I went back to college in January 2013 and am preparing my Ch 7 intake. In January I received state and federal grants, and subdized/unsubsidized federal student loans. I have spent some of the money for living expenses and out of pocket education costs. All of the funds ($7,000 combined) were deposited into a HigherOne student account, and approximately half of that remains in my account today. I'm confused if the funds I have spent need to be listed as income, or all of it, and if the remaining funds are at risk or exempt. I will also be attending college this summer and fall, and will be accepting state and federal income based grants again. Do I include this on projected income?
Chapter 7 Bankruptcy Attorney
No, grants are not income and neither are student loans. There is a wild card exemption under Federal exemptions to protect the $3,500.00 in your bank account.
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Family Law Attorney
Yes. Any money you receive is listed on the means test. Any funds left at the time you file BK are listed in Sch.B and may be subject to confiscation by the trustee. Probably doesn't have to be listed an projected income. Time to talk with a local BK attorney.
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It's not income. But it likely doesn't matter because you probably qualify either way.
On the other hand, unless the funds are in trust, they may be at risk. But again, you most likely have enough wiggle room to exempt all $3,500 anyway.
Loans do not count as income because you are required to repay them, but everything else you receive other than social security ought to be included on the Means Test. Loans can be considered as income on the budget since you are using the money to pay for your living expenses. Hope this perspective helps!
Family Law Attorney
Anything that you have a legal requirement to repay (i.e., loans) is not considered income, but grant income (which, by definition, you don't repay) IS considered income, and you must include it. The amount you have in the account when you file will depend on whether you can exempt the balance, but the total amount MUST be include in your Means Test calculations.
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