QUESTION
How likely will I be forced to file for a chapter 13 bankruptcy?
Asked on Apr 01st, 2012 on Bankruptcy - New York
More details to this question:
I have $70,000 nondishcargeable student loan debt and approximately $10,000 in other unsecured debt. I have above median income but do pass the means test with no disposable income but current lawyer states that I may have to enter into a Chapter 13 plan to pay off the $10,000. My student loans are in default and currently I have entered into loan rehabilitation to pull them out and get them back on track. I also have an adult son who is claimed as my dependent. He has never worked and in this job market it has been tough for him to get a job but is trying only to get turned down constantly. Lawyer says that trustee may push for a Chapter 13 no matter the circumstances are with my son and low unsecured debt compared to student loan debt. How likely is it that I would be pushed into a Chapter 13 for the $10,000?
5 ANSWERS
If you pass the means test, it is very unlikely that the Trustee will force you into a Chapter 13 unless you have other assets. The amount of non-dischargeable student loan debt is irrelevant in a Chapter 7. You should consult another attorney before filing a Chapter 13, since those petitions come at significantly higher cost.
Answered on Apr 04th, 2012 at 10:36 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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The other circumstances are of little significance in determining your eligibility to file a chapter 7 when compared to your income level.
Answered on Apr 04th, 2012 at 10:18 AM
Chapter 7 Bankruptcy Attorney serving Clinton, MS
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Timothy Kevin Byrne Attorney at Law
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You have counsel. Either accept that advice or seek other counsel.
Answered on Apr 03rd, 2012 at 4:17 PM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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That is impossible to predict and I would usually rely on the local atty. If you are not sure, get a second opinion from a competent bankruptcy professional.
Answered on Apr 03rd, 2012 at 2:35 PM
Bankruptcy & Debt Attorney serving Syracuse, NY
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Theodore Lyons Araujo
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There are three basic tests to determine if you qualify for Chapter 7 or 13. First income minus ALLOWABLE expenses (term of art that is applied differently depending on where you live and file the bankruptcy). LIQUIDATION, or "do you have equity in stuff that is not protected by an exemption?" Exemptions are either State or Federal Laws that tell you what you get to keep. If you have equity in an amount higher then the applicable exemption (again, depends on where you live and where you file) or want to keep property that has equity that is not covered by an exemption at all, then you may have to file a chapter 13 to "repay" that equity to the creditors. The general rule here is that the creditors are supposed to get what they would have gotten had you filed a chapter 7 and the property would then have been liquidated and the equity paid to the creditors. The Means Test is the third general test. Based on your State of residence, household size at the time you file and gross income for the six months before you file you may be below or above the median income. Median income means that half of the households of a similar size are above and half are below a certain income. It is not an average. Below the median the Means Test is no issue. Above the Median Income gets complicated and requires a review from a qualified attorney. Having said all that the chapter under which you filed or may be filing may or my not be appropriate based on your individual circumstances. Relying on what others who have filed have to say or the experience of someone else who filed a bankruptcy will not aid you because everyone's circumstances are different.
Answered on Apr 03rd, 2012 at 1:40 PM