ch13 student loans confused??

[CBC123]

Hello ALL,
I have been reading this board for about a week and trully enjoy this board because of my wife and I being in ch13 and needed answers (which we can hardly get from our attorneys or his paralegal.


My question is:


Since student loans are not dischargable should they be included in the ch13?
If they are not dischargable then why should we include it in the plan and keep it in a forebearance or deferment status?

Wife and I filed in 11/06 first payment in 12/06 and my student loans are in there. Does this mean that when we finish our CH13 plan that we no longer would owe on the student loans?




Thanks for advice,
CBC123

[Yankeegirl]

I filed for Chapter 7 in March and the US Trustee is trying to move us to Chapter 13. Therefore, I don't know all the ins and outs of Chapter 13.

From what I do understand, the amount you pay into a Chapter 13 is based upon all extra income at the end of the month as determined by your schedules. If you don't include the student loan (which I'm not sure is an option) then your schedules will indicate that you have more available income than is accurate since you will be paying your student loan outside the plan. Make sense?

While the student loan is not dischargeable, it's not a priority debt. Therefore it gets lumped in with all the other unsecured debts. A portion of your monthly Chapter 13 payment goes to it just like the other debts. If you are not paying the full monthly amount, then the interest will accrue. When your payment plan is complete, you will still owe the remaining student loan balance PLUS all the accrued interest. In most cases, you will come out of bankruptcy owing more on your student loan than you did before you started!

We are actually fighting the US Trustee on this particular issue (along with 2 others) and will be taking it to a Judge to decide.

Hope this information helps!

[CBC123]

That clears it up and does make sense.

I have another question:

My car note is included in the BK13 and was current up till filed for BK. My mortgage was past due for about 3 months. My payments are 250.00 a month to trustee and payming mortgage on my own. My plan payment will increase to 750.00 come 12/07. What is happening with the money that I am paying now and can they do this (increase payment to 750.00)?

Is it true that the arearage of the mortgage that is in the plan has to be paid out within 36 months?

[lrprn]

CBC, it will help us help you better if you can give us a little more information. What state are you in? Is your plan for 36 months or for 60 months? How did your lawyer explain your payment increase to you?

[wooisme]

A note on the student loan business............I have a student loan and am in a chapter 13....my lawyer gave me the option of either putting it in the plan OR making the payments myself outside of the plan.........since mine was a small amount each month I opted to leave it out of the plan...after my student loan is paid, the extra money will be added in to my plan payment....

the only thing i have to say is that with my trustee, anything outside of the plan, ie: student loan, mortgages, homeowners association dues, all had to be current BEFORE it was confirmed. now not all districts do this but mine does and i absolutely had to prove it was paid on time and current before they confirmed. so if you leave your student loan out of it, you cannot deferr the balance for 6 months and i have to tell you that anything you pay, or pay stubs, IF they ask for it you have to produce it. for the entire time you are on the plan. they more than likely won't but they have every right to ask for information while you are in this plan.

[CBC123]

CBC, it will help us help you better if you can give us a little more information.

What state are you in? Arizona

Is your plan for 36 months or for 60 months? 60

How did your lawyer explain your payment increase to you?

What happened is that my spouse and I filed in 8/06 and started paying last year 12/06 because was about 3 months behind in mortgage with Countrywide. They sent us a foreclusore notice, so to save the home, we file CH13. This and two 500.00 credit cards were behind and our car was current along with student loans about 30k. These were the only thing we had and included in the BK13. My wife was also pregnant when we got the foreclosure notice and we were put on a plan for 36 months for 1100.00 a month orginally. Wife gave birth before our first payment and we notified our attorney of this and he reajusted the 1100.00 a month to 250.00 till 12/07 to where it will be 750.00. We have an ARM and it adjusted this month and also will every 6 months (I pray that interest rate will go down by then). We tried contacting our attorney but as usually got his paralegal in which wife and I dont feel confident with her. Told her about the ARM and she stated that it is what it is and we also contacted Countrywide and sought to see if they could modify the loan or help because payments were going up by about 345.00. They said cant do anything because of the BK13 (is this true?) Anyway just (by the grace of God) will make continue to make ontime payments for a year in which it should be 12/07 and try and refi thru FHA or someone so we can get out of this. This is our goal for this and to stay out of financial trouble and BK.