.  It doesn't make sense. 

Here are my debts:

Non-dischargable:

Student loans: $70k at 6.125% interest, money owed to school $2k (unable to get transcripts)

(Started around $50k, cannot afford the payments to keep up with the interest and this grows $350+ every month) On payment plan of $15 per month. I did not even get to finish my degree. By the time I was midway through 3rd year I was told I could not borrow any more money.  I HONESTLY thought that as long as you were in school getting good grades, you would get funding. I would have went to a way cheaper and less prestigious school if I would have known better. 

Child support: $29k no interest

(Did not know I even owed this until 10 years after it was past due) Making $200 a month payments

Taxes: $21k

(This is my fault, I went to see a Dr. was misdiagnosed, put on meds and screwed my life to bits for 3 years.) Talked to the IRS, they want $270 every month. Will fill out a 433f form to try and get that lowered.  Tax attorney said I could probably get 5-8k of this dismissed. 

Dischargeable debts:

Apartment - $3500

(this is when poop hit the fan and my world imploded on me. It was $5500 and I paid it down until I could not pay anymore)

CC, misc, etc... $20k

Statute of limitations will drop some of this around $6k starting at the end of 2019 through 2024. However, the attorney said that I need to look closer as the SOL goes by the creditor not the debtor.... this confused me, I thought it was the other way around. 

So, why would I file ch 7 except to be able to rent better places and get a car loan without going to a buy here pay here and paying 25% interest.  My truck caught on fire so now I am carless and for some reason I keep going backwards in pay.  I currently make $16 an hour and I was making $70k before this mess; maybe my confidence levels have dropped.  I am in accounting and without that degree, I am in a boat with one paddle. 

I found a degree program through the UK. All I need to do is pay and pass 14 exams, complete 2 projects and I will a master degree from the University of London. I have to pay for travel to these exams as well (NY, TX or CA). So desperately trying to finish the degree to get a better paying job so I can dig out of this.  

I don't know how to get out of this mess.  Other than live in a van for the next two years, which I am not above if I can figure out how to make it work with my  tiny blind dog. I just want to see progress being made.

What the heck would you do? I feel like I am stuck between a rock and a hard place. 

Apologies for the length, but I thought the people here might be able to give me an outside view. 

Thanks for reading

[Anonymous]

Is a Chapter 13 plan doable?

[Anonymous]

Thanks for your reply.  I do not see how ch 13 would be any better than ch 7.  In the end it ends up the same in my case, I am still paying off the non-discharable debts with or without bankruptcy.  I have worked out payment plans with them and am not behind.  The ch 13 would seem to lock me into a more tied position as well as put a black mark on my record as well as stretch the bankruptcy on my record for  13-15 years instead of 10 right?

From your point of view, how would you see ch 13 helping? I guess I do not know why people file ch. 13, except to protect assets, which I have zero.  what would be the benefit in this case?

[Anonymous]

The benefit of a Chapter 13 plan would be that you would discharge your unsecured debt after tha plan, while maintaining a budget for the non-dischargable debts. 

If you already have payment plans you can afford, then it's almost a moot point. You may want to keep this as an option if you get sued by one of your creditors. Otherwise, perhaps waiting for the accounts to be uncollectable is a good option. 

Of course another option would be to look for ways to increase your income (e.g. a 2nd  job/drive for Uber) and reduce your expenses (e.g. eat out less). I am assuming you have already done this.

[Anonymous]

You are in an interestingly volatile position. Previously in a reasonably high-income position, but now falling back to, actually, about where I am (fudge numbers a bit). Comfortable, but not breaking the bank, no? Seeking a respectable degree, presumably that holds your interest, but unfortunately bit off more than you could chew in debt and now can't even unlock your transcripts to continue your degree. A high level of debt, but only 16% of it is dischargeable (by your given estimates), so you're wondering what the point even is.

I have a question. Why the UK program particularly? Is it because you don't have to have your transcript unlocked there?

If you were filing BK7, you would have to save up between $1,000-$2,500 in attorney/court fees before your court would be filed. Here's my thinking, bear with me.

* Start saving. I like automatic savings. Again, you and I are at a similar income level. I'm lucky to be recently discharged so I do not have any of your payments hanging over my head... but I let my pay split, a set amount determined by my expenses into my checking, and then the rest (whatever variable amount) into my savings. 

* I want you to put that savings two places.

1. Unlock those transcripts. 

2. Talk to another BK attorney about EITHER BK7 or BK13. Either one may be appropriate for you, but the point being: Discharge what debt you can. This one is more up to you... and the advice others give you. However, you have obligations on your non-dischargeable side, on your lower income level, and that leans me to the side of "discharge what you can discharge."

* You mention medical issues so now is where I will offer a little unsolicited advice. Get into your state Vocational Rehab (if you are in the states) if you are able. It's not a cure-all for everyone, but they can help you figure out if accounting is the right path forward for you given your student loan load AND your strengths, needs, abilities, limitations, etc. They can also help pay for things like: assessments, TRAINING, assistive tech, equipment and uniforms, etc. depending on what sort of path you end up taking. Heads up, the eligibility process can sometimes take a couple/few months to get you established enough to pay for services. They cannot pay for training you have already done, but if you can get those transcripts unlocked, they may be able to help you going forward in whatever vocation, accounting or otherwise, and that would be a good thing, no? 

* Keep the saving going even after you dispense with those two goals, or even if you don't think those two goals are appropriate for you. You're going to need it. Part of the reason so many of us fall into debt is a lack of accessible cash when we need it. You may not be able to save much at first, but try to start. 

Best of luck, no matter what you decide. 

[Anonymous]

Thank you for reading and replying thoughtfully.  Here are the answers to your questions. 

I chose the UK route because

1. Yes, I can't get the transcripts and all colleges I apply to here insist I give them up.

2.  I have to self pay at this point. So only needing to pay for exams/travel seemed like the best route .

A part of me feels like I should strive to get a better paying job and also a second job and forget about the degree. But I  but feel like the degree is the fastest path to making more money to get out of this mess; I am at a loss.  I have the experince, not the degree. 

I will indeed find a better job, but at the moment, I need my health insurance as I have torn my ACL. BUt crud! There is MORE money out the door to fix this!

I would be able to file ch. 7 pro se.  After talking to the lawyer he said it was straight  forward and in no way do I have any funds to pay him to do it for me.  I am a good study and I asked him a lot of questions, now it is a matter of deciding to go forward. Your thinking on this is the same as the attorney.  I am 100% confident I could file it myself.  I would not be able to file ch 13 myself and can't afford a lawyer nor do I qualify for a pro bono. 

My mental health has been re-diagnosed properly and treatment has commenced.  So I am not sure I would still qualify, but does not hurt to ask them. I will put it on the list to sign up/check into it. 

I have taken many tests as to what I would be good at (from paying high dollars at university to online, etc) they come out pretty much the same.... repeatedly mathematician, actuary, computer science or engineer, etc. nothing lower level at all.  INTP :/ 

I would dig the computer science, but from what I have seen it is an ageist and sexist industry, 2 strikes for me.  I used to work for computer security team and witnessed it first hand.  So, I have a decent background in accounting, would like to have my own accounting firm someday.  

I am trying my best to get to the emergency savings, but that is super tough.  I got up to $350 before I had to use $200 of it to fix my car before it caught on fire a week later. It seems like an uphill battle, but I press onward  

So ch. 7 -argument - create relief, even if it is small could help and not be as detremental as I think.  I guess I keep waiting for the discharagble to fall off.... 

But I feel like I NEED a car to be able to drive where there are higher paying jobs and have read you should not do this 1-3 months before filing... so then I wait some more time?

Has anyone bought a car and then filed right after sucessfully? I will poke thoruhg some threads here. 

Thansk everyone for reading and look forward to seeing thngs from your perspectives.   it is easier to deal with things from the outside looking in sometimes. 

[pizza1]

Student loan debts may be discharged and are up to the judges/trustees discretion, if your attorney can show that it causes you, and have caused you undo hardship. Plus, you never even finished your degree, so you didn't take something away from the school in turn.

You can request that ALL of your SL be included in your BK. If the judge allows it, you will never be able to apply for federal school loans again though. Only private SL if you decide to go back to school.

Child support will not be DC, and depending on the situation, the judge may impose that the IRS make more a effort to work out a payment plan thats more in step with your income level, and/or DC part of the debt.

Get another Attorney/2nd opinion....

[Anonymous]

Thank you pizza1. 

After reading your reply, you sparked me to do further research.  I have found a lawyer who discusses the myth that SL is not dischargeable and hits on what you have said here as well. 

According to what I am reading, due to my circumstances, I mitght be able to get some relief.  

And thanks to you  sparking my brain to go deeper, I read that in order to have SL discharged you have to file an advesary pleading and read statistaclly, 2 out of 5 got some form of relief.  Most people do not know they have to do this or not equiped to do it. 

Reuters.com article

I will be contancting this lawyer, tehy seem to be knowledgeable in the backruptcy laws and litigation, as well as having a managing partner being a trustee. Sounds expensive, but cost efficent and worth the money. I will set up an internview. 

[pizza1]

---

@Anonymouswrote:

Thank you pizza1. 

After reading your reply, you sparked me to do further research.  I have found a lawyer who discusses the myth that SL is not dischargeable and hits on what you have said here as well. 

According to what I am reading, due to my circumstances, I mitght be able to get some relief.  

And thanks to you  sparking my brain to go deeper, I read that in order to have SL discharged you have to file an advesary pleading and read statistaclly, 2 out of 5 got some form of relief.  Most people do not know they have to do this or not equiped to do it. 

Reuters.com article

I will be contancting this lawyer, tehy seem to be knowledgeable in the backruptcy laws and litigation, as well as having a managing partner being a trustee. Sounds expensive, but cost efficent and worth the money. I will set up an internview. 

---

I hope youre able to get some relief, and yes, make an appointment asap with your attorney again. Much luck to you, and please come back and update your thread from time to time to let us know whats going on

[Anonymous]

You can get Accounting jobs without a degree if you have the experience. I now hold my second Controller position without having one myself.

Find ways to apply that aren't online. If a checkbox on an online app makes you indicate that you don't have a degree, you get automatically disqualified without anyone ever seeing your resume. Recruiters and temp agencies are good for this. Also, look for other ways to get your resume in front of companies that are hiring. (and make sure your resume is GOOD . . get help with it if you need to.) Surprisingly enough, the fax machine can still be good for this. If they are receiving hundreds of emailed resumes, yours arrives via a different method and in a much smaller pile. Networking on LinkedIn is helpful as well. 

If the education section on your resume is lacking, don't include one. Send a great resume highlighting your experience and once you are talking to someone you can diffuse the missing degree by talking about your accomplishments.

Best of luck to you