What a mess...lots of questions

[upsidedownbad]

I filed Chapter 7 September 01 and not eligible to file 7 yet. I talked to my attorney briefly and she said I would have to file a Chapter 13. I have 2 cars with liens, house, second mortgage, credit cards, and loans at about $120,000 in debt. I only want to keep one car and let the other car and house go. I am (recently) single with one child and gross $35,000 a year with a two person incurred debt all in my name only. As my debt grew, I was more dependent on credit cards (no fraud intended) and the credit card balances have increased in the last few months because of it. Will the trustee think I am committing fraud?

My atty had mentioned that my median income I may not have to repay the debt? I file 13 and get a "type" 7 discharge?

Will I be left enough to survive on?

How are Chapter 13 payments figured with me surrendering most of the secured debt?

Would I be looking at a 3 or 5 year payment?

[justbroke]

I filed Chapter 7 September 01 and not eligible to file 7 yet. I talked to my attorney briefly and she said I would have to file a Chapter 13. I have 2 cars with liens, house, second mortgage, credit cards, and loans at about $120,000 in debt. I only want to keep one car and let the other car and house go. I am (recently) single with one child and gross $35,000 a year with a two person incurred debt all in my name only. As my debt grew, I was more dependent on credit cards (no fraud intended) and the credit card balances have increased in the last few months because of it. Will the trustee think I am committing fraud?

This is normal. Many people live off credit cards in the last days. That's when you should realize you're in trouble. I didn't realize it for some time, as I ate through $100K of $150K in credit card limits. Not realizing I was using credit cards to pay for daily living expenses!

My atty had mentioned that my median income I may not have to repay the debt? I file 13 and get a "type" 7 discharge?

I don't understand this at all. If you're in a Chapter 13, you could be in it for 36 to 60 months. The discharge in a Chapter 13 is actually better (can discharge more things). I believe your lawyer was contemplating that you would not have to pay back your unsecured debt (pay at 0%) over the term of your Chapter 13 Plan. That would make it "like" a Chapter 7, but your time between filing and discharge will be much much longer!

Will I be left enough to survive on?

You're single with a child? If so, you may be surprised at how much they will limit your "living" expenses as they are all based on National Standards (using IRS and Census data).

How are Chapter 13 payments figured with me surrendering most of the secured debt?

It's all based on your Current Monthly Income (CMI) and your Disposable Monthly Income (DMI). Your CMI is basically the average of the last 6 months of income (everything you take in). Then you subtract expenses that are allowed by the National Standards. What's left, is your DMI. You will have to commit all of your DMI to your Chapter 13 Plan! Note that the "standards" are based on where you live. If you live in NYC, they will be generous -- well, maybe not enough to live in Manhattan. If you're in Podunk... then they will be shockingly LOW.

And since you're surrendering lots of secured debt... you will actually commit MORE money to your unsecured creditors. This will all vary based on how your lawyer works your Plan. Sounds like you are likely BELOW median income and you'll be able to avoid the "national standards" somewhat. You'll be able to use actual expenses... to the extent that they are not extravagant. (Some Trustees believe digital cable is extravagant.)

Would I be looking at a 3 or 5 year payment?

Depends on whether you are above or below median income. I couldn't determine that from your post.

[upsidedownbad]

Thanks for your quick response. How would I find the standards for KY?

[justbroke]

Thanks for your quick response. How would I find the standards for KY?

Look under Section for "Local Standards". You'll look up things by State and County.

Means Testing - U.S. Trustee http://www.usdoj.gov/ust/eo/bapcpa/2...anstesting.htm