Options when Unsecured debt exceeds Chapter 13 limits???

I have just calculated that my total unsecured debt is $385,000 which includes $250,000 in student loans. I've learned the Chapter 13 debt limit is $336,500 for unsecured debt.

Now what do I do??! I've asked 3 different reputable bankruptcy attorneys and they seem to still be scratching their head, flipping through bankruptcy manuals, and reviewing case precedents trying to find an answers for me. I have yet to hear back from any of them.

I have 2 credit card judgments pending and have to appear in court on Oct 28th.

I live in Missouri. Together, my husband and I make $160,000 gross per year, but with the 1st & 2nd mortgage payments, his truck & trailer payments, basic living expenses and all my debts we are barely holding on to our home. We are one month past due on both mortgages.

I stopped paying on all the credit cards and payday loans as one of the attornies suggested I do, but now I feel like he just left me out there on a limb because he hasn't called me back to tell me how to handle this situation.

By the way, my husband will not and does not need to file bankruptcy.

Is there any way I can file for a Chapter 7 since I have so much debt, large mortgage payments, and high living expenses??

I would appreciate some feedback.

You have to be able to pass the means test in order to file for Chapter 7, and it sounds like you make too much money. However, living expenses are also taken into account in the means test. If you go to legalconsumer.com/bankruptcy and enter your zip code, then click on "means test calculator", there is an online calculator that can help you determine whether you are eligible for Chapter 7. There is also a lot of good information on that site about both Chapter 7 and Chapter 13 BKs.

debt settlement program or debt management program can avert bankuptcy of any sort.

Debt settlement helps to slash your debt by 40 to 60%.

Debt management helps you with credit counseling and brings down the interest rate. It also waives off the late payment charges.

debt settlement companies will do nothing for student loans and that is the bulk of their debt.

Yes, most of my debt is a Sallie Mae student loan. All that education, two masters degrees, and I'm not smart enough to not be in so much debt. Aghh!! Does anyone know if student loans are ever discharged or eliminated in a Chapter 7, particularly when the debtor is already 49yrs old, can't afford a $1000/mo payment and would never be able to pay off this student loan in their lifetime. Makes me want to just put a gun to my head and pull the trigger. Help me somebody!

I'm a bankruptcy attorney in Colorado. Student loans can only be discharged if you can prove they are an undue hardship that is likely to continue. This would include if you became permanently disabled or something that prevented you from working and earning a living. Have you checked with the Federal Direct Student Loan consolidation program? That can make your payments more affordable if you enroll in the income contingent option.

Don't give up on filing bankruptcy because if you have too much debt to file Chapter 13. You need to find someone in your area who can help you file a Chapter 11 Consumer debt case. Chapter 11 usually is thought of to help businesses but it also helps consumers whose debts exceed the Chapter 13 limits.

Good luck!

I didn't know this was possible until today when the 4th lawyer I've talked to finally called me back and shared this info.

Thanks also to LWYRCHCK for confirming this.

The big issue for me still is $$$$! The lawyer that called me today said Consumer Chapt 11 is very, very expensive. I have no money and am already one month behind on both home mortgages. I'm sinking fast. Most attorneys want to be paid in full before they file a Chapt 7 or 11. If I had that kind of money just lying around, I wouldn't be in this bad financial bind.

I just recalculated my total unsecured debt again. It is now $417,369 which includes the $249,000 of student loan debt.

Can student loan debt be subtracted from total unsecured debt for Chapt 13 debt limit purposes??

If you file for Ch.7 you cannot liquidate unsecured priority claim which you have ( student loan). Maybe if you can prove undue hardship. See 11 USC Section 109 (b) re who may be a debtor and there is no debt limit for Ch.7. There is a limit for Ch.13 ($336,900 of unsecured debt) see 11 USC Section 109 (e). good luck Do you have someone in the family that is disabled and that you are helping them? Anyway go for Ch.7 to liquidate what you can but you will need 13 or 11 if you want to keep the house.

I really doubt that the OP will qualify for undue hardship with the income they have. Again, have you consolidated your federal loans?? That would give you some relief although probably not much again due to your income level.

Is everything under your name? The house, truck trailer?

The house is in my name & husband's, but 1st mortgage is in my name and my aunt who is elderly. The 2nd mortgage is in my husband's name only. 2nd mort would now be considered unsecured debt as property values have dropped so low we are upside down in our house and have no equity at all. All vehicles and the trailer are in my husband's name only.

I already consolidated my student loans once with Sallie Mae.

Does anyone know what might happen if I try to file a Chap 13 with my unsecured debt way over the $336,900 limit if the Chap 7 fails?

The student loans are going to kill me. Payment is almost $900 a month and I'm already 2 mos behind.

To answer someone else's question, Yes, I need to start helping to care for my mother who has recently been diagnosed with Alzheimer's. How does this effect my Chap 7 filing exactly?

I have a situation similar to yours - $416,000 in unsecured debt, mostly student loans, and I was told by a lawyer that I can first declare a Chapter 7 to eliminate some of the debt and then immediately declare a chapter 13 to restructure the rest of it. I've done some research and this seems to be true

Yes, you can file a chapter 7 and then immediately after discharge file a chapter 13 to take care of the all the items that didn't get discharged in the 7 -- informally known as a chapter 20. You just can't get a discharge in the 13 for 4 years after filing if you do them serially like that. The only problem with this strategy is if you have material goods that you can't exempt in the 7 because of your state's exemption limits, you will have to find a way to come up with cash to keep them, or the trustee is likely to sell them to pay your creditors. Definitely go talk to a BK attorney and have them do some number crunching and see if you stand to lose any assets in a 7. The beauty of an 11 is that, like a 13, the trustee can't take your stuff.

There's a reference in a comment above to student loans being priority claims, although I can't find that in the bankruptcy codes. It's important because if they do qualify as priority claims (I'm talking about student loans I owe the Federal Govt.), the payments would help me meet the Chapter 7 means test. Yes? No? Maybe?

Simple. You're not bankrupt. You're broke. Bankruptcy gets you out of debt. But debt isn't your problem. It's your spending. You spend too much.
Budget like this: Income 160k/yr - 25k/yr student loans - 27k/yr paydown on other unsecured = act like you have 108k income and no debt.
Max house payment = 25% = 27k/yr = $2250/mo
Live on the rest.

Student loans are not priority debts. They are nonchargeable unsecured debts. If they were priority debts, they would have to be paid in full within the plan. They can be paid pro rata during the plan but the unpaid balance remains at the end of the plan period.

None of this helps with "What do I do when with high student debts put me over the Chapter 13 unsecured debt limit and I can't meet the means test? "Your not bankrupt" sounds good in print but obviously they are and should be entitled to bankruptcy relief of some sort! Can anyone out there think of anything besides a Chapter 11 (based on the stated debt)?

I am in the same boat waytoomucydebt...however, I don't think there is any ruling on the "student loans" putting you over the limit, so it can be determined at this point by the trustee/court....until there is some ruling by a court regarding student loan is not secured but not dischargeable and the limits...we are sinking together my friend or maybe be the ones to make some sort of changes to the law ...but at our expense...good luck...post an update to help me and others...