Can this be anymore confusing

[jenbow]

Ok.. so I called another attorney cause I think I am not getting the right info.. my attorney told me I do not qualify for chapter 13 since my unsecured debt exceeds $336,000. However, she told me I qualify for a chapter 7 even though I make $80,000 per year due to my exemptions..

I called a 2nd lawyer and she told me the total oppisite. Since some of my debt ($500,000 unsecured) is business debt, the $336,000 does not apply. And that there is no way possible that I qualify for chpater 7 regardless of my exemptions

Anyone have experience with this?

[justbroke]

Unless your "business" debt is a separate entity (Corporation or other organization and you don't have personal liability), the second attorney is wrong.

11 USC 109(e) is what controls the debt limits. It speaks of "individuals" only and not that the limit is only for "consumer" debt. In 109(e) it reads... "an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than... $360,525" may be a debtor under Chapter 13.

Also, the second attorney is wrong as far as business debt goes as well. If you are a non-consumer case -- more than 50% in business debt -- you can file Chapter 7 even in cases where you have positive disposable income! It's more difficult for the United States Trustee (UST) to challenge a Chapter 7 non-consumer case because the Means Test does not apply!

I'd run from both attorneys and check out at least 5 more.

Also, this $500K number is not matching with your prior posts.

[jenbow]

Thank you for your post.. I have several more appointments this week with other attorneys.

Not sure what numbers I have posted in the past as I cannot tell you how confusing this all is and what is meant by secured, unsecured, business, personally.. every day reveals more information. Here are my totals as I best understand.. the business debt can change as I have no idea what our total tax liability is as we are in the beginning stages.

Total Debt $855,000.00

Personal $471, 000
Business $384, 000


Unsecured $583,000.00
Secured $272,000.00

This includes my house, student loans, payroll taxes, sales taxes with penalty and interest... which I know are all not dischargeable .

The biggest questions I have is what chapter I am qualified for.. chapter 7 or 13. I hope I am not forced into a 11 as this seems the most expensive and challenging.

Also, we just have been audited by the IRS and need to have an attorney help us.. so how important is it that I get one attorney to help with taxes and bk or should I hire two separate ones? I am having a hard time finding one attorney that can do both..



Thank you for helping as I figure all this mess out.

[justbroke]

With what you posted, it's Chapter 7 or Chapter 11. You are a consumer debtor since your consumer debt (55%) exceeds your non-consumer debt (45%).

Look at your student loan because that may help if the money is readily itemized down to tuition, books, fees, and housing/living. If it's tuition, books and fees, the general feeling may be that it is a non-consumer debt. Especially in California where it was addressed.

See the thread here although there isn't much on there.

http://www.bkforum.com/showthread.php?t=57332

[jenbow]

thanks justbroke.. I finally experienced relief last night as I found a new attorney.. he works with both tax and bk and seems so knowleable.. he suggests chapter 7 and my husband closing his business down and perhaps starting a new one down the road. thank you all for your advise. its been so helpful and I get through the quicksand

[justbroke]

I am happy to help out. I get really frustrated when bankruptcy attorneys are telling their client incorrect or not totally accurate information. To this day, I'm sure that there are people who went through a Chapter 13 that never needed to. Myself included, but at least I bailed out after almost 2 years in!

[ColoradoBell]

I've certainly had my problems with hearing contrary things from one BK attorney to the next. Most of them were very compassionate though and I'm impressed that most often first meetings are free. (Regular attorneys charge a lot for that first meeting and then say no, I can't help or I need more money to 'review' your case...I spent $3500 to meet with an RE attorney about saving my house. At the end of the meeting he said 'file BK' and then kept the entire $3500)

But I digress!

I wanted to tell you what I heard from an attorney about two months ago. He listened to what I said I 'd like to do (save my homestead exemption if the house sells and if at all possible take over paying the debt on the house (X pays and I reimburse him) buy out X's share and strart paying unsecureds).
After I said my spiel he told me that I didn't have a bk case...that just because I was upset that the divorce settlement wasn't to my liking (????) that since my X offered me to 'exchange' my share of our retirement ($900,000) for his share of the house ($212,000) that I should have done that.
WTF? Maybe that was the attorney that my X called about BK when I told him I was going to file......but it sure messed with my mind for some precious weeks as the sale date crept ever closer.