I am deciding on whether to file chapter 7 and a big part of it will be if i can get some very old student loans discharged.
I'm a 47 year old male. I won't go into why I have gotten into this situation.
I have two student loans. A Stafford and a Perkins. The Stafford has a principle of $2,800 and as of 2011 outstanding interest of $4,915 for a total due as of 2011 of $7,715. The Perkins has a principle of $700 and interest as of 2011 of $943 for a total of $1,643. Both now are probably around $15k. These loans are from 1987 and have been in default for many many years. Using the income based repayment plan calculator on the USDE website my monthly payments based on my salary for the past 3-5 years would be $0 if I could get on the new Obama plans.
My circumstances right now-
1- My yearly income for the last 3-5 years has been between $7,500 and $12,000 with the past two years only being $7,500 or so. I work through a hiring hall and work has dropped considerably.
2- Since 2012 I have had a wage garnishment. Not sure if this is because of the student loans or federal taxes. (see #3)
3- I owe around $16k in past due federal taxes. $11k of this will reach it's statute of limitations in Feb 2016. The remaining amount reaches it's statute of limitations in Aug 2017. I am hoping to work something out with the IRS or the bankruptcy court.
4- I have other debts but they only total around $3k so my debt total including the taxes and student loans is around $30-32k right now. If I wait until February then $11k will drop off from federal tax SoL and so in a few months it'll be around $19-21k.
5- I have no medical conditions that i would bring up to the court
6- I do not own a car and my physical assets are probably worth less than $500. My monthly bills are around $700.
7- I don't see my circumstances changing in the near future without some relief of the federal taxes and student loans. I cannot start rebuilding my life when I can't even get a bank account or car or even a decent apartment.
Not sure if I can pass the Brunner Test or not but I would like to try.
I have two options that I can see right now.
1- File bankruptcy and hope to get the student loans either discharged partly or whole. Settle with IRS for the remaining balance after Feb 2016.
2- Not file bankruptcy and enter into the new Income Based Repayment plan where my payments will be between $0 and $17/month for 25 years (I'll be 73 years old) and then the student loans will be discharged. Same deal as the other concerning the federal taxes. Paying the $3k in regular debts.
Can someone give me some advice concerning the chapter 7 and student loans/federal taxes please? Anything you guys can tell me would be appreciated.