341 today

[jrsmom]

Daughter had 341 meeting today for BK7. Trustee says she doesn't pass means test. Says the $400 + per month payment to student loans can't be included to help her pass the means test. WTF! Seems stupid since they aren't dischargable and have to be paid! Trustee even said it wasn't fair but when Congress wrote the new BK laws this little tidbit was included
Very frustrating! Her attorney told her it could be another 2 or 3 months before they know how this is going to pan out. I'm guessing the worst that can happen is they make her change to chapter 13?

[lrprn]

Sorry to hear that your daughter got caught up in the black hole of student loans in bankruptcy. That's a mess we can thank our 2005 congress members for in spades. Very shortsighted to make student loans non-dischargeable but still treat them like they were credit card debt and don't count into your expenses. Stooooopid.

Worst that can happen is the trustee will push your daughter into Ch 13. It's not the end of the world. Just takes a lot longer to discharge the debt, that's all. It's still a 1000% percent better than a hopeless slide farther and farther into debt with liens and garnishments, foreclosures and never-ending collection calls. Oh yeah....a LOT better!

[danaf]

is this the case for every trustee & student loans? or is it randum?

I've been told by attorney's that it can be included in expenses for a 7. I passed the means test without including my student loans. And I was specifically told that they go under schedule E for priority debts and do not have anything to do with whether you can file or not. I really need to find out if including my student loans will screw up my 7 - or I'll have to find another way to deal with that $420.

[danaf]

let me also add, that if student loans cannot be included in expenses, then i will probably consider buying a second beater car, and tagging it just to get the around this farse. The tags, registration, gas - and federal exemptions for a second car would probably cover my student loan cost. I read about this loophole somewhere on this board - buried deep in the past.

[erinmi]

We were allowed to include our student loan payment on our chapter 7 schedule J. Had no problems with our trustee: just asked if they were loans from our own education or for others.

Is her income higher than the median? If she is using the payment in the actual means test, then I do see where the trustee is coming from since there is no category for those in the allowances.

Sucks, though, doesn't it!

[woohoogirl]

I was hoping this would go smoothly for her, but lrprn is right, this is still better than it was. Tell her to keep her chin up.

[aachudneymiles]

sorry to hear this, i agree It's bull

[jrsmom]

Thanks for all the replies. You are all great!!! The whole problem is that she is over the median income. If they included the payments on her student loans in the means test, all would be ok, she would fit into the "7" with no problems. Do the Feds think because they don't include them that they go away? UGH!!!!!!!!! I did tell her that I thought the worst that can happen is they'll make her go with a 13 and in the meantime, just pay the bills she has (house, car, etc) and not worry about the rest. Told her just keep looking forward, one step at a time. She did admit that the one bright spot is her phone isn't ringing a trillion times a day!

[PaKettle]

Daughter had 341 meeting today for BK7. Trustee says she doesn't pass means test. Says the $400 + per month payment to student loans can't be included to help her pass the means test. WTF! Seems stupid since they aren't dischargable and have to be paid! Trustee even said it wasn't fair but when Congress wrote the new BK laws this little tidbit was included
Very frustrating! Her attorney told her it could be another 2 or 3 months before they know how this is going to pan out. I'm guessing the worst that can happen is they make her change to chapter 13?

That's insane! What a rule!!!

If you have to pay them, then how is that not an allowable expense???!!

I feel your pain. That really really really sucks!

The worst case scenario though is that she will get pushed into a Ch. 13. Meanwhile are there any more legitimate expenses she can come up with? What if her car died and she'd need to buy a new one? What if she forgot some expenses or under-estimated some? (show receipts!)

If she goes to a 13 there's still the chance she can convert it back to a 7.

Good luck to her!

[danaf]

yes - if they force her into a 13, she can always convert to a 7 in the future if her situation changes.

I realized last night that there is a difference in the 'means test' and including student loans in the schedules. (I about freaked when I read your post because I'd be screwed if I couldn't include my student loans in the schedules). It's insane that they don't allow them for computing the means test but do allow them in the schedules. Hopefully this will change if we get a democrat in office.

Meanwhile though, for people who fall under the median but expenses don't qualify them - the second car idea would be a way around it if they can swing it in the pre-planning phase of their bk.