Question About Student Loan and Income Tax

[HopefulInOhio]

Another question -

In January my student loan can come thru for about $3000. Okay...I'm going thru a divorce and that will help pay him off for the divorce, plus a big chunk on my bankruptcy fees which are $1200. Also, it's going towards moving expenses, for my daughter and I need to get out of this home. It's the marital home and after seeing the 2 of us almost fall apart over not just the divorce but the depression of being here, plus repairs...we are gonna move to an apartment where all maintenance is taken care of. No more house insurance, taxes...REPAIRS.....between rent/deposit, utility deposits...that money is gonna come in so handy it won't be funny.

Also, not sure what I'll get back in taxes, but I only make $350-$400 a week. Is it possible to keep ANY of that because basically - In January, my daughter and I can finally move our lives ahead since all this mess started. I can't go into it broke. The bankruptcy should get filed in January/February...

What is the process of how they determine how much money you can keep? My attorney told me I can keep my car and at the time of bankruptcy filing, we will see how much is in my account and go from there. I've been so busy with the divorce, I just haven't gotten knee deep in the bankruptcy yet.

And....I keep seeing where some folks talk about the trustee having money garnished from bank accounts. What instance do they do this?

Now, other than CC statements, bank statements, pay stubs, tax forms...is there anything I should be collecting other than that? I know I'll have to have all my moving expenses receipts.....

I have several friends that have used my attorney for bankruptcy...they turn all paperwork into him, he files, they go to the 341.....then it's over. I've had one person even say she had no idea it actually was so easy and how crazy she felt for panicking so long. He's done this for 45 years...and does mostly bankruptcies now...but agreed to do my divorce so they could coincide...


Wow.....I think I asked more than one question....lol.......sorry, just really getting into the bankruptcy end more of my life...the divorce is going along and we go to court Jan 5, so I can focus more now on this.

Thanks all!

[HHM]

Most states usually have a wage (cash) exemption allowing you to keep a certain percentage of money in your bank account so long as the money in the bank account is directly traceable as wages.

However, as a general rule, you want to have as little cash as reasonably in your bank account on the day your file (less than $200). And it is ok if you pull the money out of your bank account within the weeks leading up to your BK, especially someone like yourself with low income as you can, in good faith, say you are using it for daily living expenses.

You didn't really ask a "question" about your student loan...so...????

[HopefulInOhio]

LOL....guess I didn't. I think I was just wanting to know if they see that large of a deposit in my account, will they wonder why I never put anything on my CC debt.

And, if I take so much out as deposits, do I have to show what I took it out for? I just want to make sure I've got my ducks in a row.

Thanks!

[Grace]

I thought student loan money had to be used for education. What happens when the tuition bill comes due?

[SinkingFast]

I thought student loan money had to be used for education. What happens when the tuition bill comes due?

Depends on the type of Student loan taken. Some are strictly for tuition, books, and fees. Costs directly associated with the college education.

Other Student Loans can be used for living expenses such as rent or dorm fees, food, clothing, transportation, and such. If it's related to getting you to and from school, to live while in school, and reasonably necessary, then some loans will cover those expenses.

[coma]

I thought student loan money had to be used for education. What happens when the tuition bill comes due?

If it is a stafford loan, it goes to the school, who takes the tuition amount then refunds the rest to the student.

[SinkingFast]

To your original Q about having money in your bank acct, Hopeful,.........

In looking at some Ohio BK Exemption websites, I'm seeing that you could only protect about $800 cash in the Bank. $400 under personal property and a $400 WildCard.

Of the money you currently, or will have in the bank, you'll have to pay a $299 BK filing fee. Will your attny be charging extra to file the BK? If so, there's that money you need set aside. And maybe you still owe the attny some on the divorce??

Beyond that, do you need anything for yourself or your daughter?? Clothes?? Have you been to the doctor and/or dentist recently?? Car repairs??

It sounds like you definitely do not wanna file BK with a large Bank acct balance. Be mindful of that and maybe ask your attny to confirm just how much money you can have on hand when you file.