paystubs, future income, etc

[treehugger1]

I'm attempting to start a thread related to a post by CatchMe. I'm 1 - 7 months out from filing BK13. I have extremely variable income on a three-month basis and if I filed today my disposable income is greatly inflated. I'm attempting to stall and "work" with creditors until I have no choice. I'm in the unique position that even a wage garnishment doesn't faze me. I live in Oregon where even multiple garnishments can't exceed 25% of your pay and multiple garnishments are not cause for termination of employment. I even told one collection company, "Go ahead and garnish my wages. You'll need to get in line, a long line."

Back to the discussion:

I've met with 5 different attorneys for free initial consultations and discoverd about 3 different requirements from legal firms that are not requirements of the law.

The attorney that I am going with only wants my most current 6 months of paystubs when I file, and my last 60 days of bank account information. The trustee will see your tax returns for the first three years of a 13 and any concerns will be based on significant changes. In my district the trustee doesn't follow your paystubs on a monthly basis. Several law firms wanted 6 - 9 months of paystubs and 6 - 9 months of bank statementsl screw them. My chosen attorney explained that some large firms want the bank statements to cover themselves and look for any possible "preferences." My attorney trusts the information I give him, and I have no reason to lie and nothing to hide, so he won't burden me with the work of tracking down statements and paying for them on closed bank accounts. While in my district the trustee may ask for additional information related to pay and bank statements, he is most intrested in the future, not the past.

I was also amazed that I could go into a 13 with several thousand dollars in my checking account after filing, and not have to give this up in my district. So, timing for me can mean the difference of entering into BK with a cushion to help resolve the variable monthly income that I have. I never thought that BK 13 could require a "plan" and solid timing. If one knows they are heading to 13 in the future, there is time to think about the timing of filing (Weird, but true). My attorney did not point me in this direction, bur "advised" me to get online and research some forums and legal pages. I've learned on this board that timing can be helpful for short-term issues when first filing. I learned from filling out "practice" forms from the US trustee site, and I've learned what must be done to stay away from 90 day preference payments. I am also fortunate to be very close to a 100% plan. This makes it much easier to sell my expenses. I feel for folks who are negotiating with less than 80% plans. In my opinion, these should be BK 7. I will probably be able to afford a 100% plan, and will gladly do so, if the law would rethink all the haggling that is occuring under the new law and allow more 13's to become 7's.

In terms of income changes, just keep the trustee informed and know that you are allowed to modify payment plans if your income changes, for better or worse.

[CATCHMEIFYOUCAN]

Comments

By the way, what related post by CMIYC ???

I even told one collection company, "Go ahead and garnish my wages. You'll need to get in line, a long line."
That was funny !

In my district the trustee doesn't follow your paystubs on a monthly basis.
Lucky you! Trustees vary ...

Several law firms wanted 6 - 9 months of paystubs and 6 - 9 months of bank statementsl screw them.
Paystubs I could understand, 6-9 months of bank statements - hmmm, I would think a few would be good enough.

My chosen attorney explained that some large firms want the bank statements to cover themselves and look for any possible "preferences."
You would think they'll find the preferences by your credit card statements!

My attorney trusts the information I give him, and I have no reason to lie and nothing to hide, so he won't burden me with the work of tracking down statements and paying for them on closed bank accounts. While in my district the trustee may ask for additional information related to pay and bank statements, he is most intrested in the future, not the past.
But the past you could be hiding something - eh just kidding !

I was also amazed that I could go into a 13 with several thousand dollars in my checking account after filing, and not have to give this up in my district.
I am amazed! In the state of VA, you are allowed so much money in your savings, so I guess every state/district is different.

BK 13 could require a "plan" and solid timing.
I think anything in life requires a plan, and its all about timing.

This makes it much easier to sell my expenses.
Sell your expenses? I think this odd, as that would be looked upon as some kind of fraud (I guess depending on how you go about it). I would think the Trustee would inquire how much you made off, and that money could go to the creditors - hmmm.

In terms of income changes, just keep the trustee informed and know that you are allowed to modify payment plans if your income changes, for better or worse.
And your lawyer too! Well said!

Catchmeifyouca

[treehugger1]

I hear you CM. I'm guessing my reason for BK is not the norm. Here is the short story.

I went to college late in life, raised daughter as a single father. Borrowed loads of money to finance my daughter and my educations. A few years back I landed a great job and was making more money than I ever thought possible. I made bad stock investments, lost money, kept using my credit cards when needed. Student loans ran out of deferment/forbearance periods, picked up a few payday loans, etc. The money that creditors require on a monthly basis now exceeds my income. Credit card companies keep upping the interest, and are unwilling to work with me. Have judgements coming at me. I still make plenty of money, but am amazed that creditors are not willing to work with me in such a manner that I can afford the minimum necessities of life. When I (and attorney) run through the 13 option, I pay all my creditors in five years (100%) and have more money than I currently have to survive. This still seems strange to me, but as my attorney stated, "13 is designed to protect creditors first, while offering debt relief to debtors." My debt relief is not discharge of debt, but relief from debtors while reorganizing my current debt.

At first, I was concerned that there is no way a trustee would allow Bk for me, but I'm not driving this, my creditors are by not working with my income status. Many of my creditors gain by me filing BK. They get their money (well, the interest goes away) in five years. I guess they figure they make more if I struggle along for 10 - 15 years and heap piles of interest and late charges on. So, I'm not so much as bankrupt as I am in the situtation where I receive relief and creditors will probably get every dime. In terms of "selling" my plan, there is no fraud nor lack of good faith, whatsoever. I didn't make up the rules. Congress and credit lobbies did. For me, BK is a win/win situation. If the trustee thinks I should not be allowed protection under BK, then I'm back to square one and all my creditors will have to get in line with their garnishments and I'll always have 75% of my net paycheck. I could go on like this for years. What is the point of draggng this out for years? My attorney tells me that eventually my creditors will tire of waiting "in line" for their time to pop-up and will seek an involuntary BK from me. The trustee's job is to represent the interest of creditors. Keeping me from BK is certainly not in my creditor's best interest. Maybe I'm wrong, but how can my creditor's best interest be waiting for me to die and hope to lick the final plate?


What is keeping me from filing? My income fluctuates so wildly, that I need to put myself in a realistic setting where my income is based only on my annual contract. All the rest of my income is from non-wages that have no guarantee. The new law requiring 6- months average income is messy for someone like me, or you with two jobs. its crazy. My attorney hopes to argue my employment contractual amount should be given serious consideration. I'm hoping the trustee will use his powers to interpret "projected future income" broadly and not simply look at the six-month rule. On the other hand, my attorney feels quite confident that if the trustee feels the law was meant to literally use the six-month average, then the local trustee will also agree that the means test and IRS and Census standards will be literally applied. This then gives me more "living, housing, and transportation" expense than I have now. There is no "bad faith." There is no fraud.

Stay tuned and I'll keep you informed as this all plays out.

"what a long, strange trip it will be."

[anonymuse]

The attorney that I am going with only wants my most current 6 months of paystubs when I file, and my last 60 days of bank account information. The trustee will see your tax returns for the first three years of a 13 and any concerns will be based on significant changes. In my district the trustee doesn't follow your paystubs on a monthly basis. Several law firms wanted 6 - 9 months of paystubs and 6 - 9 months of bank statementsl screw them. My chosen attorney explained that some large firms want the bank statements to cover themselves and look for any possible "preferences." My attorney trusts the information I give him, and I have no reason to lie and nothing to hide, so he won't burden me with the work of tracking down statements and paying for them on closed bank accounts. While in my district the trustee may ask for additional information related to pay and bank statements, he is most intrested in the future, not the past.

It's not a matter of trust, it's a matter of law. There are higher penalities on attorneys under the new law. If they have you file a Ch 7 when you should be a Ch 13, that's a $2000 fine to them. When they sign the paperwork, they are verifying that they have verified your financial situation under penalty of law. I'd rather have my lawyer act proactively to see my past year in case they see something that might throw up a red flag instead of scampering around when a trustee digs deep and finds something later.

[SinkingFast]

Our attny isn't one of those big Firm lawyers. But he wanted all that stuff on file.

By the time we got done giving them docs, the stack was over 2 feet tall. The paralegal scanned it all into their system to have on file in case.

In case the Trustee asks for something, the attny can hand it over immediately. In case our BK Filing get's audited, the attny is prepared. In case. In case. In case.