Lawyer saying a Debtor Cannot Ask for a "Delay"

[gman]

So my friend who is considering withdrawing her Chap 13 and refiling as a 7 has a meeting set with her Chap 13 Trustee set for July 17.

Her original 13 filing of a few months back was NOT confirmed by the Trustee, so when this July 17 meeting was set, her intent at that time was to simply correct errors in her 13 plan before it could be confirmed. She has since changed her mind and wants to do a 7 (and it appears that she would very likely qualify as a divorce took place in the interim and her "numbers" have changed.

She told her lawyer today she was not comfortable proceeding with the Chapter 13 and at the very least wanted to delay. He told her that was "impossible" and she must show on the July 17.

Questions:

1. Is this really true? Is there no way her lawyer could make a filing to delay for a month or so?

2. If she is "forced" to go, what can she say to the Trustee to make sure her desire to not proceed with the 13 at this time be heard?

She is feeling railroaded by her lawyer but does not know what her rights are and what to expect if she "must" go on the 17th of this month.

Thanks for any and all advice!

[AngelinaCat]

Yes, most of the time one must have a very compelling reason for not attending the 341--something on the order of being party of the Armed Forces, and being deployed out of the country, or literally in the hospital on the death-bed.

If she does not go, it is very likely that the case will be dismissed. The trustee *may* choose to 'continue' it until the next month, but that will likely depend on the individual trustee.

I believe that it would be in her best interest to attend the 341 on July 17. When she goes before the trustee, she is perfectly free to state at that time that she wishes to dismiss the CH13. She will have the advantage of observing a few 341s to get a feel for the process.

Very likely the attorney will absolutely go bonkers and 'lay an egg or two.' She needs to be aware of that possibility.

Good luck!

[justbroke]

While you cannot delay a 341 Meeting without a very good reason, you absolutely have a right to dismiss a (voluntary) Chapter 13 voluntarily. It appears that the friend does not know what she wants to do and will probably want to dismiss later. In any event, the best thing to do may be to attend the 341 Meeting anyhow.

I do not understand when you write her "original" Chapter 13 filing. Was there already more than one case in the last year?

[gman]

While you cannot delay a 341 Meeting without a very good reason, you absolutely have a right to dismiss a (voluntary) Chapter 13 voluntarily. It appears that the friend does not know what she wants to do and will probably want to dismiss later. In any event, the best thing to do may be to attend the 341 Meeting anyhow.

I do not understand when you write her "original" Chapter 13 filing. Was there already more than one case in the last year?

Sorry I probably was not very clear.

* She filed for a Chap 13 in March/April of this year.
* After her (original) 341, the Trustee objected to the 13 plan (mainly due to actual vs. projected daycare expenses, but also had some other items he objected to.)
* The date for the 341 to hear the revisions to the 13 was set for July 17.
* In between the original 341 and today, she officially became divorced, which led her to reconsider the 13 because it appeared that she might very well qualify for a 7.
* According to her lawyer, she did pass the MEANS TEST but failed the I & J portion for a Chapter 7 - and he has been pressing her to finish the Chapter 13.
* This changed when I pointed out to her that her lawyer failed to include ANY car payment in Schedule J. They both also woefully under represented what her actual expenses would be as a single mother, as she's now responsible for all health care expenses for her two boys (according to her divorce decree), as well as all daycare. Finally the amount they both put down for food and clothing was very small for 3 people (total combined for both was around $600/mo on the Schedule J he had prepared). However, the IRS estimate/allowance for a 3 person household in her zip code is around $1,220/mo. Even if she was conservative and put down right around $1,000/mo. for food and clothing combined she'd be in better shape. Needless to say, her revised Schedule J shows her now at a negative $700 or more whereas before it was positive. She was already a "slam dunk" on the MEANS TEST and now the I & J look to be well into the "safe" zone for a Chapter 7.


So, assuming she does NOT withdraw her Chapter 13 BEFORE July 17, it sounds like she has to go and appear.

What can/should she say at that hearing to the Trustee to make it clear she does not want to have her Chapter 13 plan confirmed until she has reassessed her options?

I hope this sheds more light on the situation.

;-)

[despritfreya]

OP's friend filed a few months back. I don't think we are talking about a 341 meeting. I think we are talking about a continued hearing on confirmation of the Plan.

Getting the hearing continued may depend upon local rules/practice. Typically, if the debtor has a good reason to continue, a phone call to the trustee to see if he/she will oppose the motion goes a long way. If there is no opposition, a Motion to Continue can be filed and in the body of the Motion it can be stated that the trustee has been informed of the wish to continue and does not oppose the request. Even if there is opposition a Motion can still be filed as it is ultimately up to the judge.

Deciding if a debtor wishes to either convert or dismiss, in my opinion, is a reason to continue the confirmation hearing but only for a short time, no more than 30 days. However, if there has already been an unreasonable delay in moving the case forward, the motion will be met with resistance from both the trustee and the judge.

Des.

[despritfreya]

gman,

You posted at about the same time I did. If your friend cannot afford the Plan payment and really wants and can qualify for the 7, unless there is some overwhelming reason to stay in the 13 she should let it go. However, whether she makes that decision before or after the next hearing really does not matter with one exception. . . Once the Plan is confirmed the Trustee is bound by the Order Confirming to distribute the funds already paid. Once the Plan is confirmed your friend will not get any money back. If the case is dismissed before the Plan is confirmed, the money paid to the Trustee (less any legal fees owed to the attorney and/or adequate protection payments made to a secured creditor) will be returned to her.

Des.

[gman]

gman,

You posted at about the same time I did. If your friend cannot afford the Plan payment and really wants and can qualify for the 7, unless there is some overwhelming reason to stay in the 13 she should let it go. However, whether she makes that decision before or after the next hearing really does not matter with one exception. . . Once the Plan is confirmed the Trustee is bound by the Order Confirming to distribute the funds already paid. Once the Plan is confirmed your friend will not get any money back. If the case is dismissed before the Plan is confirmed, the money paid to the Trustee (less any legal fees owed to the attorney and/or adequate protection payments made to a secured creditor) will be returned to her.

Des.

Very good point! Had not considered that.

She showed me her recent account of funds paid to the Trustee and what the Trustee has paid out to date.

* She has paid over $6,000 into the (unconfirmed) Chapter 13 plan so far.
* Only around $600 has been disbursed - and virtually all of that went to FORD CREDIT
* Her lawyer has not yet received a dime, but is due around $3,500.
* She has another paycheck on JULY 15 and $800 of that will go into her account.

So if I am reading this, her biggest risk by showing up on July 17 to the 341 is that the Trustee very quickly APPROVES the 13 BEFORE she moves to withdraw it.

Am I correct?

Also, how easily and quickly can she have her attorney move to withdraw her 13 petition? Sorry if this is a "dumb" question, but in my BK case I was a 7 from day one so the world of the 13 process is a little foreign to me.

Thanks for the advice in advance!

[AngelinaCat]

Sorry I probably was not very clear.

* She filed for a Chap 13 in March/April of this year.
* After her (original) 341, the Trustee objected to the 13 plan (mainly due to actual vs. projected daycare expenses, but also had some other items he objected to.)
* The date for the 341 to hear the revisions to the 13 was set for July 17.
* In between the original 341 and today, she officially became divorced, which led her to reconsider the 13 because it appeared that she might very well qualify for a 7.
* According to her lawyer, she did pass the MEANS TEST but failed the I & J portion for a Chapter 7 - and he has been pressing her to finish the Chapter 13.
* This changed when I pointed out to her that her lawyer failed to include ANY car payment in Schedule J. They both also woefully under represented what her actual expenses would be as a single mother, as she's now responsible for all health care expenses for her two boys (according to her divorce decree), as well as all daycare. Finally the amount they both put down for food and clothing was very small for 3 people (total combined for both was around $600/mo on the Schedule J he had prepared). However, the IRS estimate/allowance for a 3 person household in her zip code is around $1,220/mo. Even if she was conservative and put down right around $1,000/mo. for food and clothing combined she'd be in better shape. Needless to say, her revised Schedule J shows her now at a negative $700 or more whereas before it was positive. She was already a "slam dunk" on the MEANS TEST and now the I & J look to be well into the "safe" zone for a Chapter 7.


So, assuming she does NOT withdraw her Chapter 13 BEFORE July 17, it sounds like she has to go and appear.

What can/should she say at that hearing to the Trustee to make it clear she does not want to have her Chapter 13 plan confirmed until she has reassessed her options?

I hope this sheds more light on the situation.

;-)

gman, you really need to get your friend on this forum where she can ask her own questions.

This very post that I quoted illustrates the problem well. You and she are two different individuals, with two very different points of view. You have very different experiences and understanding of the problem.

Right now, she is funneling her questions through you. Or, you are attempting to understand and explain her questions here on this forum to us.

In either case, there is an unnecessary 'filter' in place between the questioner and the answerer.

Or, think of it in this way: How many times have you read a book, that was originally written in another language, and the translator producing the English-language version of the work was woefully inadequate to the task?

I think we are having this situation here. I know you want to help, but your friend really needs to sign in, ask her own questions with you at her side to help her understand the process.

Okay, I'm off my soapbox now. I really want the best for your friend. And I commend you for trying to help her.

[gman]

gman, you really need to get your friend on this forum where she can ask her own questions.

This very post that I quoted illustrates the problem well. You and she are two different individuals, with two very different points of view. You have very different experiences and understanding of the problem.

Right now, she is funneling her questions through you. Or, you are attempting to understand and explain her questions here on this forum to us.

In either case, there is an unnecessary 'filter' in place between the questioner and the answerer.

Or, think of it in this way: How many times have you read a book, that was originally written in another language, and the translator producing the English-language version of the work was woefully inadequate to the task?

I think we are having this situation here. I know you want to help, but your friend really needs to sign in, ask her own questions with you at her side to help her understand the process.

Okay, I'm off my soapbox now. I really want the best for your friend. And I commend you for trying to help her.

In theory - I cannot dispute a single point you have made.

In reality - she is (currently) looking to me to help her. She is running low on time and simply does not have the experience to know what questions to even ask, let alone how to interpret them.

Trust me, I wish she would take the bull by the horns and jump on this forum.

Right now, she won't, so I have to play her eyes and ears.

[AngelinaCat]

It's okay. I totally understand.

I have another question: if she and you decide to discharge the attorney--especially if the CH13 gets dismissed--do you feel adequate to help her file her CH7 pro se?

I hate to see more attorney fees following after all that has been paid into the CH13 already. I understand that none of the current attorney fees have yet to be paid...

[gman]

I don't pretend to be a lawyer, but I worked really hard on my own while unemployed back in 2010 to learn as much as humanly possible about doing a Chapter 7.

I did mine on my own and by no means was it a slam dunk. I had made significant income prior to losing my job and had to learn both the process and how to manage the MEANS TEST on my own. I lived on this website, met with 10+ lawyers, visited the courthouse (an hour away) many times and even sat all day watching 341 hearings to see what that day would be like.

If she wants to do Pro Se (she may have to due to the costs), I am there for her. She is good friends with my girlfriend and we will both be there for her, for support and guidance.

[AngelinaCat]

I am thinking of the costs, too. That is why I asked.

This forum is here, and ready to help.....

[justbroke]

So if I am reading this, her biggest risk by showing up on July 17 to the 341 is that the Trustee very quickly APPROVES the 13 BEFORE she moves to withdraw it.

As Des aptly pointed out, this does not sounds like a 341 Meeting, but more like a (continued) confirmation hearing. If she does not attend, the case could proceed to actual confirmation or the Trustee could seek and obtain dismissal on July 17th.

I would look to Des' information on a continuance.

[AngelinaCat]

As Des aptly pointed out, this does not sounds like a 341 Meeting, but more like a (continued) confirmation hearing. If she does not attend, the case could proceed to actual confirmation or the Trustee could seek and obtain dismissal on July 1th.

You meant July 17th, correct?

In any case, gman, your friend has got to be there.

[justbroke]

You meant July 17th, correct?

Yes, I just corrected it before reading your post. Thank you for keeping me... accurate.