Tomorrow is the big day against the UST

[TeacherMomma]

Apparantly, in talking more with the UST - they are thinking me/or the atty I hire will want to attempt to get the SLs to be an "impaired" class. So that then the judge can "cram" the plan on the rest of the creditors. I guess as long as an impaired class votes yes on my plan, then the judge can do that (force the plan on the rest). And they are thinking that asking the SLs to extend my repayment term for longer than the 20-30 years, even if by 5 years, which then makes them impaired since they are not being paid according to the promissory note. As it stands now they are impaired cause I pay them when I can....so to them it is either here not there that they stretch it out, they are gonna get more interest that way anyways.

Just a little tid bit of info for ya.

I meet with an atty Monday after work.

[justbroke]

But.....the student loans aren't dischargeable so are they really considered a 'creditor' because they have no liability, no risk of the debt being discharged.

In almost any Court, they don't consider the student loan creditor, who is also a general unsecured creditor, a special class. Since they are not a special class... they must be considered in the same pool. (At least that's my read). That means, they are on equal footing with the other unsecured creditors.

I would just say that just because something is non-dischargeable doesn't mean that they a.) can't be on the plan, or b.) are not a creditor. Case in point, look at the IRS taxes. That is non-dischargeable debt, and included in the Plan. The Chapter 13 (and Chapter 11) plan only provides that "priority" unsecured debt must be paid in full during the plan. IRS tax debt usually has a priority unsecured component and a general unsecured component (which is not entitled to priority). So, just saying because something is non-dischargeable, transforms the creditor into something other than a creditor.

So, you can put your student loans in your Plan of Reorganization so that they don't accumulate.

[biotechsolution]

But.....the student loans aren't dischargeable so are they really considered a 'creditor' because they have no liability, no risk of the debt being discharged.

Wouldn't a creditor with debt at risk of being discharged have a stronger position in approving the payment plan than a creditor where in reality the bankrtupcy filing has no effect on the debt that your owe them?

[Chowder]

**raising hand**
Because the creditor -student loans in this case- with the largest amount of debt gets to sign off on the repayment plan, while the lesser creditors have not so much of a say?

[biotechsolution]

I'm trying to understand one point, hopefully you can clear this up for me JustBroke.

If the student loans can't be included in payments for Chapter 7 and are expected to be deferred in any BK proceeding, why would they be able to be paid in a plan for a Chapter 11?

Wouldn't all the other creditors argue that since the student loans can be deferrend during a BK and aren't dischargeabe they shouldn't be paid.

Otherwise the creditors who's debt can be discharged in a BK are at a disadvantage. Especially if there is a considerable payment going to the student loans.

[TeacherMomma]

Thanks

[2manybills]

TeacherMomma: I guess on some level you are getting your 7 in a weird way.

I'm glad you gave it the "good fight" and glad that I was able to do the little I did.

You know where to find me when it's time for forms or whatever!

[TeacherMomma]

As per the UST my student loans will be included in the 11 - there is NO way they can not be A) because they are my largest creditor and B) the interest would be RIDICULOUS if deferred, so that isn't going to happen. What we are apparantly looking at is a plan that is just my student loans and they will be an impaired class therefore we can have the judge "cram down" a plan on the other creditors who are likely to vote no on my plan. So yeah, a backdoor 7 is what I am getting, but with fees. Yahoo. Or a huge portion going to the student loans and a very small portion going to the creditors.

Now if I were to stay in an 11 long enough to pay down the debt and get it under the 13 limits I can convert, but why would I do that if my plan was doing what I needed it to and paying my student loans only??? I might as well do the 11, get it confirmed and get out of it so the quarterly fees stop. The fees would be the only reason to convert. Then what I have is a contract between me and creditors and my case is essentially closed (that is what the UST said a while ago, and what the judge said today).

We will prob be leaving our house anyhow - so they won't be part of it. I don't know for sure on that yet, but we have to figure that out quick. We have a place to rent if that is the case. I an unsure if we could take the full amount of the rent as an expense, or only the standard in an 11??? Is it like the means test on a 7 where if you are a renter you only get the state standard? If so, then that makes our disposable income look like more again.....

Speaking of the atty for liz and albacore - I met with him and he is not equipped for my case, he said so himself. He said he would do it for a really hefty fee, but I don't need to pay someone to LEARN an 11. I could do that myself. If I can afford this gal I met today, then I might use her....I really don't know.

I got some names and met one of them today at my hearing. The UST gave me names, and one of them was there so I talked to her. Just need to get the $ she would charge us. But other attys SWARMED us afterwards....I mean - were WAITING in line to give us their card. I said "if any of you are standing here and are going to charge me 20K for this - save yourself the time and beat it". LOL

I had to try to fight it, I contemplated just agreeing to the 11 but I thought I would spend 5 years wondering if I should have fought. Now I know.

[albacore44]

you think they would give you a break, since obviously the student loans were to better yourself for service to your country. i have a lot of respect for teachers, it's kind of a thankless job, particularly in California.

[justbroke]

Hey TeacherMomma, sorry to hear! Are we going to start our Chapter 11 thread now? You might be the first Chapter 11 pro se filer here. I almost was a Chapter 11.

[2manybills]

There are many legal issues regarding student loans and whether they are paid in the plan or outside of the plan. It all depends on what district, etc. There are legal opinions both on Westlaw and Lexis Nexis in both directions.

If you are able TeacherMomma, I would see a good attorney that specializes in this area, I know liz417 and albacore both have a good attorney in your area in the IE. You might PM them. My guy is in L.A.

[backtoschool]

That's a good question backtoschool, but I'm wondering do the student loans just going into forebearance for the length of the plan and accumulate interest and charges. So in the end. . .

Good question, 2manybills, but from what I read on chap 11 that won't happen because the unsecured creditors vote on the plan in a chapter 11, and the OP's top unsecured creditors are all student loans. So student loans will get paid in a chapter 11 plan. (but no one else will due to the huge size of the student loans in the OP's case).

[2manybills]

That's a good question backtoschool, but I'm wondering do the student loans just going into forebearance for the length of the plan and accumulate interest and charges. So in the end. . .

[backtoschool]

Well, that was lame.
We have 10 days to convert to an 11 or dismiss. The goal of the 11 is to pay down some of the debt and convert to a 13.
No oral arguments-everything had to be submitted in the documents from both sides (it was). UST was nice, we talked before and he let us know what he was thinking about some stuff, and said if she rules on her tentative and we do convert that he has some names of attys for me (gee-thanks). I got a little upset with him prior cause he was talking to me as if it had been decided, and he had asked "well do you want to convert because I will do the conversion order for you if that what she rules, I don't want to put more stress on you" and I flipped a little bit and I said "NO I want her to do what I asked for in my opposition-so why don't you relax till we go before her".
So much for that.
Sigh.

So sorry you didn't get a real chance for the judge to truly listen to your arguments.

From what I have read, it seems to me that you would end up in a 0% chapter 11, with all the money going to your loans and your house. This is pretty much what would have been left undischarged in a chapter 7. So the difference is in the paperwork (huge. ) and the initial fees.

In the long run (even the mid-term), you will still be discharged from all of your other unsecured debt. The key here is how quickly you can "close" the chapter 11 after confirmation, and avoid the quarterly fees.

So, although I am sorry you didn't get the chapter 7, I am feeling positive that you will get a 0% chapter 11 and will get your other debt discharged.

[2manybills]

This may mean consulting with an attorney, dismissing and filing again in six months.

I was hoping that the Judge would give you a break since you were pro se. I think (IMO) that because the monthly student loan payments are so high, it raised eyebrows for sure! It shouldn't make a difference whether they were $2k a month or $300 a month.