Are student loans included in class 5 and paid according to DMI on
Posted: Tue Aug 28, 2012 5:30 pm
Debtor only has $2,500 in credit card debt. He has $120,000 in student
loan debt and wants to do a chapter 13 to get some breathing room on the
monthly student loan payments. On Form 22C his disposable monthly income
is very high: $2,800. This is purely theoretical and includes his wife's
income, who will not be filing. He doesn't actually have that kind of
disposable income.
My question is: if we propose to pay 100% of the non student loan unsecured
debt ($2,500), do we have to still pay the equivalent of $2,800/month for
60 months (which would all go to the student loans)? It's my understanding
that the general unsecureds are entitled to at least the DMI x 60. Are
student loans considered as part of the "general unsecureds" for the
purpose of this calculation? As you all know, although student loans are
not currently dischargeable, we are not allowed to give them priority
payments (at least not in CDCA), but can we pay them less than DMI x 60?
Are we able to designate that certain payments go to principal? Does the
nonfiling spouse's income HAVE to be considered when the plan is really
meant to pay down the separate student loan debt of the filer husband?
She's not liable on this debt as it was incurred before marriage. It
doesn't seem fair that her income (included on Form 22C) should be included
in his DMI under this circumstance.
Any guidance you can provide is appreciated.
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
Debtor only has $2,500 in credit card debt. He has $120,000 in student
loan debt and wants to do a chapter 13 to get some breathing room on the
monthly student loan payments. On Form 22C his disposable monthly
income is very high: $2,800. This is purely theoretical and includes
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