Inheritance - Need Advice

[DJC]

Our life seems to continually get more and more complicated. We are scheduled for our 341 hearing this Thursday, Feb 19th. My wife's mother is in ICU quite some distance from where we live. She is heading out tonight for San Diego, our hearing is in Michigan. Our attorney (thru a text) said he will try and get a new date. "Try" this word sounds ominous to me. What does that mean? Are we at risk for something I don't know about? We have already made a payment to our trustee, will we get a new trustee with this new 341 hearing date?

The second part of this is, there could be an inheritance involved. Should we consider negotiating with our debtors if we simply going to loose all of this money to the trustee?

The last thing, we do not particularly like our attorney, we think he is tired of dealing with us and just wants this to be done and over with. We have struggled to agree on several exemptions and he keeps missing important facts. Also, we think he going to bill us over our paid $3,500 and get his money when our payments go up after an exempted vehicle is paid off in a couple of years. Any comments would be welcome.

Thank you, DJC

[justbroke]

First, yes the attorney means "try". It is not up to him to set a new date and it is entirely in the hands of the Trustee. The Trustees will usually allow a 341 Meeting to be moved for extenuating circumstances. Whether your particular Chapter 13 Trustee will allow you, udner these particular circumstances, to move the 341 Meeting... is still solely the Trustee's decision.

Second, $3,500 is quite common for a Chapter 13 where some of the fees are included in the Plan. In fact, most Districts have what they call the standard "no-look" attorney fees for both "standard" Chapter 7 and Chapter 13 cases. (In my District we actually call them presumptively reasonable debtor's attorney fee in Chapter 13 cases.) Our presumptively reasonable fee is $3,000 plus a la carte items such as $350 for a lien strip motion, and most other motions, not requiring a hearing. So, $3,500 is about in the wheelhouse.

I wish you shopped your attorney more so that you liked him better. Some attorneys do get "tired" if there are just too many questions, changes, concerns as they only get the presumptive fee. If they charged you a la carte, they would charge $250 - $350 an hour for their services and make more money. Chapter 13 cases are just choc-full-of paperwork and require, at least in my District, a single 341 Meeting and 2 hearings in order to be confirmed. Any additional fees that your attorney earns by dealing with stuff outside the "no look" price (probably the $3,500) to attend a hearing, such as to Strip, or a hearing to value your vehicle, is earned money. He will be paid from the funds in your Chapter 13 Plan before the unsecured creditors get anything.

Just to provide you, maybe, with some comfort, please realize that exemptions in a Chapter 13 are not the end-all be-all that they are in a Chapter 7. In a Chapter 13, it just establishes your "Chapter 7 liquidation value" (also known as your "best interest of creditors test"). It only establishes the "minimum" payment to unsecured creditors. If you have a lot of DMI, the liquidation test is not going to matter as much. Sure, the really big things like a $10,000 homestead exemption is one thing, but if you're arguing over the "value" of something he may see you as nitpicking. If he put your homestead exemption at $0 and you believe it's $10,000, just have him explain how it works under the law.

I would not worry about your case future and just let it move forward. If the inheritance happens, then deal with it at the time it happens. Settling with creditors is NOT a panacea where they all just fall at your feet to offer you pennies on the dollar. In fact, a creditor need not settle with you.

What is the real problem here?

[magic13]

Because you are in Michigan one thing you have to consider is that the plan does not start until you are confirmed and you can't be confirmed until your 341 hearing. You may not have another hearing for a couple months which is money out your pocket