Question

Jon and Susan Bogren filed for voluntary bankruptcy under Chapter 7 and qualified by passing the means test. They own one car outright that has a value of $3,000, and they owe $10,000 to the bank for their second car. Their bankruptcy action will cause them to incur attorney’s fees, trustee fees, and court costs. Jon owes alimony and child support to his former wife and children. Jon and Susan also owe income taxes and penalties from 2015, and Susan owes $35,000 in student loans. Is any property exempt? Are all of the debts dischargeable in bankruptcy? If not, indicate which ones are not dischargeable. List the priority in which the creditors will be paid.

Answer 1

No property is exempt in above case:

Here are a few of the easiest non-exempt targets for the trustee:
•   Cash money or bank deposit
•   Commissions earned but not paid
•   Lawsuit settlement or judgment
•   Income tax refund
•   Property transferred fraudulently, especially to a family member
•   High dollar unsecured property, like a house or vehicle

If the Jon & Susan income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and both is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f).

Following debts are not dischargeable in bankruptcy:

1. Alimony and child support to his former wife and children owes by Jon

2. attorney’s fees, trustee fees, and court costs

3. Income taxes and penalties owe by Jon and Susan

4. Student loans taken by susan $35,000

5.Attorney’s fees, trustee fees, and court costs

Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property (such as an automobile), he or she may decide to "reaffirm" the debt

List of priority in which the creditors will be paid are:

1. Alimony and child support to his former wife and children owes by Jon

2. Attorney’s fees, trustee fees, and court costs

3. taxes which came due within the three years prior to the bankruptcy filing

4. Student loans taken by susan