A few questions regarding bankruptcy

[patty6]

My husband and I are considering filing for bankruptcy and have a few questions hopefully someone can help me understand... We are considering this route because our bills exceed our income. We have a home we would like to keep. I read on another post that an attorney may give you a budget sheet in which you determine how much you spend on things like food and clothes. We are at the point that we have to either decide on paying for our groceries or for the light bill not taking into consideration all the other bills (credit cards, mortgage, etc..)Will the fact that our bills exceed our income determine how much, on a monthly basis, we will have to pay back once the bankruptcy budget plan has been set or how does this work? Please help me understand! If you could share your experiences with me after filing for bankruptcy, that would be great.... Also, I have about 28k in student loans, what possiblities do we have of getting these discharged? Anyone who has experience with student loans and bankruptcy, please share your stories! Thanks!

[adaughter]

Well as soon as you meet with a lawyer and tell him about your situation/finances he will asses it and will have to do a means test (household income and what you can afford) and let you know if it qualifies for a ch 7 or 13, 13 is the one you would have to make a budget plan and pay back debts in 5 years if your income exceeds state standards. Most good lawyers give free consultations over the phone and in office so you should definitely look into that right away.

As for the student loans I believe they are not dischargable because they are non exempt debt but unless you can prove that repaying the loan creates an undue hardship on you or your family Prior law allowed their discharge once they had been in pay status for 7 years. The law changed in the fall of 1998.

Proving hardship usually requires showing that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the loan. Some courts will discharge part of the loan on a showing that repaying it all would be a hardship.

Student loans are sometimes unenforceable due to school closures, fraud, etc. Chapter 13 can provide a way to cure defaults on student loans, or to pay them off over the course of the plan. hope this helps!

[epiphany]

So much depends on exactly what and how much your expenses are, and what your income is. Yes, a lawyer is best to consult (and you should do that no matter what) but if you can give some figures here, there are those who will be able to give you some idea what you may be in for.

They will also want to know how much equity is in your home, are you current on the payments, etc.

Sorry, I do not have much knowledge on Chapter 13's except for what I read but I do know that student loans are not dischargable unless funded through a private entity.

I am sure if you provide the stats, someone will jump in to help.

Good luck,
ep