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Income Based Repayment (IBR) / Student Loans / Chpt 7 / PRO SE

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    #16
    Originally posted by backtoschool View Post
    The fact that your private loans have not yet agreed to settle with you, will not be the determining factor in your motion to discharge your loans. The deciding factor will be whether you, in your entire lifetime, will ever be able to work again, and whether you could come up with some sort of minimum payment to the loans over the course of your lifetime. It is almost impossible to meet both standards unless you are in a coma on permanent life support, etc.....
    OK, thanks for the clarification. That's depressing! ;-(

    Comment

      #17
      Originally posted by blackdog View Post
      OK, thanks for the clarification. That's depressing! ;-(
      I know. And its not fair. But I didn't want you to get your hopes up too much that you would win this AP. Since you are doing it pro-se, it still is worthwhile to try, but it is definitely a long shot.
      You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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        #18
        Hi blackdog,

        Do I have this right: you went straight to DOE and got your loans discharged on a medical disability.
        When was this? You might have a ray of hope in the dark world of student loans. Are you sure it is an actual discharge and not just a medical deferrement?

        I like to paint the darkest picture of student loans in BK court so folks don't go in unprepared.
        If you are going to fight it, you need to be well armed.

        The pro-se info is good news, thanks wipetheslate! Getting expert witness for the medical is a given, they can testify by phone if needed. They need to explain that your disability is permanent and why you can't work. (not just saying you can't work, but why)

        Get the poverty level for your neighborhood, be ready to show that your (disabilty income + food stamps + any other benefits) minus (govt. assisted housing - out of pocket medical - govt assisted utilities - public transportation expense) = less than the fed poverty line by about 50% (half of the poverty level) Document all this. Find out the interest-only payment on your student loans. If you can show that this payment will drop you below half the poverty line you should be in good shape. If not, go in with the worst financial picture you can document.

        Introduce the fact that your private lenders do not offer IBR or deferrement, it cuts off an argument the courts have used before.

        And lastly, thank Congress for adding private lenders in with federal backed student loans. Glad they are looking out for the individual and not large financial corporations....oh wait....sorry about that....

        And thank whoever got rid of the "statute of limitations" on student loans, used to be old loans got discharged.

        Good luck to anyone fighting for student loan discharge!

        Tom in Colo
        Ch7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010

        Comment

          #19
          Here is one site, but it doesn't cite it's source:
          Will bankruptcy remove your student loans? - Answers
          http://wiki.answers.com/Q/Will_bankruptcy_remove_your_student_loans
          I worked for Direct Loans so I know a little about these things. You do have a few options. If your income is very low you could change pay plans to the "Income Contingency Plan. This plan is where you make payment according to your income. The payment can be as low as nothing a month. Usually they have payments of $12 a month. After 26 years the federal Government will forgive the loan and you will not have to pay it. Other options are deferments. You can stop payments for several reasons. Call Direct Loans for more information. A deferment stops payment and the Gov. will pick up the interest on the subsidized portion of your loan. You can get a forbearance, which will stop payment on your loan, but you will still accumulate interest on all parts of the loan. I live in WA State. I did a bankruptcy 7 years ago, but was unable to include my student loans. I was told by my attorney that I could have included them if I had paid on them consistently for 5 years prior to the bankruptcy. I had only paid on them for 2 years straight at any one time... between extensions & forbearance's. Like many others, I shall be paying on these damn loans with my Social Security Checks... never mind choosing between eating & medication. ;) The only way to discharge a student loan through bankruptcy would be to demonstrate a hardship. I don't mean 'hardship' as in, gee its hard for me to pay. I mean a hardship like I'm completely disabled and cannot work. Second way out is to emigrate. Student loans are one of those loans that don't go away. If you file bankruptcy,student loans are very much not exempt. You still have to pay up. The Bankruptcy Code used to say that student loans could be discharged if they were more than 7 years old AND some other criteria were met. In the past few years, the Code was changed and now the Bankruptcy Code says (in 11 USC 523): "(a) A discharge ... does not discharge an individual debtor from any debt- (8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents;" This means that you can only discharge student loans in bankruptcy if you can show that repayment causes an undue hardship on you or your dependents, and like someone said in a posting above, this does NOT simply mean "Gee these things are hard to pay." I read a case once where the debtor became paralyzed from the waist down, and the Bankruptcy Court did not allow him to discharge all of his student loans since he could still work a desk job. I think the posting above by the person who used to work for Direct Loans has some really good ideas to deal with student loans, but please keep in mind that nothing I say in this posting or in any other posting constitues legal advice, it is simply my understanding of the facts. Please read! If you and your wife owe 80grand you probably don't owe all of that to federal (staford) loans. federal loans do not go away but if you went to a private school that is much more expensive than federal you probably got extra "gap" loans from bank. those loans get to go! I am about to drop about 50g of 120g. that's mostly credit cards and student gap loans. I have declared Chap. 7 Bankruptcy in 2000. It was discharged, and my student loans were included. However, everyone says I still owe the money. So the question is, does the Judge's word not count? If he accepted the bankruptcy lock, stock, and barrell, it doesn't matter, the student loans still count? I've been paying them since the mid 80's.... many forebearances. If the judges word does count, how do I go about enforcing it? Listing Student loans on the bankruptcy petition does not mean that they are discharged. In order to receive a discharge you must ask the court specifically to discharge the student loans. This is done through an adversary proceeding with notice to the student loan holder. It is much like holding a civil trial during the bankruptcy proceeding. The discharge you received said that "all dischargeable debts" were discharged. This does not include student loans, backed by a government agency, because they are not dischargeable by statute, section 523(c)8 of the Code, unless certain criteria are met. These criteria need to be determine by the court through a "trial." Due to bankruptcy reforms in 1998 and 2005, it's almost impossible for the average person to discharge federal or private student loans through bankruptcy. Although your student loan can't be discharged in bankruptcy, a bankruptcy court may be able to ease an overwhelming debt burden. Some courts may discharge a portion of your student loans, but this is rare and varies by court. In most cases, the judge will incorporate your student loans into your debt repayment plan under Chapter 13 bankruptcy. Any balance remaining after the payment plan ends will still be due, but your other debts should be paid off by then A bankruptcy will not remove student loans but will include the student loans in the bankruptcy. The debt will be gone, but any credit report listing will continue to be listed as included in bankruptcy.


          I am currently working (reduced hours), so I don't presently qualify for disability. I went through the application process and the SSA rep I spoke with would have approved me over the phone for disability if I wanted it.

          I have had one of my doctors explicitly tell me--without prompting or asking from me--to "get my affairs in order." I'm kind of opposite the situation of someone that's disabled but may be un-disabled in the future. I'm currently working, but statistically, I don't have long [although I intend to beat the odds].
          Last edited by wipetheslate; 10-02-2010, 12:42 PM.
          Filed Ch 7 pro se Oct 2010 . Filed student loan AP pro se Feb 2011 . Discharged Feb 2011 . AP trial 1/10/2012 . $28K in student loans dismissed Jan 2012 . ECMC appealed. Appeal hearing 7/2012. Original judgment upheld 9/2012.

          Comment

            #20
            Originally posted by backtoschool View Post
            Disability is not enough to have your loans discharged. You will have to prove that there is a certainty that you would never be able to work again. This is a stronger standard than what defines disability in general. If you can pay even ten dollars a month on the IBR plan, then you have not met the standard for dismissing the loans.
            Some courts look at the "certainty of hopelessness." And what constitutes "hardship" under the so-called Brunner test isn't explicitly defined. So there is wiggle room, and there are differences among circuits.
            Filed Ch 7 pro se Oct 2010 . Filed student loan AP pro se Feb 2011 . Discharged Feb 2011 . AP trial 1/10/2012 . $28K in student loans dismissed Jan 2012 . ECMC appealed. Appeal hearing 7/2012. Original judgment upheld 9/2012.

            Comment

              #21
              Hi all,

              the problem with vague language is it leaves it up to the court to interpret it. I wish the wiggle room around here wiggled toward the debtor, but unfortunately the court wiggles right up to the lender....

              And what constitutes "hardship" under the so-called Brunner test isn't explicitly defined. So there is wiggle room, and there are differences among circuits.

              All the same, prepared for the worst is ready for the best,

              Tom in Colo
              Ch7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010

              Comment

                #22
                Originally posted by wipetheslate View Post
                Some courts look at the "certainty of hopelessness." And what constitutes "hardship" under the so-called Brunner test isn't explicitly defined. So there is wiggle room, and there are differences among circuits.
                There is almost no wiggle room, if you look at precedence. Very few cases are won, and hardship under the Brunner test usually means permanent inability to earn money.
                You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

                Comment

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