C13 Doubts/Concerns

[heavenlybet]

Hello Everyone,

My husband and I just returned from our free consult with a bankruptcy lawyer. In summary we owe $120K in CC and loans, a first mortgage of $365K and a second of $100K (interest only!!).

We were told we had to file C13 because of our income. It included paying down our debt for 5 years with a monthly amount predetermined by the court (after we pay $600 we will know what that amount is!).

Pros I saw, I can include the interest only second mortgage and NOT lose my house - because our house is worth less than the 1st mortgage.

Cons - Not having credit for 12 years - 7 years on record after the end of the 5 year payment cycle. This is my husbands con, I prefer money in the bank and peace.

MY BIGGEST concern... and this is where I hope some of you can help me. Will we be left without ANY money once the courts decide what our payment is for 5 years? Not that we are looking to have an extra couple grand a month but I would like to start SAVING some money, and I am scared that I won't have a penny to our name.

Needless to say, we are scared that if we do this we will ruin our lives and we are scared if we don't we will....

Can some of you share the pros and cons you all have experienced and also tell me whether you were left eating beans after all is said and done?

Thank you all.....

[qwertysue]

Do yourself a favor and schedule another free consult or two. This is your financial future, so please, please, please do due diligence in selecting an attorney. Also, read as much as you can on the stickied posts.

You should be able to do the I & J forms to come up with some preliminary numbers.

While the meeting is still fresh in your mind--write out detailed notes from what was said this morning.

.

[heavenlybet]

thanks qertysue! I&J forms? Know where I can obtain those? Sorry I just joined the forum and am really new to all of this!

I am here to learn, learn, learn!

[qwertysue]

Sure, let me grab the links.

Seriously...take the time to do some major reading! Keep a notebook handy to jot down any questions or thoughts--it can get quite overwhelming, so it's nice to have someplace to keep track of all this info!

[heavenlybet]

I understand thanks.

[qwertysue]

http://www.bkforum.com/showthread.php?t=11356 posts 16 and 20 in this thread.

Also, as you start wandering around, keep in mind that everyone's situation is different. What might be true in one district/state might not be applicable to your district.

What state are you in and how many in your family? Did the attorney this morning ask you for any financial information or ask any budget type questions?

[heavenlybet]

Thanks!

We are in Florida and there are 6 in our family. The attorney basically asked our income for the past 6 months, which led to C13. We were basically told that there were standards for the basics, electric, water, gas, etc. So if I actually pay $400 in electric and the median for a family our size is $300 I am in trouble! Makes no sense... we are definitely going for other consults.

[qwertysue]

True, there are standards, but there's also local practices and standards. If you have time, make as many consultations as you can!

A good attorney can make wiggle room for you in your budget.

Here is a great link for expenses: http://www.usdoj.gov/ust/eo/bapcpa/2...anstesting.htm

[dragonnfly]

Please listen to everyone when they say to get several consults. I live a hour away from the major town near us. I went to the closest BK attorney I could find because he was close. I jumped through all his hoops and thought I was fine with him filing a ch13 ( i felt we qualified for a 7, but was assured by them we would not) Paid some of the retainer for them to do the paperwork. We have a lot of issues because of my hubbys job pays some per diem. I figured I was in trouble when the secretary (not paralegal)was calling me and asking me where the per diem was to go on the means test. Because of my previous conversations with her she knew I had learned a lot (from this forum) and I guess she thought it wouldn't freak me out to ask me. It did. We ran. I "interviewed" another attorney I found through PACER. She was real knowledgeable and felt we could try for a over the median 7. I left her all my paperwork she said she couldn't get to it the following week but would give me a call the week after and let me know if a 7 was possible. I called Thrusday of the week she was to get it done. She was on vacation, not to return until the following Mon. I had a truck that was 2 months and 3 weeks behind. I needed someone to figure this out. I called our 3rd attorney also found through PACER. Got me in the next evening which was a Thrusday night. Got me scheduled with the paralegal for the following Tuesday and we filed ch 7 that day. I "interviewed" my 3 attorneys, not quite the way you should, mine was more fate. But luckly the first two screwed up before I paid them in full and filed. The second one never did call me!! The last one even thought he didn't have as high numbers on PACER as the second attorney was much more knowledgable. Told me right in the first meeting he would definitly file 7. I just had to tell all this to someone, or I mean everyone. Thanks for reading. Dragonnfly

[heavenlybet]

WOW... thanks guys... we were flat out told we couldn't file 7 because we would lose our house AND we made too much money. My hubby is searching for more lawyers for us to consult with. AGAIN... thanks for the advice!

[lrprn]

Cons - Not having credit for 12 years - 7 years on record after the end of the 5 year payment cycle. This is my husbands con, I prefer money in the bank and peace.

Here's one con that I can correct. A successfully completed Ch 13 stays on your credit record for seven years from the date of filing - in other words, two years after your five year plan finishes.

Since most filers have an excellent on-time record of secured and utility payments for five years, it's not unusual to get fairly good terms from lenders straight out of Ch 13. Ch 7 filers are getting those same fairly good terms two years after discharge. The "your credit is ruined forever if you file" story is just a scare tactic put out by greedy lenders to keep you paying them beyond all reason.

Don't believe all the myths about bankruptcy you hear - a lot of misinformation and exaggerations are floating around out there. Ask each of the lawyers you interview to find out the truth plus get a good sense of what your best options are going to be for your unique financial situation. Plus since many of us are living what you fear, we're a pretty reliable source of information about what to expect as well

Keep posting questions here - we'll help you sort things out as best we can.

[poor@budgeting]

'My husband and I just returned from our free consult with a bankruptcy lawyer. In summary we owe $120K in CC and loans, a first mortgage of $365K and a second of $100K (interest only!!).' .......
'MY BIGGEST concern... and this is where I hope some of you can help me. Will we be left without ANY money once the courts decide what our payment is for 5 years? Not that we are looking to have an extra couple grand a month but I would like to start SAVING some money, and I am scared that I won't have a penny to our name.'

I would suspect that at the moment you can't afford all your payments/expenses without adding more and more to your current CC balance. Chances of getting out of that huge hole is slim without BK unless you can re-negotiate with the CC for buyout.

Look at employer 401k/403(b) for savings - they are exempt from BK(at least, that is what I understood it to be).

[heavenlybet]

Thank lrprn,

I even asked the lawyer (she seemed more of a paralegal than a lawyer actually - but she was a lawyer) specifically twice, 7 years on record AFTER the completion of the 5 years? She said yes... I am soooo glad I found this forum. I told my husband when we left the consult yesterday that I was going on the computer to find a forum like this because I knew that there were others out there living this and could offer some real advice.

I know that all states have different rules but the standards are what they are.

Is there a list of common questions out there for people in my phase - the beginning! I have questions written already but I know I am forgetting a lot of important things. This is so nerve racking...

Thanks again everyone!

[krielly]

I guess to me, if I were in your shoes, and could potentially cram down your mortgage, essentially wiping out the $100,000 second, and the possibility of discharging at least a percentage of your cc debt, 5 years would seem like a small price to pay considering how much better off you will be financially at the end of your 13.
Just my observation

[whoops08]

How Do You Find An Attorney On Pacer?

Please listen to everyone when they say to get several consults. I live a hour away from the major town near us. I went to the closest BK attorney I could find because he was close. I jumped through all his hoops and thought I was fine with him filing a ch13 ( i felt we qualified for a 7, but was assured by them we would not) Paid some of the retainer for them to do the paperwork. We have a lot of issues because of my hubbys job pays some per diem. I figured I was in trouble when the secretary (not paralegal)was calling me and asking me where the per diem was to go on the means test. Because of my previous conversations with her she knew I had learned a lot (from this forum) and I guess she thought it wouldn't freak me out to ask me. It did. We ran. I "interviewed" another attorney I found through PACER. She was real knowledgeable and felt we could try for a over the median 7. I left her all my paperwork she said she couldn't get to it the following week but would give me a call the week after and let me know if a 7 was possible. I called Thrusday of the week she was to get it done. She was on vacation, not to return until the following Mon. I had a truck that was 2 months and 3 weeks behind. I needed someone to figure this out. I called our 3rd attorney also found through PACER. Got me in the next evening which was a Thrusday night. Got me scheduled with the paralegal for the following Tuesday and we filed ch 7 that day. I "interviewed" my 3 attorneys, not quite the way you should, mine was more fate. But luckly the first two screwed up before I paid them in full and filed. The second one never did call me!! The last one even thought he didn't have as high numbers on PACER as the second attorney was much more knowledgable. Told me right in the first meeting he would definitly file 7. I just had to tell all this to someone, or I mean everyone. Thanks for reading. Dragonnfly

Hello.
Can you tell me how to find an attorney on PACER?

Thank you.