3 Things... Fire Attorney? New Job... + Biz Debt

[GoodyYearCap]

I have three situations here. Any advice would be appreciated.

1. I hate our attorney. I really wish we would have talked with several before jumping the gun with this guy. He seems nice, has seven kids, and seems well-intended, however, we were over the CH means test by $14k and he did nothing to try to get us to qualify for CH7. That's fine and well, & we will be paying $406/month for 60 months. That is, if the Trustee approves, I guess. Is there a way to fire this guy and start fresh, if our meeting is Feb 21st, or is that silly, and should we just go and get it over with? Basically he has no backbone, and I'm just worried that he wouldn't even know how to stick up for us.

2. My husband is receiving a new job offer soon. We aren't sure of the salary, but it is higher than what he is making now. I swear on my life, our attorney told us "look, after the 341, you can go make your millions." But then when asked to clarify (i.e. CAN WE STALL THE OFFER LETTER UNTIL AFTER THE 341?) he dances around the question. I do not want to lie if the Trustee asks if we are "expecting any new income" or something (being dishonest is out of the question) but if they don't ask, and we don't tell, how will they know? And if he ends up getting another $1k/month with this new job, would they consider that DMI and take it all? If that's the case, what's the point in going through with the CH 13??? My husband can definitely request not to start until March/not receive an offer until then either, but ...

3. I have a small business that essentially failed. It has only about $9k in debt, but it is with Wells Fargo, who has been harassing me daily, several times a day. My attorney says I personally guaranteed it, that I am on the hook for it, and to dissolve the company. I dissolved the company via the State, and they still call. He says there isn't anything they can REALLY do... they can SUE me, for their $9k, but if there's no business, there's no business. The $9k IS in our debt repayment plan.

All so confusing. Any relief/insight would be appreciated.

Thanks!

[despritfreya]

We were over the CH means test by $14k and he did nothing to try to get us to qualify for CH7.

Sorry, but if you and I sat down and worked your 6 month income and, in the end, you were $14k over median, I would tell you that you do not qualify for a 7 unless you have some major special circumstance. $14k is too big a spread to be covered by the “means test” for qualification. I would, however, have suggested that you try credit counseling before jumping into the 13.

We will be paying $406/month for 60 months.

Is this your disposable monthly income (DMI) from the completed means test or is this what you can afford to pay based upon Schedule I and J?


Before you "poo-poo" the 13, remember that the amount you are proposing to pay over 5 years is only $24,360.00. Figure 10% goes to the Trustee and figure another $2,000 to the attny, that leaves $19,924.00 for everyone else. Do you owe on a vehicle? Is it going to be paid through the Plan? If so, then deduct the amount owed plus interest from the $19,924.00 and now you know about how much is being paid to everyone else. So, how much do you owe - credit card, loans, personal guarantees, medical bills, etc vs. how much will be paid based upon the current Plan (see below for expected income change)? Maybe the 13 is not such a bad thing.

Is there a way to fire this guy and start fresh?

Certainly you can fire your attny but you should have another lined up before you do. The new attny can substitute in for the old. This is done all the time. As to “starting fresh”, not sure such is a good idea. You are not going to qualify for a 7 unless there is a major downward change in your income - which is opposite of what you have indicated will be happening. Letting case #1 get dismissed just to file another 13 makes little sense.

My husband is receiving a new job offer soon. We aren't sure of the salary, but it is higher than what he is making now.

Then expect your Plan payment to increase accordingly and you most certainly won’t qualify for a 7.

I swear on my life, our attorney told us "look, after the 341, you can go make your millions."

I doubt he made such a statement since your ability to pay is paramount in a Chapter 13. However, once your Plan is Confirmed (approved by the court) it is unlikely that anyone would catch a change in your income unless, for some reason, you have to go back to court.

Consult with other attorneys if you do not like your current one. Just understand that you are not likely to qualify for a 7. Congress changed the laws so that folks with higher than average income would be forced into a 13 - like it or not.

Des.