My question involves bankruptcy in the state of: Michigan
Hello I have recently received a Chapter 7 discharge in the state of Michigan. For emotional reasons, my teenage daughter was unable to attend public school. We had a Psych Evaluation that reccomended she attend a Therapudic boarding school. To keep this short, their was wrist cutting involved. Originally, I sent her to Mission Mt in Montana, She ran from there and was referred to a 2 3 week Wilderness program at 13k. Along with another Psycholigist rec, I chose to send her to Cedar Mt, classified as a Residential Treatment Center. These costs were over 5k/ months including the medical element along with school costs. I just received a changed forbearance letter and a bill for 10k from AES American Education Services on June 26th. There is another loan amt for about 70k from a Key Bank Acheiver loan, whom I'm assuming will send the same letter.
I told my layer up front about this, a few different times and explained that the IRS let me write these tuitions off my tax return as medical expences (please see IRS Regulation below) and even though they were listed on my credit report as student loans, they were medically necessary and hence should be dismissed IMO. I offered to get him supporting documents for review. His position, was that he thought they were still school loans and we would see what the trustee found. If they were not dismissed, we would worry about it then. My layer was somewhat short. Being as he was referred as one of the best BK Attournies in the area, I thought, He's the pro, let him handle it. To my suprise, at the 341 meeting of creditors, he sent a young attourney there to meet me 15 minuits before our appt. and I was supposed to brief him on my situation. That was extremely uncomfortable for me as I paid $2500 to be represented by the the premium Attorney I chose. I briefed lawyer 2 on the school loan situation as well and it never came up in our 341 meeting. Previously I didn't understand, that this could be our last meeting with the Trustee before he grants a dismissal. I thought the meeting was to grant creditors a chance to show up and voice concerns.
I now feel, I was run through the BK process like a cattle and that he was supposed to be pro active from the start and prepare the Trustee for a decision to rule the loan as medical. Additional info to that comment was that my dismissal took about 6 mths from the 341 meeting. Lawyer said trustee dropped the ball, didn't file something and my case slipped through the cracks. I'm feeling is, something is not right and they should have been pro active and checking after 70 days with no dismissal. The staff answered my calls with "Just Wait for a letter"
My questions are
1) Were we supposed to be pro active up front and provide the trustee with proof and explaination as to medical care status of listed student loan or start an adversary hearing?
2) How should I proceed now?
3) Based on your answers, I will need to decide weather the attorney did me a dis service and should I look for another attourney to move forward?
Thought it better to get the answer from an outside source before I called them.
Thanks in advance for your help
John
Treasury Regulations 1.213-1 (shortened by me)
Rev. Rul. 58-261
Rev. Rul. 58-280
1.213-1(e)(1)(v) The cost of in-patient hospital care (including the cost of meals and lodging
therein) is an expenditure for medical care.
For example, medical care includes the entire cost of institutional care
for a person who is mentally ill and unsafe when left alone. While ordinary education is not
medical care, the cost of medical care includes the cost of attending a special school for a
mentally or physically handicapped individual, if his condition is such that the resources of
the institution for alleviating such mental or physical handicap are a principal reason for
his presence there. In such a case, the cost of attending such a special school will include the
cost of meals and lodging, if supplied, and the cost of ordinary education furnished which is
incidental to the special services furnished by the school and thus is within the meaning of the term 'medical care'.

