Met w/2nd attorney... Confused ???

[klandsb]

I met with a 2nd attorney today... Didnt really like him from the start.. I am currently making a decent wage ( for about 1 1/2 yrs) but not enough to pay off all my cc dept that got racked up after my divorce in 2000 .. around $32,000... house , heloc, car pmt have all been paid on time ... I got this feeling from him like you got yourself into this and you can get yourself out.. He had zero personality and more or less was like this is how much you make, you are not eligible for chapter 7 and your means test you did online means nothing.. In chapter 13 you are probally going to have a high pmt amount. He wanted me to like sign on today with him...when I told him I had to think about it (not) he got really upset.. I had made the appt after getting a judment letter delivered by a sheriff...The attorney I met with last night said no big deal about the judement and gave me a response to take to the prothonotary at the courthouse outlining my response... Didnt charge me or anything... This guy today was like there is nothing I can do , you owe the money right ??????? Now you know why I didnt like him...
Anyway, the few questions I have are as follows:
ARE 401K LOANS CONSIDERED A PMT EVERY MTH ????
lawyer 1 told me yes..
lawyer 2 told me no and that they will feeze them until chapter 13 complete than i will begin paying on them again ??
I HAVE A CREDIT CARD W/CREDIT UNION AT WORK ???
lawyer 2 said the credit union w/probally cease any business w/me from now on.... I have my car pmt directly taken from my pay from them ??

MY 20 YR OLD SON LIVES WITH ME MAKING MIN WAGE AND PAYS NOTHING TOWARD LIVING EXPENSES
lawyer 1 said 2 as household size.
lawyer 2 said unless he is dependant on me 1 in household unless I add his income to my income for total income for the mth ???
Thanks for any feedback.... I would never hire that guy for anything....

[justbroke]

ARE 401K LOANS CONSIDERED A PMT EVERY MTH ????
lawyer 1 told me yes..
lawyer 2 told me no and that they will feeze them until chapter 13 complete than i will begin paying on them again ??

Lawyer 2 seems wrong on 401(k) loans. It is quite clear that in 2005, Congress made any continuing contributions to a 401(k)... not part of your disposable income. So long as it's generally at your company match level, and is below the maximum allowable by the IRS (around $14K/year), it's absolutely allowed as an allowable expense.

I HAVE A CREDIT CARD W/CREDIT UNION AT WORK ???
lawyer 2 said the credit union w/probally cease any business w/me from now on.... I have my car pmt directly taken from my pay from them ??

Yes, they will probably cease business as your account must be listed on your Petition. You do need to proceed cautiously with Credit Unions due to their general organization (it's owned by the members), rules, and this little known phenomenon known as cross-collateralization.

MY 20 YR OLD SON LIVES WITH ME MAKING MIN WAGE AND PAYS NOTHING TOWARD LIVING EXPENSES
lawyer 1 said 2 as household size.
lawyer 2 said unless he is dependant on me 1 in household unless I add his income to my income for total income for the mth ???

Do you claim your son as a dependent on your Taxes? I'm thinking not.

So, for the portion of the Means Test that deals with the median income (the first part of the means test), you're a household of 2.

For everything else, you're a household of 1, since he is not your dependent. Understand?

Regardless of which lawyer you use, make sure you're not qualifying purely because you have a household size of 2. Many times the Trustee may look at your tax returns and then ask why you aren't claiming the other person(s) if they are your dependent. Make sense?

I still don't like Attorney 2 because he either oversimplified it, or you are only recalling part of his statement. He's right that his income counts... so long as he contributes to any bills that are yours. It does get dicey when it comes to people who you use for your household number, but they work and you don't claim them (on taxes) as a dependent.

Overall, you need to keep shopping for lawyers. Don't be surprised, however, if your Chapter 13 payment is "high". This varies by individual, but maybe you don't have many "allowable" expenses, are above median income, and make a lot of money.

[klandsb]

thanks

well at min wage for 32 hrs wk it will send my income up some...I guess I would use household size 1 then or am I stil confused ??
He was on my income tax for 2008 (graduated HS june 2008) but wont be for 2009...
Do you think the Credit Union would want to take my car then if I have the loan with them or I could continue to pay them for it but not out of my paycheck if they cease business w/me ??

Even if I got 100% for 32,000 my pmts would be around lets say $520a mth for 5 yrs is 30,000 its better than the $800 plus I would pay if I paid min payments and never get paid off ???

[klandsb]

P.S. the credit card I hve with my credit union balance is 2300....w/pmts of 59 a mth can u hold anything out of the chapter 13 and just continue to pay it...I could pay it off sooner if I did get a tax refund or something ??

[justbroke]

well at min wage for 32 hrs wk it will send my income up some...I guess I would use household size 1 then or am I stil confused ??

Are you over the median income or something? You really need a good consult on whether you can claim him. Since you say he's on your return for last year, he was certainly a dependent. He may still be a dependent as you provide shelter for him. I'm assuming you feed him too?

He was on my income tax for 2008 (graduated HS june 2008) but wont be for 2009...

Excellent...

Do you think the Credit Union would want to take my car then if I have the loan with them or I could continue to pay them for it but not out of my paycheck if they cease business w/me ??

You, or your Attorney, will need to check with them to see if your loan is Cross-Collaterized. Credit Unions (CU) are known for taking all loans (credit cards, home, cars) and lumping them together, making them collateral for one another. You'd need to get that cross-collaterization removed. You'd also need to reaffirm the car. You need to talk to your lawyer because reaffirming may not be in your best interest.

[klandsb]

Yes I am over median income... I have been working like a dog with OT to try and stay afloat which now means I am over the median ...go figure !!

[poorold]

planning your bankruptcy and beyond is key.

if your overtime is voluntary, then maybe you don't have to work like a dog to 1) stay afloat and 2) force yourself into a chapter 13.

for instance, if you worked a straight 40 hours and would qualify for chapter 7, then perhaps waiting 6 months till filing makes sense. the six months at straight time may put you below the median.

to survive in the meantime, people in general realize that paying those credit card payments doesn't make much sense if they are going to declare bankruptcy soon.

find a good attorney willing to review your situation and help with your planning.

[rrockinggramma]

I will offer my 2 cents here about the credit union.

You need to move your car loan to another lender asap. If you file on the credit union with a cc and a car loan, they will put you through the ringer because of cross collateralization clause. They will freeze everything and not service your accounts in any way.

If you can't refinance the car, then definitely refinance the FMV with a 722 and discharge the difference (chapter 7) or refinance FMV with 722 and let the credit union file a claim for unsecured amount in your chapter 13.(if that is what you file)

and good luck with your son. I obviously am not an attorney etc but I would think household of 1 with 1 dependent since you are supporting him and sounds like will be for a while.