Getting ready to file - sacred to death!!!

[Pandora]

My attorney mentioned waiting 6 months to file but that is not an option since my husband could loose his job (security clearance) over unpaid bills and collection attempts. Also, we could not handle the constant calls from creditors - miss one payemnt and the calls start immediately up to 6 - 10 times/day!!!

Napoli,

If your attorney told you to wait to file.. then you should wait - that way your look back period wont be so high for income. Of course, you need to ask about doing it as forward looking (Lanning) as well, but generally to go into a Ch. 13 plan when you could wait a bit, will result in creditors getting less $ from you.

The way to handle the collection calls is to 1. not answer the phone; 2. answer the phone just to confirm you are you then send a letter stating all comm. must be done in writing, 3. upon filing BK, provide them with your case #, lawyer's name and number. The only way they will get to you is if you LET them get to you.

IMO, if I were in your shoes, I'd deal with the collection calls up until my income dropped off; I'd much rather answer a call and simply state there has been no change in status than have the possibility of paying double the amount back to creditors due to fear of them. No brainer...

[BKAttyMI]

I would actually say that my Chapter 13s are actually *less* profitable than most of my chapter 7s, just because of all the extra work, hearings, plan changes, etc. that goes into doing them. Even after that, I don't even get paid up front for all the time I put into the case and if the debtor dismisses the case before I get paid, there's a pretty good chance I won't receive anything (although it's never happened to me). I don't think most attorneys actually want to push people into 13s, they just don't know any better. Bankruptcy is a much different area of the law than others, unless you've worked in this area for awhile, there is a sharp learning curve.

Unless the Trustee in your area is going to be upset about the means test, and you're sure you want to stay in your home and strip the lien, I don't see a problem with filing now, especially if security clearance is an issue.

[Napoli1986]

Thanks for your response.
The attorney we are working with used to work for the trustee and knows how the trustee thinks. He feels the proposed payment of $750/month will not be a problem since we are paying $45000 of the $60000 of unsecured debt in a 60 months plan.

As far as stripping the 2nd mortgage the attorney is sure that will not be a problem since 1. when we refinanced the 1rst mortgage over a year ago the second lien holder got $41,000 and subordinated. Now we still owe $159,000 on the first and $50,000 on the second. The value of the house is $98,666. The attorney says that is a clear cut case for lien stripping.

The means test still scares us because initially when we did it it came up with over $1500/month for 60 months. We included my income into that although I have no income any more but worked Jan.-May. At that $1500/month payment we would be left with $831/month for gas (300/month), groceries etc. Unfortunately I do need a very special and expensive diet (I am gluten intolerant as well as a diabetic) and although I have already cut back on buying gluten free products for me $500/months for groceries won't cut it. The allowable amount for a 2 person household here in Florida is $989!

We have tried to find new homes for our 2 dogs which really breaks our heart but in this economy nobody wants to adopt pets anymore so here the only option is to have them put down which is not really an option. I much rather starve before I put my pets down!!!

As you can see our situation is really bad.

[LadyInTheRed]

Napoli1986,

It sounds like you are in good hands with your attorney. She plans to use the rule in the Lanning case to look forward in calculating your plan payment. What does your attorney say about the food bill? You should be able to exceed the standards if there is a medical reason for it.

If waiting 6 months to file will put your income below median, it could cut your plan to as little as 3 years. Are you sure your husband would lose his job? You can read about security clearance guidelines at http://www.fas.org/irp/offdocs/dcid6-4/class.htm. Under the Financial Concerns it lists mitigating circumstances:

20. Conditions that could mitigate security concerns include:

(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

(b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g. loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue;

(f) the affluence resulted from a legal source of income.

The fact that you lost your job is one mitigating factor. I would also think that if you and your husband default on payments in preparation for bankruptcy under the advice of your attorney, you are acting reasonably under the circumstances, are receiving counseling and making a good faith effort to resolve the debts through bankruptcy. Working with your attorney on the best way to plan your bankruptcy is an indication that the situation is being resolved and is under control and that it does not make your husband a security risk.

Before ruling out waiting 6 months, your husband should talk to the proper person at work about the security clearance.

[momofthree]

Napoli, we are a gluten-free home as well and have found that buying gluten-free noodles by the case off of Amazon.com (with free shipping) is quite affordable. Our fave brand is Tinkyada. We can usually get a case of 12 packages of spaghetti noodles, elbow noodles, etc. for around $35.

[jetsfan2010]

your house value is under 100k and you owe over 200k on it? you guys couldnt rent in your area cheaper?

[Pandora]

We have tried to find new homes for our 2 dogs which really breaks our heart but in this economy nobody wants to adopt pets anymore so here the only option is to have them put down which is not really an option. I much rather starve before I put my pets down!!!

As you can see our situation is really bad.

Are you saying that you cannot afford to keep your family pets due to possibly having to go Ch. 13? Did you not allocate $ for food, vet care, etc? Giving away family pets and/or putting them down should never be an option unless they've attacked someone or are beyond saving due to illness / injury. While I realize that some may disagree with me, there are always places that will rent to you if you have pets if you have to give up your home - as I've had many friends in this very position - two included horses as well as dogs / cats.

Please go over your entire budget again and allocate the appropriate amounts for each pet. You can come up with a figure based on what you buy every month, and regular vet visits (i.e., check-ups), as well as putting a bit more aside for ER situations. It can be done and many vets will work with you on a payment plan if the need arises; we just had to do this very thing back in January for our cat; $2K vet bill to save him - paid it off in monthly installments.

You should be able to claim the IRS standards in all areas, and possibly above standards in others - unless you have all priority / secured debts to pay back, in which case you wrote that you dont, so your entire payment would be to unsecured creditors. Food @ $300 month is next to poverty - that's merely $75 a week on a bi-monthly pay cycle, and less than that if paid 26 pay periods. Something isnt right here...

Wishing you the best...

[Napoli1986]

Well, the deed is done!!! We filed yesterday and things don't look great but not that bad either. Our monthly payment is $550/60 month which means we are paying 50% of our debt.

[LadyInTheRed]

things don't look great but not that bad either.

Sounds like what a Chap 13 is supposed to be like.

Congratulations on taking the big step. I hope everything goes smoothly.

[Napoli1986]

341 meeting set for 8/16!!!

[Napoli1986]

341 meeting was today and things went very well. The trustee had no problems with the proposed payment plan and only asked me if I had found a job. Well, that answer was/is 'no' and the trustee even suggested to quit looking since the job market - at least here - are not gettting any better!!

DELL filed their claim and very much to my surprise they filed it as 'unsecured' which is a relief since we had to replace our computer this last January. Needless to say, we just bought a basic computer - nothing state of the art. I was really worried about Dell since I had heard they were hard and next to impossible to deal with.

[catleg]

Most stuff bought with Dell credit is expected to be resold so chances of recovering it are slim.

[IamOld]

Best wishes!!!

And don't be suprised (not that it matters to you in any way) if Dell all of a sudden will sell your claim to a JDB.

Dell did for us (and so did Chase and HSBC credit cards.)

341 meeting was today and things went very well. The trustee had no problems with the proposed payment plan and only asked me if I had found a job. Well, that answer was/is 'no' and the trustee even suggested to quit looking since the job market - at least here - are not gettting any better!!

DELL filed their claim and very much to my surprise they filed it as 'unsecured' which is a relief since we had to replace our computer this last January. Needless to say, we just bought a basic computer - nothing state of the art. I was really worried about Dell since I had heard they were hard and next to impossible to deal with.

[nanadonnaq]

We just filed for Chapter 13 in March. We have a wonderful lawyer with a lot of experience. He and his legal assistant walked us through everything we
needed to do. He is nothing to look at but he sure knows his stuff. Send me a personal message and I will send you his web site and or his telephone
number. Good Luck--Our bankruptcy went thru the Tampa court and we had no problem. We got a great Trustee--objected to our first plan for 36 months
so our lawyer negotiated with him and we got confirmed for a 47 month plan . Now we will just ride under the radar. Good Luck

[Napoli1986]

This came in the mail today which is great news. Maybe things aren't that bad after all!!!!

Trustee’s Recommendation to the Court. The Trustee recommends that confirmation of the Chapter
13 Plan be CONFIRMED for the following reasons:
The Plan is well-conceived and self-explanatory. Assuming that the Debtor’s estimates as to claims
are substantially accurate, the Trustee is of the opinion that the Plan meets the requirements for
confirmation.