Application To Incur Debt

[NotPerfekt]

Applied for and was approved for a PLUS loan for our kiddo heading off to college. Now I need to file an "Application to Incur Debt". Spoke with our lawyer, cost will be $600-$800 - he's not sure. Anyone know if this seems reasonable? For some reason I was under the impression that this form would be included in the what we paid when we filed the 13. We are about 50% through the plan.

While we're on the topic... anyone know if the courts will approve a PLUS student loan (for parents)? Hate to spend this money if it's an automatic DENIED!

Thanks for any advice you can give.

[despritfreya]

No one can tell you if a court will approve the motion. If you can produce a budget that shows you can afford the loan payment, in addition to your Plan payment, you should be ok but. . .

As to cost, the flat fee you paid to your attny most likely did not include drafting the motion, filing it, copying and mailing it to all creditors, attending a hearing (if required), dealing with any objections to the motion (if any) and the submission of an order approving the motion (if approved). A motion to incur debt is not "ordinary" and charging extra for the extra work is reasonable. The estimated cost sounds about right depending upon the normal hourly rate of the attny and his/her office staff.

Des.

[LadyInTheRed]

For some reason I was under the impression that this form would be included in the what we paid when we filed the 13.

As you can see by Des' description of the process, an Application to Incur debt is not as easy as filling out a form. Even if it were a form, that wouldn't necessarily make it simple.

[159515951]

Your attorney will know more about how your Trustee will handle this better than anyone here, but generally speaking, if the monthly payment on the debt you're proposing to incur is significant, the Trustee might want to know why you have disposable income sitting around that isn't being paid into the plan.

[Pandora]

The way this reads, it sounds like the OP did so without attorney approval; if thats the case, many people applying for loans prior to getting approval first and foremost from attorney & Trustee, and then what? With FAFSA they tell you what your family "should" pay, that gives you a ballpark figure, but its by no means a "must pay" for parents. You're not on the hook, its a simply notice, not a signed, sealed and delivered loan agreement. ALWAYS ask your attorney before applying for ANY type of loan when in a Ch. 13 plan, period.

If its not the case, as it reads, and you obtained approval beforehand, then my apologies....