how does bk attorney get paid, fiduciary to whom

[lrn]

Hi
i am talking with bk attorney in Florida.
Her flat fee is $4100 plus filing fee.
What is the total filing fee? How many filings for the total process?
Does she charge the creditors side too?
And what side does the attorney really working for? the side that pay her the most?
my question: does the attorney have fiduciary to you or to the creditors in a negotiation.

I know in a short sale of property, the attorney, or realtor get pay by bank as a fee, or comission,
so they work to get it close fast so bank can get the money proceeding fast.

[TXskyblue]

Google says the ch 13 filing fee in FL is $281. That sounds right to me. It's about $300 here.

The attorney is your attorney and does not represent anyone other than you. The only money your attorney makes is from you.

The attorney cannot file any papers they know to be inaccurate or fraudulent. Other than that, they work for you.

I think you would benefit from reading up on what a trustee is and what they do. Your questions sound to me like you are confusing a trustee with your attorney.

Good luck!

[lrn]

thank TXskyblue
my education is very limited, i have lots of question.
do you have a link to what a trustee?
there is a negotiation, and who is loyal to whom( debtor or creditor)
because the success is very low, 90 to 97% of chapter 13 ends up losing the collateral (house, cars...)
the odd is very bad.
1. how can you pay off in five years when you cannot pay a 30 yrs loan?
Second question in my mind:
example : a house loan is cramped down, say (from secured debt $300000) to bankruptcy secured debt $180000 and therefore there
is an unsecured debt of $120000. is this correct ?
so the five year plan is to pay both loans, that is very hard to pay. is this how it work?
I know that I do not know how bankruptcy work.

[keepmine]

If, you end up losing secured assets it just means you were trying to hold on to something you really couldn't afford to begin with. I doubt very seriously 90 to 97% of Chapter 13 plans fail.
In a 13, you are required to make the payments to secured creditors in the agreed amount. {Exception is a car you bought 910 days before filing}.
The 5 year plan concerns unsecured creditors like, credit cards and medical debt. Those are paid at some percentage over the life of the plan. That's determined by your lawyer who will propose a plan to pay unsecured debt based on disposable income available . The trustee must confirm the plan. That's where some negoiation may come into play.
Stop worrying about loyality. Your lawyer works to represent your best interest. As another poster wrote, don't expect them to do anything fraudulent. The trustee is bound by law to be certain creditors receive as much in a 13 as they'd have gotten if you had filed a Chapter 7.
If a creditor has a problem with your plan, they'll hire their on lawyer an file an adverserial proceeding.
Why do you want to file 13? How do you know you don't qualify for a Chapter 7?

[keepsmiling]

Was just about to ask those last two q's!
Sounds to me like you need to understand bk a little more before paying this attorney. Tell us your story and we'll try to help. Meanwhile read up here and learn learn learn.
Good luck and WELCOME.

[lrn]

TxSkyblue
I read in the % pay , the trustee and the lawyer have a cut in the monthly payment.
so the monthly payment of the unsecured debt benefits the trustee and the attorney.
inflated amount to pay two parties.

[lrn]

I have lots of 8 real estate mortgages including my homestead.
no credit card, medical, car loan.
all values are under the loan values, and we have a foreclosure auction this week.
too late to do short sale.
we met with lawyer friday and she calculate asset/liability income/expense....
and try to be in 13 not CH 11, because cost of CH 11 is about $25K
how do I know I am in 13? because the lawyer calculated and try to get in 13 vs. 11
nobody talks about 7, I guess too many properties.

[lrn]

Hi Keepmine,
can you tell me how the real estate secured debt plan going to be?
rate, terms...
I feel better because I think that I have to pay real estate at 5 yrs terms

she told me that after 2.5 yrs I need to shop for mortgage to refinance. why?

[keepsmiling]

Generally speaking, and to the best of my knowledge- the attorney does NOT get a percentage. That would be a conflict of interest.
The tt DOES get a percent. That's how he/she earns their fee.
I suspect you have some kind of a balloon due in 2.5 years.

What exactly are you trying to keep out of these 8 mortgages?

[LadyInTheRed]

TxSkyblue
I read in the % pay , the trustee and the lawyer have a cut in the monthly payment.
so the monthly payment of the unsecured debt benefits the trustee and the attorney.
inflated amount to pay two parties.

Your attorney doesn't get a cut of the monthly payment. You agree to a fee and that fee is paid from your plan payment if it is not all paid before you file. The trustee is paid a percentage of the money you pay to the plan, but it doesn't usually increase the plan payment. The plan payment is usually based on what your disposable income is. But, because it sounds like you are trying to save secured assets, there could be some minimum amounts that your plan payments need to cover (non exempt assets, payments on debt secured by assets you are keeping and payment on those asset if you don't make the payments outside the plan). If you have minimum amounts that need to be paid, you will have to come up with a budget that shows you have enough disposable income to make the required payment, including the correct percentage of trustee fee.

Your attorney works for you and represents only your interests. The trustee does not. You pay the trustee and the trustee pays the creditors. The trustee may also go after the creditors to get back any preference payments you made before filing. The trustee is not an attorney for the creditors either, even though he/she does work to make sure the creditors receive everything they are entitled to. Creditors can hire their own attorneys if they need to.

It sounds like nobody has discussed Chap 7 with you because your only reason to file BK is to allow you to catch up on mortgage payments. A Chap 7 doesn't help with that.

As already said, don't pay a penny to the attorney until you better understand the process. Sounds like you don't understand the basics. I suggest you read the U.S. Bankruptcy Court's "Bankruptcy Basics": http://www.uscourts.gov/FederalCourt...tcyBasics.aspx, including the definition of "trustee" in the glossary. Then do some more reading here, including the stickies, and ask some more questions.

There are some scary statistics about the "failure" rate of Chap 13. But, those statistics are really a percentage of plans that aren't completed and the word "fail" is not accurate. It includes people who converted to Chap 7 or let their case dismiss because their goal had been accomplished. It also includes people who were trying to keep assets they couldn't afford and after struggling in a 13, accepted reality and let them go. There are many reasons that Chap 13 plans don't get completed that are not shown in the statistics. You are not a statistic. You need to make decisions based on your very individual situation, not statics.

[lrn]

Hi Keepsmiling
we just want to keep our homestead house, the other properties we will do something to keep it within the
chapter 13 limit.
only one or two have positive cash flow, with upside down fair market value vs. loan value.
We have not have a plan yet, because we need to generate lots of paperwork, statements...
Do they take all your cash in the personal bank accounts?
what about stocks in the TD Ameritrade accounts?
can you explain about the rental property, what happen in detail with payments and terms?
something about appreciation in the five years,,,, paying 100% to the unsecured debt creditor..

[LadyInTheRed]

how do I know I am in 13?

To be in a Chap 13, your unsecured debt cannot exceed $383,175 and your secured debt cannot exceed $1,149,525.

[keepsmiling]

Yes, in Florida your exemptions are pretty limited. If you were to file a 7, they'd probably take most of your cash and stock. How much are we talking about here?
But 13's are completely different.
Do you want to tell us a little about your income? And the value of the property you'd like to keep plus the income it generates?

The more info you share, the better we can help you.

[despritfreya]

After reading this thread I have to shake my head and ask. . . What on earth is OP doing. This IS NOT a Chapter 13. The IS a Chapter 11.

1. OP has 7 investment properties and 1 homestead residence;

2. OP, to keep the investment property, must have positive cash flow from each otherwise they are not necessary for an effective reorganization and he/she is diverting disposable income to keep “toys”. Since a Chapter 11 allows for payment of the cram down value over an extended period of time, property that does not produce positive cash flow now, can produce it once the cram down is finalized;

3. OP already recognizes that a cram down for the investment property is virtually impossible to accomplish in a Chapter 13 BECAUSE the crammed down value MUST be paid “in equal monthly installments over the life of the Plan”. The payment would be a principal and interest payment and would last no more than 60 months. Unless this property is producing SUBSTANTIAL income or the crammed down value is minor in amount, most cannot afford to do this in a Chapter 13. As mentioned above, in a Chapter 11 you can re-write the newly created crammed down loan over as many years as you want. We typically set the term at 30 years. This allows a debtor to “create” positive cash flow where once there was none;

4. Properties not subject to cram down would be paid pursuant to the already existing contract (unless surrendered) and the only thing that would be covered by the Plan are any pre petition arrears. This is true be it a Chapter 11 or 13;

5. OP states he/she has no other debt but the mortgages;

6. Op is concerned over the cost of the 11. SHOP AROUND. A well run and executed Chapter 11 may cost you between $15 and $25k but, in the end you will not be worrying about paying the cram downs in 5 years (or some stupid idea of refinancing in 2.5 years which is highly unlikely to happen). Quite frankly, when you add up what you will pay to a Chapter 13 Trustee as the disbursing agent for those cram downs (if not paid outside of the Plan) the 11 WILL BE CHEAPER since the debtor acts as the Trustee.

OP. . .

The attny is pushing the 13 because she does not know how to run a Chapter 11 and, I presume, does not know how to deal with a creditor taking what is called an “1111(b)” election. Further, she may be concerned that you will not be able to “master” the day-to-day requirements of being a “trustee”. SHOP AROUND and educate yourself. While the work that would be required of you can be tedious, once you get the hang of it, it becomes no big deal.

As to the loyalty of the attny. . . If you file a 13 the attny’s duty is to you. If you file an 11, YOU AND THE ATTNY have a fiduciary duty to the creditors because YOU are acting as the Trustee.

Des.

[lrn]

keepsmiling
do they take all your pension and IRA money?