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    waregl10's Avatar
    waregl10 Posts: 1, Reputation: 1
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    #1

    Jul 19, 2014, 12:30 PM
    Do I have to collect soc sec if eligible in order to file for bankruptcy
    In order to potentially discharge student loan debt in bankruptcy I will need to meet the three (3) conditions of the Brunner test. I anticipate that I will be laid off at the end of this year. I will be forced to file chapter 7 proceedings. In order to meet the first condition of the Brunner test I must show that repayment of the PLUS loan that I have will cause hardship. I will be able to file for and receive unemployment compensation when I am laid off. This will amount to approx $1200 per month. I will also be eligible to file for ss retirement benefits. My question is , would it be best for me to not file for my ss retirement benefits until after my chapter 7 bankruptcy is complete? I was thinking that in order to show the lowest income possible, (in order to help meeting the Brunner test), it would be best not to be collecting the ss retirement benefit. What do you think?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,277, Reputation: 7690
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    #2

    Jul 19, 2014, 09:26 PM
    If you can, file and receive, and the only reason you are not.. is to show lower income, this would be considered a fraud ( or may be viewed so by the court) if discovered, it may disqualify the entire bankruptcy.

    They will look very closely at the hardship. ( most are denied) if you do not, you need an attorney for this, level of bankruptcy, since you can expect it to be contested.
    joypulv's Avatar
    joypulv Posts: 21,593, Reputation: 2941
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    #3

    Jul 20, 2014, 02:55 AM
    I'm not an expert on this subject, but given that student loans aren't usually discharged under Chap7, I don't see a good chance of waiting to collect SS getting by the judge. With UI of 1200/mo, your salary must be pretty good. You can't pay the 110/mo or whatever the amount is now for minimum payment?

    And if your loan is a gov't loan, they have 6 months past the finalization to collect.
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #4

    Aug 12, 2014, 11:25 AM
    The Brunner Test is as follows:

    "...a standard for "undue hardship" requiring a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans. ..." Student loans in the United States - Wikipedia, the free encyclopedia

    It is clear that eligibility for Social Security benefits would clearly fall within the second prong of the test. And, as others have indicated, to try to hide the Social Security by waiting to file would be fraudulent.

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