With student loans in terms of being discharged, it is under something called “Tortality of Circumstances Test and the Brenner Test” The Brenner Test in order to show undue hardship the debtor must show inability in current level of income or expenses to maintain a minimal standard of living and the likelihood that this inability would persist for significant portion of the payment period and the existence of a good faith effort to repay the loans.

Under the Tortality of Circumstances Test, the debtor must prove by preponderance of evidence that his past, present and reasonably reliable future financial resources, dependence necessary living expenses and other related facts prevent him from paying the student loans in question while maintaining a minimal standard of living even when divided by pre-disposition debts.

Generally, student loans are exempt from discharge and bankruptcies under 11 USC 523(a) 8, unless accepting such a debt from discharge would impose an undue hardship on the debtor or the debtor’s independence.

What ends up happening is that the burden of proof is on the debtor’s undue hardship and an undue hardship is generally only found in truly unexceptional cases; such as illness or existence of unusually large number dependence.

Generally in Massachusetts there is a bigger definition, but it is generally 18 or up to 23 years old for full time students.  The Courts looks at whether emancipation has occurred as a question of fact; and what they will look at is looking at the relevant facts and circumstances surrounding each particular case.  There are questions about whether or not a child; particularly, after 18 is principally dependant upon the custodial parent or not.  So most times the answer is yes, but there are exceptions where you can argue that if someone is working full time and going to school, paying rent to a parent that child might not in fact be emancipated.

There are a lot of issues about whether or not on a Complaint for Modification there should be Temporary Motions.  A Complaint for Modification means where there is a material and substantial change in circumstance and the Judgment Modification is necessary. 

There is one general law, Mass General Laws c. 208 Section 24; which does not provide for Temporary Orders. However, there are issues on whether or not in order for Temporary Motions to be allowed and whether or not there is an emergency or irreparable harm that would be needed if the Temporary Motions were not allowed. 

         A lot of people think that if you file a Chapter 7 Bankruptcy that it will automatically ruin your credit for 7 years.  This is not true.  Generally, a Chapter 7 will only affect your credit for 1 year and after that, if you are doing what you need to do you can be able to get mortgages or loans and things of that nature.

         You will still have to re-establish your credit and for a lot of people filing for Bankruptcy you will be able to have a much better credit after a year or so then if you did not based on the debt ratio that you may have, because you will no longer have any of the sensitive debt, but not an immediate situation and not a guarantee that your credit will be good in a year or two, but if you do the steps that you need to, you should be in a much better shape, not only financially, but in credit score wise within a 1 year or two, even though it can affect your credit for up to 7 years.

            Generally, people want to file a Chapter 7 because it is simpler and less expensive and gets rid of the debt immediately.  However, one real advantage to a Chapter 13 is if you are behind on a secured loans; particularly, such as a house or a car loan, that you can catch up with that payment and it can get factored into your payment loan for money that you are behind on your secured loan.

            There is another advantage; which is if you don’t have enough exemptions that is discussed or can be looked up under Chapter 7, it still allows you to keep property and it might under the exemptions of the Chapter 7.

           Generally, most attorneys will give you a flat fee that either adds on or includes a $306.00 filing fee that the attorneys would pay for with their credit card.  Chapter 7 Bankruptcies range in terms of, if it is a Joint Petition or Individual Petition and how many creditors and what the involvement is and so forth.

           I do an initial consultation and would give you a quote after being able to get some information.  There are other things that a good attorney can do on a Chapter 7, including getting the Homestead before you file and doing a Motion to Avoid Traditional Liens and suggestions of bankruptcies and such.  The rate does not include the filing fee, which might be from $1,100.00 to $1,600.00 Dollars depending on the circumstances for a Chapter 7.  The question would be “where would you be able to get the money to pay for a Bankruptcy?”  That is a question a lot of people have wondered about.  Some of them certainly are if you either have cash on hand or a gift from friends or family.  If you borrow money from friends or family, a tax refund is a possibility; taking out a loan on a 401k, but that should definitely be discussed with the attorney prior to doing that.  There are questions about whether you will continue to pay current credit cards and unsecured loans.  There are a variety of other steps as well that would be discussed, but those are the most common circumstances.

There are certainly advantages and disadvantages to filing Bankruptcy.  Most people that are considering filing for Bankruptcy have issues with their credit and credit scores already.  One of the things about a Bankruptcy is that it gets rid of the debt in the Chapter 7 in approximately 3 to 4 months and you have that last debt.  You still need to after you have filed Bankruptcy, to be able to manage your money in an appropriate way, but your debts income ratio is much more reasonable because you no longer have the bills.

Under a Chapter 13 Bankruptcy, it is different than a simple Chapter 7 Bankruptcy.  However, Chapter 13 does allow you to get rid of debts like medical bills, bank loans, credit cards and loans, finance company loans.  However, instead of getting rid of it immediately, like it occurs in a Chapter 7, you have to do a payment plan; which generally is pennies on the dollar and then after either a 3 to 5 year period if you have made the payment that you need to make, your unsecured debt would be wiped out at that point.  That would also include late interest and penalties just like in a Chapter 7.

One of the real advantages of a Bankruptcy is that there is something called an “Automatic Stay,” and what that means is that once you have filed for Bankruptcy you get that Bankruptcy protection; which says that creditors cannot call you, they cannot send you letters and they cannot communicate with you unless they have motioned the court to remove the Automatic Stay.  The Bankruptcy court looks partially upon creditors that violate this Order and which one of the things in place.  The idea is that it stays in place until your debts are discharged and that there is a permanent order to protect you.  There certainly have been non-dischargeable debts; such as students, taxes, domestic obligations and things like that, but you still have to pay.  Most of the unsecured debt you would not have to pay.