QUESTION
Will bankruptcy help me get back on solid ground?
Asked on Dec 07th, 2012 on Bankruptcy - Kansas
More details to this question:
I have a full-time job that nets about $3,000 per month. I have six children: four at home, one married, and another in college. I support the four at home and aid the one in college. I am the sole income provider. I am married, and my spouse relies on my support. My monthly expenses are about $4,500. I have student loans totalling about $120,000: $80,000 of which are private, unsubsidized student loans. I have been trying to make payments on the student loans for the past several months by getting food donations from my church (so not to buy groceries) and using a line of credit. My line of credit is now maxed out, and I am at the end of a long rope. I have exhausted all of my options: I am deferring some student loans, and my current payment on the others is $640 per month. (Payment on all of the loans would be about $900 per month.) A company has offered to reduce the payment to interest only for two years, which would reduce payments to $420 per month. The problem is that there just isn’t enough money to pay these loans at all—not to mention food and shelter expenses. I rent a house; I have a car payment of only $88 per month; I have a line of credit debt of $10,500.; I have no other credit card debt. Please offer your advice.
12 ANSWERS
Daniel James Wilson
Please schedule a consultation with a BK attorney.
Answered on Apr 26th, 2013 at 4:55 AM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Student loans are currently not dischargeable, but many hope that will someday change at least with regard to private student loans.
Answered on Dec 11th, 2012 at 9:35 PM
Bankruptcy Attorney serving Kalamazoo, MI
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Debt Relief Law Center
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I would definitely consider filing a Chapter 7 consumer bankruptcy. Consult with area bankruptcy attorney, shop around for the lowest price.
Answered on Dec 11th, 2012 at 3:09 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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You will have to see an attorney with specifics, the issues are the discharge ability on your student loans, and that your expenses exceed income.
Answered on Dec 10th, 2012 at 1:32 PM
There is a long list of things that bankruptcy cannot do for you. It can't discharge your student loans & it can't help you to meet your living expenses. All filing bankruptcy can do is eliminate your unsecured debts. If your line of credit is tied to your home as a HELOC, it is a second mortgage. While you can eliminate this debt in bankruptcy, you can't eliminate the connection between this debt and the title to your real estate. The advice I am giving you comes too late, you must find a way to live within your means and adjust your expectations for the way you support your family.
Answered on Dec 10th, 2012 at 1:11 PM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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My biggest concern is whether your student loans would be dischargeable. The applicable section in the bankruptcy code is 11 U.S.C. 523(a)(8) which states as follows: 8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for (A) (i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual; If your loans are not of these types, then they could be dischargeable in a bankruptcy case. HOWEVER, even if they are dischargeable, you need to find a way to ensure that your future income and future expenses are in balance before trying to discharge other debts or you will still be in a hole financially.
Answered on Dec 10th, 2012 at 12:15 PM
Bankruptcy Law Attorney serving Livingston, NJ
Partner at
Law Office of Stuart M. Nachbar, P.C.
2 Awards
Sorry to say that Student loans are not dischargeable, so this may not be an avenue you wish to pursue.
Answered on Dec 10th, 2012 at 12:13 PM
Deborah F. Bowinski
A bankruptcy might help you, but generally student loans are only dis chargeable in bankruptcy under very specific and limited circumstances, and then, only after significant and costly litigation. Your unsecured debt would be dis chargeable, buy bankruptcy does not have a way of reducing the continuing costs of managing a household. You do not provide any information about why you support your spouse or about how old the children at home are. It does sound as though you really are not able to continue to help your college student AND feed, clothe, and shelter those still home. Bankruptcy would help a little bit, but it sounds as though what you really require is additional income as well. In all honesty, until you can cover the current monthly costs of your household (without counting the debt payments) it may be premature to file.
Answered on Dec 10th, 2012 at 11:28 AM
It sounds like bankruptcy could be a real help to you in your current situation. The entire bankruptcy system is based on the idea of helping people in difficult financial situation to get back on their feet.
Answered on Dec 10th, 2012 at 11:27 AM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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Bankruptcy may be able to help you depending on the types of unsecured debts that you have that can be discharged and perhaps secured one that can be modified. You should speak to a bankruptcy attorney in your area. Most give free consultations and can confidentially go over your entire situation and give you your options.
Answered on Dec 10th, 2012 at 11:25 AM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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You need to consult with an experienced bankruptcy attorney in your area. Student loans are largely considered to be non-dis chargeable. But you might be able to get them discharged. You cannot do this without an attorney.
Answered on Dec 10th, 2012 at 11:24 AM
Bankruptcy Attorney serving Overland Park, KS
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The Smalley Law Firm, LLC
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Bankruptcy will not allow you to discharge your student loans. I suggest you consult with a bankruptcy attorney to discuss your options.
Answered on Dec 10th, 2012 at 11:23 AM