Is my attorney right or wrong? Legal advice PLEASE! -- justbroke please be around :)

[FishersMike]

Okay part of my problem is listed on another thread at:

http://www.bkforum.com/showthread.php?64553-Great-News-%28and-then-not-such-great-news%29

Basically to sum everything up the attorney screwed up on my 22C form. They used wrong rental allowance, did not include contributions to household, and right now have a NEGATIVE DMI of $210.00 -- but I have about $650.00 in secured items that needs to be paid. Here is the email I received this morning, what do you think my response should be?

Mike,


I have reviewed the means test calculation and you are correct that the Marion county numbers were used. Adjusting for the changes in deductions and the additional household contributions, the result is nearly a wash.


Your disposable income is negative or less than $10 per month. Your current plan payment funds at least that much to general unsecured creditors, so there will be no net change to the plan based on this.


The Trustee will run the numbers and object if they believe that the changes would be material. I do not expect them to do so since any changes would not affect the treatment of creditors in any way. So an amendment at this point is premature.


I will look into the creditor statements you provided once again to verify if any creditors need to be added. If the information was provided and they were missed due to an oversight on our part, there will not be any charge to you to add them.


Please sit tight and be patient with the process. There is nothing further for you to do other than to make the plan payments and attend the 341 meeting. I appreciate your interest in your case, but you have hired an attorney to handle this case for you so there is no need for you to follow up on each step daily. If we need any information or documents from you, we will contact you as needed.


Here is the email I sent last evening that this is a response to:


Hello,

I did logon to PACER and noticed my Chapter 13 was filed today. This is great news.

However we have some major issues. Here they are:

1) Some of the creditors I mentioned with Attorney that were not included on the paperwork from Chicago still did not make it. Off memory only, I am thinking of AT&T and HSN. I am sure there is others. This is not my fault and I do not want to pay for an amended filing of creditors.

2) The Schedule 22C Means Test is not accurate at all. I had brought in a completed draft and apparently this was not touched. It right now shows DMI as -211.20 -- However - the calculations are wrong. I am willing to send an updated one as I want filed but need it to be done. First off you guys are using the Housing Rent Allowance of $745.00 off of Marion County. I live in Fishers, Hamilton County and the Rent Allowance is $1149.00 -- quite a big difference. Also the housing/utility allowance for Hamilton County is $360.00 instead of $328.00 - not too significant.

3) On the Schedule 22C we did not list contribution income to household -- even though I have $600.00 from roommate which is included on the Schedule I.

So if just these adjustments were changed it would show that I would have positive DMI of $824.80. This is also not accurate.

I have attached a updated accurate B22C and I would like this to be amended and filed to replace the inaccurate one that was sent in error. I want these exact figures used line per line - they are accurate, not guessed, and in the proper categories.

Please have this confirmed this will be dealt with. I will further need to review Scheduled I & J Later.... but the end number on J seemed to be near my end number for the 22C.

Thank you!


*** I believe he is WRONG as it should not be objected to by Trustee, as if they notice the income was not included I would have LOTS of DMI left over, it would be hard to at that time explain all the discrepancies --- I think his response is B.S. and it should be fixed -- am I wrong? What does everyone think? I want to write back a harsher letter demanding it get fixed properly -- can I file the amended 22C myself with the court even though I am represented? Please HELP I am so worried right now you just do not understand ***

[HHM]

First, what are you trying to accomplish with your chapter 13. Why do you NEED DMI.

Keep in mind, having as little DMI as possible on B22C is a good thing. B22C is used to determine how much goes to class 4, unsecured creditors. B22C can be a real problem when you have positive DMI on B22C but you need to pay secured creditors, arrears, and/or priority claims. The amount show on B22C must go to Class 4, so you need to fund additional amounts on top of the B22C DMI to pay those claims.

You SHOULD NOT amend B22C on your own. You will cause more problems than you solve. It sounds like your attorney lacks a certain attention to detail, but nothing you have pointed out cannot be fixed or is terribly detrimental.

[FishersMike]

I was under the impression that you cannot have negative DMI if you need to fund secured items (like my Jeep) and my priority taxes. These items I need to have $650.00 -- but if I have negative DMI they can come back and say that you cannot afford your Jeep etc.

The other thing is he left out $600.00 a month on contributions to household (LINE 7) so this would make it have too much DMI -- but the expenses are not accurate. If corrected it would be $9.00 DMI after paying my $650.00 plan payment to cover secured and priority. These items need to be paid and if accurate figures were used I would basically be paying essentially nothing to unsecured.

But I do not think going in to 341 with this completely inaccurate statement of negative DMI would be wise --- I am most certain the Trustee will catch the $600.00 roommate income not being included as it is included on Schedule I -- so I do not want them fixing it without having all the accurate figures because like I said would make it go from negative DMI to a few hundred dollars positive DMI which I really do not want.

[HHM]

If you have priority claims, ideally you want 0 or very little DMI on B22C. Where you show that you can afford the priority claims is on Schedule I & J.

It sounds like there needs to be some adjustments anyway (fix the allowed rent, etc), but I think your lawyer is doing you a favor by showing negative DMI on B22C and waiting for objections, so long as he shows a sufficient amount on I&J to fund the priority claims.

I think conceptually, what you are missing, is that B22 is only for the benefit of general unsecured creditors. (which is why you get to deduct secured claims as an expense, and you can even take priority claims and stick them on B22 as an expense, if you needed too; i.e. to get into chapter 7).

[MSbklawyer]

I was under the impression that you cannot have negative DMI if you need to fund secured items (like my Jeep) and my priority taxes. These items I need to have $650.00 -- but if I have negative DMI they can come back and say that you cannot afford your Jeep etc.

No, that's not the case. What matters, for purposes of your ability to keep installment payments in a chapter 13, is your ability to fund the plan according to an I minus J calculation. The means test is an artificial calculation. For instance, people whose sole source of income is Social Security always have negative DMI on the means test, because social security doesn't count as Current Monthly Income -- the basis for the calculation of DMI.


Looks like HHM upstaged me once again. I gotta learn to type faster.

[FishersMike]

So nothing needs to be done with this 22C?

No amending? I guess I cannot understand why even do the form if it is not really needed since so incorrect.

[HHM]

So nothing needs to be done with this 22C?

No amending? I guess I cannot understand why even do the form if it is not really needed since so incorrect.

LOL...write your congressman and senator.

The form should still be accurate, but because it is artificial, accuracy is a somewhat flexible definition. I would certainly change the rental allowance and if creditors were left off, they should be added. But as for the rest, wait and let the trustee object.

[FishersMike]

Here is my email response to the attorney:

Hi Jay,

Thank you for replying back to my email so quickly. I do not know how you calculate it is a wash by simply changing the 22C there was other expenses that were not recorded accurately. You may think amending this mistake is premature - however to me it is not. It should have been done accurately the first time. I provided the correct figures and we updated the Schedules I & J in real-time on the 1st. I brought in the correct figures for the 22C also on November 1st. I work in insurance and do not like my signature being placed with this " I declare under penalty of perjury that the information provided in this statement is true and correct. (If this is a joint case, both debtors must sign.)". I know that the information is not true and correct and it should have been noticed in the beginning. I learned one thing from this experience - do not pre-sign any documents (even to an attorney) without final review. I do not want Trustee to have to object as I have the information correct and it needs to be filed that way.

I would appreciate the creditor matrix being corrected as I have sent all the forms originally to you guys and was forwarded to Chicago for data-entry. It was missed. I brought information in with my appointment and was assured it would be taken care of. Like I said I am sure more than just the AT&T and HSN were missed, but you have all the paperwork I believe so it would be very time consuming for me to locate.

I am extremely patient - but I am not a hands off individual. You should know this by the prepared forms I brought in on November 1st. You are correct I did hire an attorney to do the work, however, I also thought I was hiring a law firm that would not make mistakes and handle my case like an assembly line. If I took your advice and did nothing - excluding this 22C issue - I would have had creditors not listed that should have been. This is my life, and I will and plan to take an active role to make sure everything is done correctly. I know you guys do many of these, but that sometimes can be a problem as you do not have the time to dedicate to make sure everything is done perfectly. However, I will do the Quality Assurance Review on my petition and will continue to check PACER to make sure things are done correctly and timely. To be honest I take great offense to your email basically complaining that I am bothering you or your staff when it was something that you did. It was your mistake and you should take accountability, correct it, and apologize instead of expecting me to remain silent and let you determine how everything is going to play out. Again, this is my life and I will have to live the 5 years in this plan - not you - so I would appreciate some mutual respect and patience with you.

In regards to Jacqueline, when she first called me, I specifically asked her if it were okay to email her. She advised yes, and did not let me know she is not there when I run into problems. I specifically advised I prefer email as it is easier, and to be quite honest, I like to have a paper-trail. Also in my initial consultation with Steven I advised that I would only retain you if he would provide me with his email address as I like email. He provided it to me when I paid retainer. I have not once emailed him, I figured I would start with the paralegal. I will try to use the online contact us form on your website for my less urgent matters in the future, however, knowing this information you advised.

In closing, I would like to be updated with the additional creditors that will be added once you complete this review. Also if you still are not going to amend the 22C - that is fine as I fill more comfortable having what I said in writing in case I were to ever face any repercussions. I thought the plan payment was to be determined based off the DMI - so what payment am I to send in next week? Because projected plan payment off the incorrect 22C shows $654.07 - so that would make it $301.88 bi-weekly which would then be less than what you advised on the signing appointment.

Thanks again for your time.

Mike

[HHM]

Keep in mind, strategically, it is sometimes good to have issues in the plan that are subject to objection that you know you will lose on (but have a good faith argument why you did it that way) so you can concede those issues without conceding the ones you really want/need to keep.

Also, to be candid, I think there is a problem of expectations here. You hired an attorney to "do" your bankruptcy. Not "educate" and "Teach" you about bankruptcy (no client has enough money for that service )

[FishersMike]

Also, to be candid, I think there is a problem of expectations here. You hired an attorney to "do" your bankruptcy. Not "educate" and "Teach" you about bankruptcy (no client has enough money for that service )

Well I did hire an attorney to be competent - I am not wanting nor asked for any educating or teaching. If anything, it seems I am educating him. I apparently had to educate him that different counties have different housing allowances, teaching him that he actually needs to input the list of creditors they originally missed on the draft that I brought in to the signing appointment, and also teaching him he actually needed to "touch" the 22C -- he did not do anything from the changes that were made on I & J figures on the 1st on the 22C.

I do not feel I should have to sign under perjury something is correct when it is most clearly not even remotely correct. Hardly anything -- seriously -- line by line was correct. And I honestly do not think there is much the Trustee will be able to object on because all my expenses are within the normal limits -- nothing high. And for some reason if they "were" to find something they did not like as an expense - I have the wildcard I can add - I chose not to include my 401k Loan Repayments that I am legally able to do on line 55 in addition to the 401k contributions - which I would not have to worry as they are 15 year loans so I will be out of the plan before it is complete so wouldn't have to get a plan increase.

[HHM]

Don't get me wrong, I am not defending YOUR attorney, for all I know, he may be an incompetent, and if you paid $1,500 or less as the upfront retainer, he probably is incompetent. My general point is that the issues you have raised are not likely to jeopardize anything in your case. That doesn't mean they shouldn't be fixed, but I was trying to impart some peace of mind

[FishersMike]

Here is my email response from the attorney:

You would never face any legal repercussion for a legitimate error or miscalculation of a means test deduction.


What I mean by it being a wash is that the filed means test showed negative disposable income. Your version shows less than $10 of disposable income. The means test is a tool used to determine a floor of how much you are required to pay to your unsecured creditors.
Your plan payments of $720 per month should pay approximately $10-20 per month to general unsecured creditors. This may vary depending on the actual amount of the tax claims, the value of the vehicle that is being paid, etc. However, whether the DMI number at the end of the means test is Negative $200 or Positive $10; your plan is funded to pay the required amount. Therefore, there is no reason for the Trustee to object to the calculation. This because the calculation is a tool to reach an end, not an end in itself.


Also keep in mind that the DMI is a factor of (in part) a deduction for 1/60th of priority claims due. Since we have only estimates and not solid claims from the IRS/IDR, this deduction is estimated. Again, this could cause a change in the ultimate calculation, but a formal amendment is not generally necessary.


Nevertheless, I will prepare an amended means test to match the numbers you provided. I believe you are shorting yourself certain deductions, but, since ultimately it will not have any effect on the plan payment at all, it is purely an academic exercise at this point.



As I am typing this I received the note that you overpaid your filing fee by $25. Per your contract the filing fee was $274 and you paid $299. I am sending you the $25 today.


I have reviewed the creditor statements provided. All the creditors (or a collector that now owns the account) have been listed. Nonetheless, we will amend Schedule F to list the names of each party so that all receive notice.

Here is my reply to the attorney:

Thanks Jay. I appreciate it. Also the HSN & ATT were not yet sent to collections so that is why I remember them. So as long as those two get added, I believe the rest should be on there. Have a great day.

Mike


**** It may or may not have been needed, but I wanted my forms to be accurate so less digging around would need to occur by Trustee -- also the payment issue is caused by I paid them $1963.00 down and they show balance as $2150.00 on petition and it should only be $2125.00 ****

[momofthree]

I just wanted to agree with the others that a negative means test doesn't affect your ability to file ch.13. We weren't subject to the means test since we were under median, but when I took it (just for shits and giggles), it came up to negative of over $1000/mo. However, we were able to finagle our I & J to show a dmi of $610 to fund our plan (car payment).

[justbroke]

Chapter 13 litigation is an art form. HHM writes more concisely that I do and he is right on the money (pun intended). Getting your plan confirmed is a dance with the Trustee. There's usually give and take. You want to walk away smiling!