cancel
Showing results for 
Search instead for 
Did you mean: 

Enough debt for Chapter 7?

hih123
Member

Enough debt for Chapter 7?

I was going to file for chapter 7 but realized only 2 judgements worth about 6k (4k if I take a settlement amount) are dischargable. I only make about 1k a month. I have 56k worth of credit card and 1 personal loan that are beyond the statute of limitations. And I have 52k worth of defaulted student loans.

 

I want to ask if only 6k or 4k of dischargable debt and making only 1k a month would likely get the debt discharged through chapter 7 or would it be converted to chapter 13 or dismissed all together? And I want to know if trying to get the student loans discharged through an adversarial action would be worth it. Online it says I'd have to hire an attorney, which I can't afford. thanks

Message 1 of 12
11 REPLIES 11
Disneymom234
Regular Contributor

Re: Enough debt for Chapter 7?

We had a lot of debt past the statute of limitations like you.

In bankruptcy, it is ALL listed, so that would bump up the amount owed tremendously and should easily qualify you for a 7 (I am not an attorney, speaking from experience only)

Talk to a few lawyers and see what they say.

In my case, I did t realize how much even the old debt weighed me down (some I refused to pay because it was bogus crap from an old landlord that locked us out after a job loss and we were 1 day late... and the place flooded when he locked us out. Not my fault/problem at all and he wanted 20k in damages. Mind you, it wouldnt have flooded had he not changed the locks on us, and we lost stuff in the flood as well and couldnt make a claim since he woukdnt let us take pictures.


Anywho, it will discharge all those cc debts, some of those old debts would pop up here and there. Its nice to know they wont anymore. (And havent)

Not sure about the student loans as I never took any out in college.. but seems most that try to do stuff with them on this forum do hire an attorney. Many will take payments Smiley Happy
Chap 7 discharged 12/2018
Car loan 12/2018 Refinanced 2/19
Capital one QS 2250
10/2019 Capital on platinum 3k
1/2019
NFCU Nrewards 6k 2/2019

CURRENT FICO9 Equifax 725

Hubby is on same car loan and Chap 7
Capital 1 platinum 2250 1/2019
NFCU Nrewards 6k
9/2019 Discover it 2100
5/2020

CURRENT FICO8 685
I pay all cards in full every month other than 1
Message 2 of 12
despritfreya
Frequent Contributor

Re: Enough debt for Chapter 7?

Why do you think only $6,000 (the judgments) would be discharged?  According to your post, you owe:

 

$56,000.00 in credit cards;

$52,000.00 in student loans;

$6,000.00 in jugments; and

$????.00 for a debt you think is beyond the SOL.

 

In a bankruptcy, absent a finding of fraud or some other wrong doing, you get rid of $62,000.00 plus the debt you think is beyond the SOL.   You are left with $52,000.00 in student loans (unless you seek and obtain a hardship discharge).

 

What am I missing?

 

Des.

Message 3 of 12
Jenniferinfl83
New Contributor

Re: Enough debt for Chapter 7?

Look, you really want to hire an attorney who is familiar with the Brunner test. 

We paid $1700 for our chapter 7 attorney. We didn't have to do an adversary proceeding, but, failed the means test and should have been a chapter 13 but, managed to successfully argue that we needed to use the higher federal standard housing exemption because even though our house mortgage was cheaper, our expenses were not because we bought an older home that needed work. I could NEVER have pulled that off filing Pro Se. 

If you know what district you will be filing in, you can look up previous cases and see who has successfully represented someone through that kind of proceeding and then obviously pick them as your attorney. 

That was how we picked our attorney, he had gotten someone through at a chapter 7 with $600 showing available towards debt. Of course, we ended up being under the scrutiny of the US trustee, but, it was completely worth it to end up with a 7 instead of a 13. 

 

Bankrutpcy attorneys generally expect to be paid in payment plans. We used our tax return to pay an attorney. 

 

Obviously, just my opinion and not legal advice! Usually it's free to meet with attorneys. I would only bother if you find one that has actually successfully cleared student loans before. 

 

Edited to add a link of someone trying to do it pro se:

https://www.govinfo.gov/content/pkg/USCOURTS-flmb-6_14-ap-00152/pdf/USCOURTS-flmb-6_14-ap-00152-0.pd...

and another link of someone attempting it pro se

http://pacer.flmb.uscourts.gov/fwxflmb/opn/getopn.fwx?id=59063093&kid=097087121065116110100074

 

Basically, the student loans aren't easy to clear.

Starting Score: EQ 595, TU 538, EX 577
Current Score: EQ 642, TU 604, EX 641
Goal Score: 700


Take the myFICO Fitness Challenge

Chapter 7 discharged 2/20/19
Message 4 of 12
hih123
Member

Re: Enough debt for Chapter 7?

Thanks everyone for your replies. I'll definitely file for chapter 7. But the student loans I must reconsider. It seems harder than I thought.

 

The thing that irks me about the student loans is that the original loan amount was only 15k. I paid it down to 10k before I defaulted. I asked if the could suspend payments or they could accept lower payments for awhile. They refused and said I owed the entire monthly payment amount or it would go to collections. So I defaulted. Now there's no Federal repayment options, since I defaulted. They say now the amount is 52k with interested and collection fees. It looks like the Department of Education sold the loan to a private company. I had a few years of tax offset that were supposed to go toward loan repayment, but now I doubt any of that money was credited to my account, since a private company owns the loan. Last year they tacked on 4k of collection fees which seems high. I don't think I'm ever going to get out of this now.

 

Thanks for all of your replies. Jennifer I can't believe how you found those court case examples. You guys are great! Many thanks!

Message 5 of 12
jjb0894
Regular Contributor

Re: Enough debt for Chapter 7?

It really all depends.
Talk to an attorney about it, no BK attorney I know of will charge you for just talking to them.
It really depends on the situation and all the circumstances, and just because they’re beyond the statute of limitations doesn’t mean they don’t exist, they would still be listed in your petition no matter what.
And I really don’t see your case getting converted to a 13 in my own opinion, but I am not a lawyer so don’t take my word for it.

If the student loans are private, they might settle with you.
If they are federal, they won’t settle with you but it’s like any other debt in that it still follows the statute of limitations as far as I understand.

Capital One Platinum MasterCard, $500 Credit Limit.



Credit One Platinum Rewards Visa, $400 Credit Limit.



Indigo Platinum MasterCard, $300 Credit Limit



Chapter 7 Discharge: March 13, 2019

Message 6 of 12
hih123
Member

Re: Enough debt for Chapter 7?

Hi jjb thanks for replying. What has me worried is that there's supposed to be some kind of "hardship" factor that may determine whether a bk is warrented. In my case, the trustee could say, you only have 6k of enforceable debt. If 20% of your income were used to repay the debt, it would be repaid in 3 years. The other debt, while it can be discharged, doesn't require repayment, since they're beyond the statute of limitations. So there wouldn't be enough hardship to qualify for a chapter 7 and I'll move it to chapter 13.

 

If that happened, I'd drop the bk and I'd be worse off than before. Because I waited too long and everything has dropped off my credit report. It's all too old now. My credit score is 675 with nothing on my credit report according to Credit Karma (Experian) except for one sneaky entry. There's an entry from years ago that I closed I think a Chase card with no balance. I think that's there to show I have credit problems. Because, if I had credit years ago, then why is my credit report all but blank? That must mean I had bad credit and it all dropped off. So if I filed, now I'd end up with a bk on my credit report for 10 years.

 

But the reason I can't take a chapter 13 is because all of this is to discharge one of the judgements. It was a bitter small claims case that I won't pay no matter what. So that's what this is all about. I either need to discharge that judgement or not file. I know this isn't smart, but I'll never pay that judgement. Going from a blank credit report to a bk one is fine with me, if I can get that judgement off.

 

I think you're right I need to find an attorney with experience with this specific trustee's office to see how they view these things. Many thanks!

Message 7 of 12
jjb0894
Regular Contributor

Re: Enough debt for Chapter 7?

I don’t think the trustee cares if it’s past the SOL or not because the debt still exists.

Capital One Platinum MasterCard, $500 Credit Limit.



Credit One Platinum Rewards Visa, $400 Credit Limit.



Indigo Platinum MasterCard, $300 Credit Limit



Chapter 7 Discharge: March 13, 2019

Message 8 of 12
jjb0894
Regular Contributor

Re: Enough debt for Chapter 7?

But definitely talk to one, because with debt that old you could be poking a sleeping bear if you’re not careful.

Capital One Platinum MasterCard, $500 Credit Limit.



Credit One Platinum Rewards Visa, $400 Credit Limit.



Indigo Platinum MasterCard, $300 Credit Limit



Chapter 7 Discharge: March 13, 2019

Message 9 of 12
hih123
Member

Re: Enough debt for Chapter 7?

jjb yeah I think so. Some of the debt is 14 years old. Had I filed for bk years ago the bk would have dropped off by now. The debt collector for the student loans is trying to serve me. So things are closing in on me.

 

BTW would you know how to find a bk attorney that has experience in the trustee's office that I'd be filed with. It would be the Centeral District of California, Los Angeles. I tried Googling and just get bk attorneys for the area. I need one with experience with the Los Angeles trustee's office who know's how that trustee's office handles things. Thanks a bunch

Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.