100K limit? myth or real

[sunshine mary]

The UST asked me about some property I own and the value of it compared to what I owe and some questions on my pay stub like 401 withholding and insurance. That's all I remember.

[halloweendmb1]

If the UST looks at your case more clsoely what do they typically ask for?

[Flamingo]

Thanks, makes me feel better. We stopped using all of our credit last year when things were obviously headed downhill. I didnt buy anything big but I have bought computers and such in the past (over a year ago). I guess I was worried because when I filled out all my forms our debt came to slightly over 98k (unsecured), and I was thinking OMG! I never realized we even had that much debt until I put it all out on paper. Before it was just 20 bucks a month to this card and 15 bucks a month to that card. Money flies when ur having fun I guess.

The two sentences I highlighted in your posting above is your flashing neon sign or "warning shot" that you need to take control of your finances or, as you have found out, they control you. As you state, it's a shock when you actually put it all on paper and realized how out of control it actually is.

[Priceless ProSe]

Thanks, makes me feel better. We stopped using all of our credit last year when things were obviously headed downhill. I didnt buy anything big but I have bought computers and such in the past (over a year ago). I guess I was worried because when I filled out all my forms our debt came to slightly over 98k (unsecured), and I was thinking OMG! I never realized we even had that much debt until I put it all out on paper. Before it was just 20 bucks a month to this card and 15 bucks a month to that card. Money flies when ur having fun I guess.

[Flamingo]

A very large debtload will almost surely be scrutinized due to the possibility of fraud prior to filing. All of us have seen postings by folks wanting to run out and purchase this and that hoping they can charge it all and then discharge it in BK. I have seen many postings over the years on various forums about people knowing they are going to file and charge big vacations on a credit card and then do not pay it. Things like that are what are looked for when there is a big run up of debt say in the year or so prior to filing. If one is honest as to everything when filing, there is nothing to worry about. Fraud is almost always caught anymore after the passage of the New BK Law in 2005.

[lrprn]

My question is, if this 100k (or whatever it is) limit exists, is it for total liabilities (which would include almost anyone with a house), or only for unsecured debt? Do they include student loans in such an equation?

The $100K limit is just a loose guideline, not a rule and is certainly not a part of the bk law.

The $100K is a total of your non-secured debt, and yes, since student loans are considered non-secured debt when you file, those loan amounts are included.

Don't get freaked out here. The US Trustee just looks these cases with higher-than-normal non-secured debt totals over. If there's nothing in your filing that suggests fraud or questionable transfer or hiding of assets, nothing happens. Worry only if you file actually hiding something.

[Priceless ProSe]

I understand that student loans cannot be discharged. My question is, if this 100k (or whatever it is) limit exists, is it for total liabilities (which would include almost anyone with a house), or only for unsecured debt? Do they include student loans in such an equation?

[laurannm]

I've had lawyers during our consults tell me that 100k will bring the attention of the UST, but primarily they are looking to make sure you are not trying to hide assets or commit any kind of fraud.

[sunshine mary]

My attorney told us the UST was at our 341 because we were "borderline" a CH7 over the median she said nothing about the amount of debt we had but I have read that here too.

And to encourage you, even if they are there and you've been honest you probably won't have any trouble. We didn't and actually liked the UST more than the local one !!

[JRScott]

You can't discharge student loans in a bankruptcy.

However yes it is true that there is a certain threshold that brings the UST attention and probably a 100k or so will do it. This does not mean that you will not get a successful discharge just means he'll look over the paperwork a bit more closely.

[Priceless ProSe]

Well I recently filed chap 7 (pro se) and I have been reading alot on this forum about a "100k limit". The jist of it seems to be that once your debt reaches 100k the US trustee will scrutinize your case more. Is there any truth to this? Is this only unsecured debt?

For my wife and I we have approximately 50k in student loans (hers was expensive from a private school), 18k for a car (13k secured by the value of the car), and 43k in various other unsecured debt obtained over the last 8 years (27k of which were hers before we were married). This makes my total liabilities 111k, 98k of which is unsecured. Do you think this will draw alot of scrutiny?, or will the UST see that we have mostly just student loans and a car? Its not that im afraid of being scrutinized, we stopped using credit in 2007 and just recently filed, I just dont have the time to be tracking down all sorts of odd documentation for the UST. Plus im hoping (as we all do) that my case will be as quick and painless as possible (hehe).

I have not seen any such limit in BK code, but I would appreciate if anyone could shed some light on this.