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
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?
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:
and another link of someone attempting it pro se
Basically, the student loans aren't easy to clear.
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!
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!
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