Chapter 13 Bankruptcy Is Causing Me So Much Stress

[asmith1818]

I have been in my chapter 13 bankruptcy plan since March 2018. I filed for a chapter 7 and after an exhaustive battle with the attorney from the courts, a 2004 examination, months of stress I was told my only option would be to convert to chapter 13 or get my case dismissed.

My attorney tried to tell me that the dismissal wouldn't be the end of the world, some creditors wouldnt even try to collect. I racked up over $100k in debt and literally sold off almost all my possessions before filing to just keep my head above water. When I was pretty much out of things to sell, I filed and I wasnt accurate on my bankruptcy petitions. I kept off about 2000 dollars in items, I was scared I was going to need to sell them at some point for on going legal fees, a coat, some shoes, a bag. Well the 2004 examination nightmare literally was a nightmare all over me not disclosing this 2000 dollars in items and the paper trail catching up with me. So it was all my fault and I feel horrible about it, should always be honest I know. In the moment, I was so scared and desperate I was thinking of just jumping out of the window which in the heat of the moment I told the attorney at the 2004 meeting to just open the window and put me out of my misery.

After that they decided to let me file for a ch13 but wanted me to make substantial payments to show them good faith. Well my salary of 40k they wanted me to pay 2000 a month. I moved back in with family, cut all my expenses and I am drowning. I cant even live, I am paying about 60 percent of my salary to trustee and cant afford to live this way.

I am just stuck in this horrible place and needed to vent. None of my few friends I have told understand what I am going through, they think I should just pay what I can and not stress. I am literally losing my hair over this and no one understands.

[IamOld]

Oh my dear God - how in the world can you be asked to pay that much on 40k/mo? It sounds like your lawyer screwed up.

I can't breath most days, but they really really raked you over the coals. Ok...there are a LOT of great people on here!!

I know I'm not telling you something I'm sure you haven't already thought of - but - is there any way you could get another attorney to look at your case? And how in the world would they not let you file Ch 7?

[asmith1818]

Thanks for listening, i just needed to vent today. I was contemplating contacting my attorney and asking about a possible conversion to a chapter 7. I dont own anything, no home, no car, nothing. I'm side hustling as much extra work as I can but I still am never caught up and basically always at 0 each month. I need to look into seeing if another attorney could look at my case, thank you for that. I just need to bite the bullet and do it.

[justbroke]

Yes, it reads as though the Chapter 13 attorney didn't spend much time working on a plan. Just my basic math says that someone that makes $40K will take home $32K a year (Source: iCalculator). That means only about $2,667/month.

So there is obviously something wrong. If they calculated your payment at $2,000/month before you even moved, there is something very very wrong. If you have a car, that's $589/month allowed. If you have an apartment in Illinois, I'll just guess that's at least $1,000/month for a 1-bedroom. Food, clothing and misc are about $580/month. That's over $2,000 right there. Something went very wrong.

I would try to see if another attorney will even talk to you. Perhaps get your case voluntarily dismissed. Then look back at refiling.

[Barbisi]

As much as I hate my own BK13 (for reasons unrelated to the monthly payment plan amount) ,your situation is enough to drive any one over the edge! $2000 sounds unreasonable , untenable and totally ridiculous!
I hope you can free yourself from these nightmare fetters soon! Best wishes on a better future!

[asmith1818]

Sorry I have not followed up on any of these posts. I really appreciate the feedback. I have not contacted my attorney, I had such a gut wrenching experience from filing in January 2018 to the conversion to the chapter 13 in June 2018, I am dreading so much starting this process over again.

But, all I keep doing is getting myself further into trouble each month I play this smoke and mirrors game to keep my head above the water. I am going to bite the bullet this week and contact my attorney about converting my case to a chapter 7.

I would consider modifying the payments if I could, but I have incurred some medical bills and personal loans that I can not afford through this process, which I know is not something I am allowed to do but was desperate.

I filed my taxes and and my income after taxes for 2019 was $31,870. Nearly 42% of my take home pay. I just need to scrape the filing fee money the attorney will want to file my case again as a chapter 7 if they even will. I am going to make the call this week though, thanks everyone.

[justbroke]

The nice thing about converting from Chapter 13 to Chapter 7 is that you get to use ths super-secret clause in 11 USC 348(d). (I know that section of the bankruptcy code by heart with no need to look it up!). You get to include any "new" debt since filing the Chapter 13 as if that debt existed the day before you filed. The only exception is things that would have otherwise already been non-dischargeable (think taxes).

Other than that... 348(d) could be a lifesaver.

[asmith1818]

The nice thing about converting from Chapter 13 to Chapter 7 is that you get to use ths super-secret clause in 11 USC 348(d). (I know that section of the bankruptcy code by heart with no need to look it up!). You get to include any "new" debt since filing the Chapter 13 as if that debt existed the day before you filed. The only exception is things that would have otherwise already been non-dischargeable (think taxes).

Other than that... 348(d) could be a lifesaver.

Thank you so much! That does help. Maybe the fee's will be less to when converting the case. I will contact attorney soon and see what they say.

[justbroke]

Thank you so much! That does help. Maybe the fee's will be less to when converting the case. I will contact attorney soon and see what they say.

Fees depend on the attorney. The "filing" fee to convert is just the difference between Chapter 7 and Chapter 13, which is around $25-35??? However, your attorney "may" need to do a new Means Test (district specific) and certainly a new Schedule I and Schedule J, which means more work for them.

[asmith1818]

Fees depend on the attorney. The "filing" fee to convert is just the difference between Chapter 7 and Chapter 13, which is around $25-35??? However, your attorney "may" need to do a new Means Test (district specific) and certainly a new Schedule I and Schedule J, which means more work for them.

Thank you for the information.

[kmccoleman]

First and foremost, I need you to BREATHE! I know that's easier to say and harder to do but once your stress level gets to the point you want to be taken out, then it's time to pause and take a step back.

Second, you definitely need to have another attorney look over your case. 40K with no other wordly possessions and 100K in debts sounds like the definition of a Chapter 7 means test approval. I get it, my lawyer sucks too. But at least she ran all the numbers to make sure the only option I did have was Chapter 13 (my soon to be ex is a high income earner and his income is included when doing my paperwork).

Definitely have someone else give it a look. It's super stressful and I filed maybe a month after you for my Chapter 13. It's definitely been a struggle and my bankruptcy has come with a mandatory wage order so that my payment can be paid out directly from my payroll which is going to suck because I start a new job next week and I don't want an order on my income until I'm done with my 90 day probation at the very least.

But know you are not alone. We're all or have all been exactly where you are. From the freakouts before the 341, to the anticipation of confirmation to the years that feel like decades until you've completed the entire plan to the agonizing waiting of the Trustee to submit a final report and discharge you. It's a lot, but everyone here understands and are great support!

[womanonfire]

I have been in my chapter 13 bankruptcy plan since March 2018. I filed for a chapter 7 and after an exhaustive battle with the attorney from the courts, a 2004 examination, months of stress I was told my only option would be to convert to chapter 13 or get my case dismissed.

My attorney tried to tell me that the dismissal wouldn't be the end of the world, some creditors wouldnt even try to collect. I racked up over $100k in debt and literally sold off almost all my possessions before filing to just keep my head above water. When I was pretty much out of things to sell, I filed and I wasnt accurate on my bankruptcy petitions. I kept off about 2000 dollars in items, I was scared I was going to need to sell them at some point for on going legal fees, a coat, some shoes, a bag. Well the 2004 examination nightmare literally was a nightmare all over me not disclosing this 2000 dollars in items and the paper trail catching up with me. So it was all my fault and I feel horrible about it, should always be honest I know. In the moment, I was so scared and desperate I was thinking of just jumping out of the window which in the heat of the moment I told the attorney at the 2004 meeting to just open the window and put me out of my misery.

After that they decided to let me file for a ch13 but wanted me to make substantial payments to show them good faith. Well my salary of 40k they wanted me to pay 2000 a month. I moved back in with family, cut all my expenses and I am drowning. I cant even live, I am paying about 60 percent of my salary to trustee and cant afford to live this way.

I am just stuck in this horrible place and needed to vent. None of my few friends I have told understand what I am going through, they think I should just pay what I can and not stress. I am literally losing my hair over this and no one understands.

Interested to know how they discovered the high ticket items. Guess they went through your credit card purchases from the last six months? That sucks.

[asmith1818]

First and foremost, I need you to BREATHE! I know that's easier to say and harder to do but once your stress level gets to the point you want to be taken out, then it's time to pause and take a step back.

Yes, you are totally right. I have been trying to meditate and work on my breathing. I just get so stressed out lately again, I am having a hard time at work.

Second, you definitely need to have another attorney look over your case. 40K with no other wordly possessions and 100K in debts sounds like the definition of a Chapter 7 means test approval. I get it, my lawyer sucks too. But at least she ran all the numbers to make sure the only option I did have was Chapter 13 (my soon to be ex is a high income earner and his income is included when doing my paperwork).

I have no wordly possessions, a small samsung tv, a 2016 macbook, some furniture, clothes that are not luxurious. Basic stuff
I am afraid to have another attorney look over my case as it had become super complicated and I can't afford to start paying another attorney. I know some attorneys offer a free consultation when you already have an attorney representing. I know I really should have another look by an attorney but like I said, my case was so complicated.

Definitely have someone else give it a look. It's super stressful and I filed maybe a month after you for my Chapter 13. It's definitely been a struggle and my bankruptcy has come with a mandatory wage order so that my payment can be paid out directly from my payroll which is going to suck because I start a new job next week and I don't want an order on my income until I'm done with my 90 day probation at the very least.

I am sorry about your new job being privy to your financial situation

But know you are not alone. We're all or have all been exactly where you are. From the freakouts before the 341, to the anticipation of confirmation to the years that feel like decades until you've completed the entire plan to the agonizing waiting of the Trustee to submit a final report and discharge you. It's a lot, but everyone here understands and are great support!

thank you for listening and giving me your feedback. I really appreciate it, I sometimes forget I am not the only one.
I did email my attorney this afternoon asking for a meeting so I can discuss my options.

[asmith1818]

Interested to know how they discovered the high ticket items. Guess they went through your credit card purchases from the last six months? That sucks.

When I had to go through a 2004 examination, they sent a "rider" which stated they wanted; 2 years of complete bank records, any type of eBay/pay-pal records, venmo records, complete credit card statements from 2 years back.

I had sold some items on sites like posh-mark, the problem was when I filed I was so anxious to get this started and over I did not properly list all my possessions at the time of filing correctly. I did not leave off like loads of items. but I had items for sale on posh-mark, things that sold for 200-300 dollars, some 100-200 things, totaling up to around 200o dollars. The US attorney had pulled the items off my user site because they requested access to all the platforms I sold on and when I listed the items on the bankruptcy petition they were not on there. even though I did send my attorney and updated list after we knew there were some problems before the 2004 examination.

I said this during the 2004, i gave my attorney this information. But because I said the petitions were correct, I was honestly so high strung, burnt out and just said yes these are right without even really looking at the paperwork. Right then and there she rose up from her chair and called me a liar, saying she is going to dismiss this whole case because I perjured myself. My attorney who was there asked for a recess. we came back, did another 2 hours of grilling me even though she said she was going to dismiss the case. then after the last 2 hours of interrogation, her and my attorney spoke which resulted in me getting an offer to convert to a chapter 13 instead of dismissing the entire case.

The stipulation though was I was supposed to make the monthly payment to the highest degree that I could. I was scared and didn't want my case dismissed so I thought ok ill move home cut my expenses and have tried this but I have gotten into more debt and am struggling daily. So even though i tried, I am going to pray my attorney is helpful and let me know if I should convert or try to get a reduced payment.

Thanks for listening. 2004 exams are brutal, but not as bad if you literally know everything about your case and have disclosed everything properly. hope this makes sense.

[justbroke]

I forgot all about the prior conversion and the Rule 2004 Examination. You won't be able to convert "by notice" back to Chapter 7. It will almost definitely require a hearing for your conversion. The original Chapter 7 panel Trustee or the UST could ask about "bad faith" issues that may have been in the case prior to conversion.

I wish your attorney was stronger in the original conversion, but I could be wrong. Normally, a debtor making $3,300/month wouldn't be sending $2,000/month to the Chapter 13 Trustee. This is usually a case where the "best interest of creditor's test" (or the Chapter 7 liquidation test) showed that the creditors would have received $120K over 60 months ($2,000/month) -- or $72K over 36 months -- had you filed a Chapter 7. I just don't see it or I don't want to believe it. (I do see that you capitulated due to the issues found during the Rule 2004 Exam.)

When your attorney and you sit down, you'll have to look at dismissal and refile versus a straight conversion. I think conversion may be a little more problematic, but it's possible. I just don't see how anyone who takes home $2,600/month (after taxes) is giving the Chapter 13 Trustee $2,000/month. It makes me sad and outraged that it was allowed by your attorney and the UST/Trustee. I'm not disgusted with them per se, but annoyed that they allowed that to happen.

Let's see what your attorney says about this situation. It's unlivable and Chapter 13s were never meant to be a punishment.