5 years of payments?

[brokestress]

My husband and I were going to file bankruptcy. We went to a lawyer and he told us we would be paying about $300 a month for 5 years. I was aware there were new laws but I didn't realize we were going to have to pay. We can't afford that at all right now. He said chapter 7 had even higher payments. At this point we don't know what to do. He lost his job last January, we've exhausted all of our savings and are living on his unemployment and what little money I make from a very small (just beginning) business I started. We are barely making our utilities and food/gas so there is no way we can make a $300 a month payment for 5 years, much less pay any credit card bills right now. We are getting calls all day every day, letters in the mail, and I fear we are close to some lawsuits. I've been reading this forum (just joined) and no one is saying anything about the monthly payments. Just what the lawyer charges. Ours said $3000. He wants $1600 to file and the rest he will add into the payments. Any advice, suggestions?

[NoMoreCards]

I suggest you go talk to at least 2 more BK lawyers.
Most offer free consultations. But Chapter 7 does not typically have payments that I have ever heard of. But my experience is limited. :-) I sure hope not!!

Anyhow, it can't hurt to get more experienced opinions of what your options are.

All the best.

[StartingOver08]

Interview other BK attorney's. Any attorney that told you that there are monthly payments in a Ch 7 is not telling you the right thing.

[aa06a47]

Sounds like a retard lawyer saying your payments may be higher. You cannot submit a plan to a trustee based on your UE benifits, especially since they run out.

Chapter 7 is the only way to go.

Now, after thinking about this, you may have alot of equity or unprotected assets. His thought process is that you might lose more in a chapter 7 filing than a chapter 13. Regardless though, I don't see how a plan accepted as good faith with the income based upon Unemployeement benifits that run out.

Try a few more lawyers.

[rrockinggramma]

so do you have equity in your house? Is that why the attorney said you would have to pay more in a chapter 7?

The rule is: A creditor has to get what he would have gotten, had you filed a chapter 7. In bankruptcy, you are allowed exemptions. When what you have exceeds those exemptions, then you owe the creditors what you cannot exempt. So to me, it sounds like you have house equity and that is why the attorney is steering you in the direction of a chapter 13.

Is that the case? If it is, then you you have to pay your creditors the equity amount that is not exempted, which could equal your 300 a month for 5 years.

If that is NOT the case, run to another attorney cause this one is full of baloney.

[brokestress]

We own our house and car. We do have a boat though. We are now considering chapter 7, so its like starting all over now since we originally inquired about 13. We are seeking another lawyer after seeing people on here tell us we need to and a friend of mine is going chapter 7 and her lawyer said the same thing. We went to our current lawyer to tell him we can't afford chapter 13 and wanted to stop and he said, let's let this go through and see what they say. We KNOW they won't approve a chapter 13 for us, we cannot make the payments, so why keep going? Plus, now I'm nervous of him. soo, we're seeking someone else. this is very stressful. Not sure what we'll lose in a chapter 7, not sure we have any other choice. I'm afraid to be sued. Afraid they'll take our money for years to come. We need our income tax returns to pay property taxes, so can't have them taking that! thanks for all your advise everyone!

[fooked]

PLEASE interview about 3 more attorneys.... find one that makes you feel comfortable... it sounds like you were given bad information from the first one.

[HHM]

Generally, when a lawyer says a chapter 7 would be more expensive, that means there is probably non-exempt assets in the case.

No offense to the OP, but I have a feeling we are hearing a "filtered" version of what the lawyer said...and that is not meant as an insult, its just that you are not familar with BK, so something the lawyer says related to BK is often "interpreted" in a way that once it makes it to this forum, doesn't make sense.

Should you see another attorney, sure. But I'd be willing to bet the advice comes back close to the same.

[maddog2112]

Dear Brokestress, Is your house owned free and clear? If you have alot of equity in the house, or a very expensive boat and alot of money in the bank maybe thats what your lawyer is talking about. To be in a 13, you have to have money left over at the end of the month after all necessary bills and expenses are paid to make a payment for the 13. If there`s nothing left over after expenses, you can`t afford a 13. A simple ch7 should cost around 1200- 1500 dollars . It doesn`t sound like you all have a lot of money right now with your husband being unemployed. You may have to wait 6 months to show a 6 month snapshot of your new income. People on this forum can help you alot, but you have to be very specific with the details of your situation to get this most out of it. I wish I had known about this site before I filed. Like my new lawyer says, it pays to do a little bk planning before taking the plunge. Hope this helps.

[andy158]

Took me and wife three lawyers to land a good one. Shop around. Most inital consults are free. As for monthly payments these only occur in a chapter 13 not a 7. The payments are based on your DMI (disposable monthly income after all your living expenses are met). Like the other posters said if you have no great equity in the assets you want to keep, chapter 7 is the way to go. They can't count unemployment benefits as stable income. Chapter 13 is geared for most people with secure jobs and regular income. I had to surrender a boat and motorcycle. If you are broke, getting the up front lawyer fees are tough. Relatives helped us out. If your boat is free and clear, sell it for your lawyer fees. Sounds like you situation will get worse befor getting better. Don't procrastinate. I should have filed two years ago and just kept struggling month to month.

[banca rotta]

Besides seeing one or more lawyers you should get (or borrow) books, updated of course reflecting the 2005 changes and read this forum even if you have to spend a lot of time doing this.

It sounds like you are an extreme newbie and you must understand the entire bk process inside and out.

I wouldn't go into bankruptcy blind no matter who your lawyer is.