Convert to a 7 or Dismiss and Refile???
Well, the new attorney we met with said our current means test shows we do qualify for a 7. So we have two options: convert or dismiss and refile.
If we convert, we need to have the new attorney file something with the court stating he will now be representing us. We also can not pay him directly, since he can not accept money from a bankruptcy estate, and he would still charge the full $2k fee for handling a chapter 7. Additionally, he said we could come under close scrutiny and face arguments from the US Trustee regarding the accuracy of our first means test.
If we dismiss and refile, we start from scratch. New means test, new schedules. I questioned whether we have to wait 180 days though to do it that way and he said no. This seems to be accurate with what I have read:
We could pay him directly in this scenario, and our case may still come under scrutiny but it's far less of a risk. I imagine, from an attorney's POV he would rather be dealing with our case from the start as opposed to dealing with another attorney's mucked up case that we are converting.
Now, he also discussed our vehicle and asked why on Earth we are keeping a vehicle with $30K of debt that's worth at most $15K. I explained the cram down was never done. He said our 3 options are to give it up, reaffirm the debt, or file for redemption. Since we don't have money to pay upfront for redemption, and having a relative pay it off and then have to pay the relative is the equivalent of robbing Peter to pay Paul, I think we are prepared to give up the vehicle. He also said as our attorney if we did reaffirm he would be telling the court he thinks it is in our best interest to do so, and he can't honestly say that. I have no idea how the timing of relinquishing the vehicle works out- at what point does the repo man will come to take the vehicle. Obviously, the longer the wait, the better for me because that gives me more time to come up with $ for a second vehicle.
So he advised us to talk about, decide what we want to do, and call him before we pull any trigger with our current attorney. The other good news was that he said all we should be left with after the discharge is our priority debt: 28k federal tax, 1500 state tax, and our student loans. The unsecured and the "secured" IRS tax will go away he says.
Now, I need to call him back because our concern is:
#1- we have a chapter 13 payment due Monday. I do not want our case automatically dismissed for non-payment since we've already had a motion to dismiss for non-payment and we are in a plan to cure that. However, if I have to keep paying the plan payment, I can't very well pay him to refile.
#2- the vehicle issue and the timing of the repo.
#3- the timing of a chapter 7 discharge. DH is likely going to get a bonus in June. We were planning on having that to pay for moving expenses since we are looking for a cheaper rent and our lease is up in September. But would that automatically be taken from us?
The light at the end of the tunnel is getting a little brighter...
If we convert, we need to have the new attorney file something with the court stating he will now be representing us. We also can not pay him directly, since he can not accept money from a bankruptcy estate, and he would still charge the full $2k fee for handling a chapter 7. Additionally, he said we could come under close scrutiny and face arguments from the US Trustee regarding the accuracy of our first means test.
If we dismiss and refile, we start from scratch. New means test, new schedules. I questioned whether we have to wait 180 days though to do it that way and he said no. This seems to be accurate with what I have read:
An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
Now, he also discussed our vehicle and asked why on Earth we are keeping a vehicle with $30K of debt that's worth at most $15K. I explained the cram down was never done. He said our 3 options are to give it up, reaffirm the debt, or file for redemption. Since we don't have money to pay upfront for redemption, and having a relative pay it off and then have to pay the relative is the equivalent of robbing Peter to pay Paul, I think we are prepared to give up the vehicle. He also said as our attorney if we did reaffirm he would be telling the court he thinks it is in our best interest to do so, and he can't honestly say that. I have no idea how the timing of relinquishing the vehicle works out- at what point does the repo man will come to take the vehicle. Obviously, the longer the wait, the better for me because that gives me more time to come up with $ for a second vehicle.
So he advised us to talk about, decide what we want to do, and call him before we pull any trigger with our current attorney. The other good news was that he said all we should be left with after the discharge is our priority debt: 28k federal tax, 1500 state tax, and our student loans. The unsecured and the "secured" IRS tax will go away he says.
Now, I need to call him back because our concern is:
#1- we have a chapter 13 payment due Monday. I do not want our case automatically dismissed for non-payment since we've already had a motion to dismiss for non-payment and we are in a plan to cure that. However, if I have to keep paying the plan payment, I can't very well pay him to refile.
#2- the vehicle issue and the timing of the repo.
#3- the timing of a chapter 7 discharge. DH is likely going to get a bonus in June. We were planning on having that to pay for moving expenses since we are looking for a cheaper rent and our lease is up in September. But would that automatically be taken from us?
The light at the end of the tunnel is getting a little brighter...