20/20 Hindsight and Misrepresented Income

[chrisdfw]

...
Also have about $15k in govt student loans that I wouldn't even DREAM of trying to walk away from. Those are gonna stick.

Yes, they can stick through bankruptcy... however, there is loan cancellation for government loans when a person who took out the loans becomes disabled.

The requirements are less than discharging loans in bankruptcy, and if you are recieving disability payments are will "indefinitely" then you might qualify, it is not
based on any kind of adversarial procedure, its paperwork, probably similar to the process for applying for disability.

Be aware that they have a three year waiting period after approving the application, so if you get better (lets hope!) within three years they reinstate the loan, but I don't
believe they charge interest on the period in which it was conditionally discharged.

[keepsmiling]

Occasionally an old thread is worth a bump.

[DYLAN150]

I found this statement listed below interesting: Stated by an Las Vegas bankruptcy attorney:

In nearly 30 years of handling bankruptcy cases, I have yet to see one case where an adversary action was filed due to overstating income. I don't even think the creditors retain this information for more than a year either.

[GoingDown]

Sorry to bump an old thread, but I just wanted to leave an update for those who might encounter the same issues somewhere down the line.

The aftermath:

NO problems with creditors wanting to file an AP. I was awfully worried about this at first. Well, actually I was worried about it until the final discharge finally came through. Nothing. Zilch. Zip. Nada. I thought maybe my creditors might pursue misrepresented income, or periods of hyper-spending, or possibly some of the big donations I made to charities a few months before filing. No. If this is you, take a deep breath (I didn't, and I wish I did) and know that sometimes the things that freak us out are not things that credit card companies will pursue.

NO problems with SSDI backpay. It sat in the bank with a perfect paper-trail and was never comingled. The full amount was exempted and no one ever said a word about it. I know this can vary by state, so if this is of interest to you, just know your mileage may vary.

I love this quote!

I think that so many people on here worry too much and are afraid of things which in the end turn out just fine.

I know one of my original creditors, Wells Fargo, used to call me and threw around the credit card fraud charge numerous times. I'll admit that at the time, I was very scared about it. It was one of the reasons I put off filing BK-- I wanted to put more time in between my last credit card charges and my BK filing date. I put it off so long that I ended up never filing BK at all.

But back to my point-- I worried about something that never happened. Oh God, if I had those moments back! But you can't get them back. So, don't waste a minute of your precious time worrying about this sort of thing.

They love to throw around threats, but in the end, they really just do a lot of bluffing, and hope that people will knuckle under and do what they want them to do.

Keep that in mind for future reference.

[debee]

I'm glad this worked out for you too, Peeps.

[IamOld]

Peeps MUCH congratulations!!!!! Just read the whole thread - so glad all turned out well!!!! and thank you sharing!!!!!

BEST WISHES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!

Sorry to bump an old thread, but I just wanted to leave an update for those who might encounter the same issues somewhere down the line.

The aftermath:

NO problems with creditors wanting to file an AP. I was awfully worried about this at first. Well, actually I was worried about it until the final discharge finally came through. Nothing. Zilch. Zip. Nada. I thought maybe my creditors might pursue misrepresented income, or periods of hyper-spending, or possibly some of the big donations I made to charities a few months before filing. No. If this is you, take a deep breath (I didn't, and I wish I did) and know that sometimes the things that freak us out are not things that credit card companies will pursue.

NO problems with SSDI backpay. It sat in the bank with a perfect paper-trail and was never comingled. The full amount was exempted and no one ever said a word about it. I know this can vary by state, so if this is of interest to you, just know your mileage may vary.

[Peeps]

Sorry to bump an old thread, but I just wanted to leave an update for those who might encounter the same issues somewhere down the line.

The aftermath:

NO problems with creditors wanting to file an AP. I was awfully worried about this at first. Well, actually I was worried about it until the final discharge finally came through. Nothing. Zilch. Zip. Nada. I thought maybe my creditors might pursue misrepresented income, or periods of hyper-spending, or possibly some of the big donations I made to charities a few months before filing. No. If this is you, take a deep breath (I didn't, and I wish I did) and know that sometimes the things that freak us out are not things that credit card companies will pursue.

NO problems with SSDI backpay. It sat in the bank with a perfect paper-trail and was never comingled. The full amount was exempted and no one ever said a word about it. I know this can vary by state, so if this is of interest to you, just know your mileage may vary.

[debee]

Hi again, Peeps. I've been doing some more reading on the topic of social security income and whether it could derail a chapter 7 filing and I just found a link to a really special place with great info: bkforum! Too funny. Wish I had thought of searching the forum earlier. This is a good thread with some great advice from resident expert, justbroke.

http://www.bkforum.com/showthread.php?47283-ss-income-not-counted

[debee]

Makes sense, Peeps. You should be able to find a lawyer who will do a free consult over the phone. And from there, you can try to find one who will meet with you at your home.

As for the schedule I/J thing and your ssdi, well there's a wage exemption in every state and chapter 7 filers still have to list the income (exempt or otherwise) on their schedule I.

There was a second case I saw in the 8th where the BAP court ruled that ssi could not be included in a ch13 repayment plan. I mention that because in a previous post I brought up a Florida case where it was counted.

I hope you call a lawyer soon and come back and post because I'm really interested in how this will go for you. I wish you the best of luck and lawyering.

[tobee43]

Thanks for all the ideas, Debee & Tobee both! Thanks to everyone who has chimed in, for that matter!


The big Q in my mind was about the possibility of creditors screaming fraud. I was probably worrying too much about that. The SSDI thing is more in the hands of people who get paid to understand this stuff. I'll keep the forum posted, since sooner or later someone else is bound to be in the same position (if not already) with the same questions.


On the "why even file?" Well... good question. I'm still trying to figure out what would be best. And getting ready to talk with attorneys but that comes with its own challenges because of the agoraphobia. Yeah, I know. Train wreck. my $63k debt is all in credit cards. I have a right-side-up mortgage and am comfortable in my home (prefer not to leave). Also have about $15k in govt student loans that I wouldn't even DREAM of trying to walk away from. Those are gonna stick. So really it's just about the credit cards. I know I'm really not garnishable at this point, but I still have hope that someday I'll be able to rejoin the normal world, work again, be healthy and be happy. It has happened for others and I'm hoping I can get there too. Not sure I want a bunch of credit card ghosts following me around when/if the day comes!

well, the best of luck to you, with whatever you decide peeps..

i'm just understanding that if you, in fact, have a home and have that amount of cc debt, as long as you are not in danger of defaulting on your debt, then the cc's will not put liens or whatever on your house...i think with the fact, that the house does have equity, that would be something to examine very carefully with an atty...just to make certain. however, i can see how one would want to be extremely mindful, as who wants those cc's going after your house! maybe even a 13 may suit your needs...settling on pennies on the dollar... the concern i have about that, is what debee posted about the example case of the people in the 13 in florida and the trustee wanted to include it as income. but would that even matter?

good luck and make certain you keep us posted as to how your doing!

[Peeps]

Thanks for all the ideas, Debee & Tobee both! Thanks to everyone who has chimed in, for that matter!


The big Q in my mind was about the possibility of creditors screaming fraud. I was probably worrying too much about that. The SSDI thing is more in the hands of people who get paid to understand this stuff. I'll keep the forum posted, since sooner or later someone else is bound to be in the same position (if not already) with the same questions.


On the "why even file?" Well... good question. I'm still trying to figure out what would be best. And getting ready to talk with attorneys but that comes with its own challenges because of the agoraphobia. Yeah, I know. Train wreck. my $63k debt is all in credit cards. I have a right-side-up mortgage and am comfortable in my home (prefer not to leave). Also have about $15k in govt student loans that I wouldn't even DREAM of trying to walk away from. Those are gonna stick. So really it's just about the credit cards. I know I'm really not garnishable at this point, but I still have hope that someday I'll be able to rejoin the normal world, work again, be healthy and be happy. It has happened for others and I'm hoping I can get there too. Not sure I want a bunch of credit card ghosts following me around when/if the day comes!

[debee]

The only assets I have seem to fit into the allowable exemptions for my state. And my only income right now is from SSDI.

According to her first post, OP's assets are exempt. Anyway, there may be reasons for filing that I don't know. It's just something to throw at Peeps for her consideration.

But on second thought, exempt asset doesn't necessarily mean no asset. I think I've given all I had to give. lol. Time for me to find a new thread!

[tobee43]

One thing I wonder is if the OP even needs to file bk. If her cash is exempt and her income is exempt and she has no assets, is there a benefit to filing? Can't she just get a new phone number and move on with her life?

well, thus far, and i'm always missing something...but peeps has not disclosed debt...it may be debt or a foreclosure or job lost, or even this present illness as the primary factor withstanding the determination whether or not a bk is actually needed. i would think it would encompass more than what we may see on this thread?

and if not...i would agree...runaway, change your number and lock your doors!!

[debee]

One thing I wonder is if the OP even needs to file bk. If her cash is exempt and her income is exempt and she has no assets, is there a benefit to filing? Can't she just get a new phone number and move on with her life?

[tobee43]

Well, in my post to the OP I said I didn't know because I don't. I read a few articles looking for info and kept running into the "doesn't count on means test, might count on schedules I/J" comment.

As for the ch13 case, it's just interesting (to me at least) that the trustee would expect the debtor to be paying the creditors with exempt income. Not the OP's state, so I didn't mention it for her sake. That tidbit was for you.

thanks!! also learning from tidbits...even when they are really scary ones!! and, i really appreciate it...i tell you tho, and i know there have been many a successful 13's...but that possibility certainly scared the heck our of us. so i appreciated seeing the way it was handled in that one district. it simply shows perfectly clear the differences from district to district even in same state.

i think that's something we should all be aware of, actually.