341 surprise. not too happy.

[Shimpo]

I had my meeting today. My attorney had another client at the same time, so he kept going back and forth between rooms. No big deal, I didn't feel overly stressed. I knew I had been honest, and the attorney lead me to believe everything was fine for my Chapter 7.

BIG MISTAKE on my part: I never asked for copies of my paperwork he submitted. I spent so much time on his questionnaire (which was more detailed,) I figured he compiled the information correctly. I only glanced over the forms when I signed. Stupid me for assuming he did them correctly.

Ten minutes before my name is called, my attorney tells me "we have a problem." He "accidentally" added my car payment twice!?!?! I no longer pass the means test!

My name is called. At this point I feel like I've got the crappiest lawyer around, and I'm angry I didn't catch the error. I'm more pissed than nervous. I was polite and professional to the trustee. I don't know if he picked up on my irritation with my lawyer. At my meeting there were two trustees, the main trustee (who conducted the meetings for everyone else,) and one additional trustee. Lucky me for the extra attention.

Apparently my lawyer listed my car payment twice, and the ownership of another car twice. The trustee had the mistakes circled. After a brief discussion I was dismissed. They assume I've got an additional $506 unaccounted for based on the paperwork. I'll be looking for other errors, now that I have copies of everything. But that doesn't help my current situation.

I've got 10 days to amend the paperwork. Which now means I have to develop a payment plan. My lawyer wants an additional $2000 (after the $1500 I've already payed) to convert this to a Chapter 13. My money is so tight now, I don't know if I can afford the $400-$500 payment for 3-5 years, plus attorney fees.

Do I withdraw my case and worry about it later (let the creditors sue me?) Do I go with the chapter 13 and hope my payment is manageable? Do I stick with this lawyer, and hope he doesn't make another mistake?

... frustrating.

[SMinGA]

You have a right to be upset with the atty and errors - but did you not know that you had disposable income?

First step: go thru your schedules I & J (and others, but most importantly for now these 2) and check for accuracy. If he overcounted expenses, make sure he did not do the same for income.

Address your expenses - is anything left out? Once you are confident with all the #s, you should see what your DMI arrives at.

Regarding the atty fee, ask your atty to include the additional $2000 in the plan. Advise if not, you'd rather have this dismiss and start fresh with a different attorney. (If you are not confident/able to pay him more money upfront now of course.)

[Shimpo]

Thanks for the good advise. I'm going to go through everything this evening. I asked my lawyer why my 401k repayment isn't deducted from my income. He said it wasn't aloud. That's $300 a month right there. (Shortly before deciding to go through bankruptcy, I borrowed against my 401 to pay off a couple credit cards. I'm not sure if I can stop the repayment and pay the tax penalty. I need to look into that too.) thanks again.

[Meatstick]

Your attorney is correct, in a Chapter 7 a 401k repayment is not allowed when calculating DMI. However if you do go to a Ch.13 it is then allowed in calculating DMI and in some cases being able to add that in might allow you to file a Ch.7.

[SMinGA]

Those payments should be listed in your petition, where it asks if $600 or more have been paid to a creditor in the last 90 days. (Assuming it was within the requested time frame. I believe it does state 90 days...) The trustee may take the $ back to distribute evenly.

401k loan payments are not treated as an expense in a ch. 7, but are in a ch. 13. I didn't know how that would work - if you happened to have DMI due to the 401k loan not being counted for a 7, but not have DMI for a 13 once the 401k was considered. A post by HHM in the past ~2 days indicated if that was the situation then you'd get the ch. 7.

[Shimpo]

Thank you both for the great advice!

[Shimpo]

Update: My I and J are fine. There is no disposable income after my expenses. it's the means test that reflects an extra $500 a month.

... recently I received a Statement of presumed abuse from the UST. "... the product of the debtor's current monthly income, multiplied by 12, is not less than the requirements specified in section 704(b)(2)(A) or B. ..." 8/4/10

After learning about PACER (thanks to this forum), I found a couple more items that I don't understand. There's an entry from the Trustee for 8/5/10. Report of No Distribution and a request to be discharged from further duties as trustee. ..." Is this good or bad?

Then on 8/11: There's another entry "The Debtor is certified as having complied with all filing requirements of 11 U.S.C. sec. 521(a)(1), with the exception of subparagraph 521(a)(1)(B)(iv), which is not filed with the court pursuant to Administrative Order 05-04. ..." What does this mean?

I sent my attorney bills and receipts for everything I could find that supports my expenses. I believe he's going to challenge it. But right now I have no clue what's going on. Any advice/thoughts as to what's going on is appreciated.

[Maine]

subparagraph 521(a)(1)(B)(iv) is the 60 days pay stubs
Administrative Order 05-04 says that you do not have to provide subparagraph 521(a)(1)(B)(iv) unless they ask for it. (if they did not ask then that is why they listed you did not provide it, that is ok. If they asked for it you need to get them the wage stubs asap)

The "report of no distribution" usually means they have found you to not have assetts they can sell to pay any of your creditors. The "request to be discharged as trustee" means that the trustee feels his job is done and you are just waiting on the 60 days to make sure there are no substantial claims by creditors.

It looks like you might have your BK, check on the pay stub thing, but CONGRATS!

[Shimpo]

thanks for the clarification! I really hope you're correct on it going through!

But I'm still nervous. I asked my attorney about the two entries, and he didn't respond to my questions. He's more interested in other supportive evidence I've been sending him. I believe he's still building my case against the U.S. trustee who sent the "Statement of Presumed Abuse." I'm worried if the UST is not satisfied, he'll dismiss or covert it. So even though the other trustee is done, the UST may not be.

[Maine]

My question to the lawyer would be this: The UST filed his persumption of abuse on 8/4 then on 8/5 the no distribution was filed. Does that mean the UST's claim was resolved and you are ok?

Can your lawyer contact the UST? Maybe the revised documents and proof satisfied the UST and they dropped their assumption of abuse????

Keep us posted. Good Luck

[Shimpo]

WOOT WOOT!!! Good news!!!

The United States Trustee previously filed a statement under section 704(b)(1)(A) of the Bankruptcy Code indicating an inability to determine whether this case would be presumed to be an abuse. The United States Trustee has reviewed all materials filed and submitted by the Debtor, including certain additional documents received after the filing of the United States Trustee's initial statement under section 704(b)(1)(A). Based on this review, the United States Trustee has determined that the Debtor's case is NOT presumed to be an abuse under section 707(b)(2). Filed by U.S. Trustee. Filed by US Trustee (Entered: 09/10/2010)

Hopefully now I'll get my discharge!!! I'll let you know when everything is final. But it's looking good at this point.

[kartoons19]

Congratulations Shimpo! It must be a relief to have that issue resolved.

[Shimpo]

Thanks! I wish you all the best too!

[Shimpo]

That's it! Discharged/Case Closed today!!!

Finally, after many headaches, it's over!!! I'm not even sure how I feel yet. My case was discharged and closed today. You all are first to know.

Good luck everyone still going through it, your time is coming. It was comforting to read everyone's post throughout the process. I never felt alone.

[onthefence]

Congrats - looks like you had some twists and turns getting there, but you made it!!! Good luck moving forward!