Student Loans and Means Test

[sisterfunkhaus]

Can you put student loan payments in the means test since it is non-dischargable, non-negotiable debt or am I SOL on that one. I know in 13 it isn't considered a priority debt.

[Faith]

I was told no by my attorney. We've got pretty significant student loans and given that they are non-dischargeable, they will remain part of our budget whether discharged in Chapter 7 or going through Chapter 13. Nonetheless, they were not counted in our means test numbers.

[anonymuse]

They should be put on Schedule F for unsecured nonpriority claims.

I'm not sure how student loans will be handled in your district--check with your lawyer.

Even if you are in a Ch 13, you pay debts in a certain order based on whether they are secured/unsecured and priority/non-priority. I've seen posts where student loans are ranked higher than unsecured credit cards in the scheme of things. You are going to have to pay your student loans since they are non-dischargeable. I don't know if a unsecured creditor can make a case in a Ch 13 that they should get paid back before a student loan. If they aren't able to argue that, and the only disposable income you have would cover the minimum payment on a student loan, I would think it should be included on the means test.

There's a minimum amount you can pay when you are in forebearance just paying off the interest--maybe that could be included.

Ask your lawyer and let us know what he says!

[anonymuse]

Found an interesting answer that says SLs can be included:

http://credit.about.com/od/bankruptcy/a/bankruptcymeans.htm

Beyond the IRS allowances, the bankruptcy law allows other types of expenses to be calculated when determining a debtor's adjusted income. Monthly expenses for purposes of the means test may include:

• reasonable and necessary spending to care for an elderly, chronically ill, or disabled member of the debtor's immediate family,
• reasonably necessary expenditures for health insurance, disability insurance, and health savings accounts,
• actual expenses for the education of a dependent child (under 18), up to $1,500 per child per year,
• home energy costs in excess of the IRS housing and utility standards, with justification,
• average monthly payments on secured debts (most commonly home mortgages and car loans),
• average monthly payments on priority claims (i.e., child support, student loans, alimony, etc.).

[anonymuse]

So, we've come up with an interesting dilemma--student loans are considered non-priority by BK courts, but priority by the IRS....hmm....

I'll see if I can get Interlaw to chime in here.

[Faith]

Found an interesting answer that says SLs can be included:

http://www.abiworld.org/consumerlive...erprogram.html

Has anyone here successfully included student loans in their means test calculations?

[jbr12]

Two of the three laywers I talked to included my student loans in the means test. They were included even though they are currently on deferrment. The last lawyer told me, while you're not paying them now, they will be a part of your budget in the future