Do I HAVE to include ALL unsecured debt?

Date: Sun, 03/29/2009 - 09:23
Submitted by on Sun, 03/29/2009 - 09:23
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After doing lots of research, reading, and meeting with/and talking to financial advisors and etc., I have come to the tough decision to file Ch. 7 in California.

I have already chosen a law firm and had my first consultation. My next step is to make a second appointment, pay the retaining fee to legally retain the attornies to handle my bankruptcy, and am supposed to list all my unsecured debt and the creditors they are with and their contact information. After throwing away many years' worth of income on the interest of creditors such as Cashcall, ThinkCash, HSBC, Beneficial, etc., I am comfortable with my choice. However, there is one debt ( other than my car ) that I want to keep paying on: my Prosper loans. I have 2 loans through Prosper, and it may sound silly or hypocritical to some, since I am filing BK ANYWAY, but I feel morally obligated to repay these 2 loans, since they were leant to me not by greedy institutions, but by generous people who had faith in me that I wouldn't let them down and would repay. The first loan I have paid 2 years of the total 3-year term loan, and the second one I have paid about 1 year worth of it's 3 year term. I honestly DO NOT want to file BK on these 2 unsecured loans, but I have looked at my options and I am unable to pay them off before I officially file. But if I file BK on all my other unsecured debt, the amount of money I would have in my pocket again would be able to pay both loans off within a few months of filing. So my question is, can I choose NOT to include those 2 unsecured loans on the paperwork of my creditors on my bankruptcy? Can I get in trouble or be accused of withholding information if I don't mention them to my attorney at all? Can my attorney FORCE me to include them in my BK?

Also, my second question is is that I also have private student loans which I know I can't include in the BK. I had originally $64k in student loans interest free, and in the last 5 years I have paid it down to about $28k. Because I had such a high GPA in HS and my co-signer had a credit score in the 800s, I was able to get the loans interest free. If I file BK, is there a possibility that interest may now be tacked onto my student loans because of the hit my credit is going to take from filing BK? I hope not, because my credit is already bad because of my huge debt to income ratio, and because I have one account in collections, but so far with all that, my private student loan terms have not be affected. So I am hoping BK will not alter my student loan terms as long as I continue to pay them on time as I always have. But if anyone knows, please say! I would like to pay the retaining fee and fill out the paperwork this week so that my attornies can start handling phone calls from my creditors, as I have just opened a new bank account, re-routed my payroll deposit, and will be closing my primary bank account that my creditors withdraw payment from this week.

So nervous- but so hopeful for a chance to start all over again wiser and more cautious!


UNCERTAIN.....as you probaly already know, Cash Call is horrible to work with. I had an 'issue' with them, too. Prosper? I've heard of them, but, not REALLY sure how they work..can you explain? A friend of mone deals with approving Student Loans....I have a Student Loan, myself ( Federal Loan). She was telling me it doesn't matter whether or not the Student loan is a Private loan or not, you can't file BK on it.


Submitted by sdchargers_63 on Sun, 03/29/2009 - 16:27

sdchargers_63

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I was told that even if you file bankruptcy against someone, such as your doctor, you can still pay them the payments that you owe them afterwards. That would eliminate the embarassment when going to an appointment there. You would still have to list them on your list of creditors though.


Submitted by on Sun, 03/29/2009 - 18:40

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Thanks everyone- yes, I do understand that I cannot file bankruptcy on student loans. My student loans are currently interest free which makes a huge difference in my ability to pay them back. My question was was that if I file bankruptcy on my unsecured debt, could my student loans lender re-evaluate my terms with them like adding interest to my student loans based on the credit ding my report is going to get for filing a bankruptcy? Like, how sometimes if you default with Creditor A, creditor B sees that default while doing an annual review of your credit, and raises your APR even tho they are not related to Creditor A and you have a good history with Creditor B.

I am still confused about Prosper, tho. I thought I had read somewhere that you could choose to not include in your bankruptcy an account you want to keep open- say you have a good credit card in good standing that you would like to not file on so as to keep it around in case of emergencies after bankruptcy ( even tho I do understand the creditor may still close your account anyway, because it may be a conflict of interest, etc. ). If anyone can point me in the right direction, I would be so grateful. This is the only thing that has kept me from paying the retaining fee and officially starting the bankruptcy. If worse comes to worse, I may just have to be upfront with my attorney and ask them if I can arrange it somehow so that those Prosper loans aren't included or don't get discharged with the rest. I have to admit that I am embarassed to tell them that I feel guilty about filing on those 2 loans, because I guess from a bankruptcy attorney's standpoint, that's a silly way to feel if I am going to file BK anyway.


Submitted by on Sun, 03/29/2009 - 23:32

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Yes, ALL contracts, debts must be listed.

If you want to continue after bk paying on anything you must fill out this form:
reaffirmation agreement
uscourts.gov/rules/BK_Forms_06_Dir/Form_240A_0107.pdf

"Reaffirming" a debt means you continue as if nothing happened ---as if there was no bk.


Submitted by on Tue, 03/31/2009 - 09:38

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Thank you for the link to the form! Does that mean I can't continue paying while filing the bankruptcy? Do I have to wait until after the bankruptcy is completely discharged to fill out that form and make payments again? What about my car ( secured? ). Do I stop making payments to them until the BK is discharged and I fill out that form? I'm scared to stop paying on the card coz I don't want them to repossess it.


Submitted by on Tue, 03/31/2009 - 19:28

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You are filing BK with the Fed Govt., not anyone else. They will have the Dept. of Justice reviewing you as well, so I wouldn't do anything below board or try to hide anything.
ASK YOUR ATTORNEY WHAT YOU SHOULD OR SHOULDN'T INCLUDE...THAT'S WHY YOU ARE PAYING THEM!


Submitted by on Tue, 04/07/2009 - 08:50

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