In Bankruptcy Limbo!!

[jkhilljr]

I am new to this so please bear with me. My wife and I went to file a Ch 7 BK back in august. The lawyer told us that the trustee wanted us to file a ch 13 because we made too much money over the median. We just went to our trustee meeting yesterday for the 13, we were there for 5 minutes and the trustee said the payment was to low on the plan, we make to much money, we need to submit a new plan. WE CAN BARELY MAKE THE PAYMENT ALREADY! So we meet with the lawyer today and he tells us that according to the papers that show our income and expenses, we show that we are upside down. He is going to take our case to the judge and ask for us to be discharged in a 7. He wants us to provide more detailed documents that show the expenses and he says that should be enough to convince the judge to allow a 7, even though we fail the means test. So what happens? Has anyone heard of this happening under the new bankruptcy law? I'm really going crazy over this whole ordeal.

[CATCHMEIFYOUCAN]

I WAS in a Ch13 because I had two full time jobs. The Means Test proved I had no disposable income (a negative balance -$60) which many people refer to as "failing the Means Test," (if you in the negative). Schedules I and J proved I HAD disposable income of $800. I have no assets but because of my 2 Full Time jobs I had to repay back something, so the lawyer proposed $250 (kind of good faith effort). The Trustee objected to the plan. I went before the judge, and the judge said "the courts aren't forcing you to work 2 full time jobs," (so in the long run, I had 2 choices: 1)continue to work 2 full time jobs and pay back $800 a month for the next 5 years OR 2)quit one full time job and convert to Ch7) GUESS WHAT I DID!

YOU BET, It only made sense, why waste the next 5 years working 80 hours a week, when I can just wait 2 months owing nothing and pray for a discharge? I'm just waiting for the discharge papers as the last day for creditor objections was Jan 8th.

Good Luck to you! Catchmeifyoucan

You'll probably need to prove how much you spend to eat up that disposable income you have! My problem was (not only an additional Full Time job) but my disposable income wasn't used up to the IRS standard capacity, so the judge was like, "live in a more expensive place, eat out more, SPEND more on what is reasonable," doesn't make sense to that!

[AMISLANDER]

I WAS in a Ch13 because I had two full time jobs. The Means Test proved I had no disposable income (a negative balance -$60) which many people refer to as "failing the Means Test," (if you in the negative). Schedules I and J proved I HAD disposable income of $800. I have no assets but because of my 2 Full Time jobs I had to repay back something, so the lawyer proposed $250 (kind of good faith effort). The Trustee objected to the plan. I went before the judge, and the judge said "the courts aren't forcing you to work 2 full time jobs," (so in the long run, I had 2 choices: 1)continue to work 2 full time jobs and pay back $800 a month for the next 5 years OR 2)quit one full time job and convert to Ch7) GUESS WHAT I DID!

YOU BET, It only made sense, why waste the next 5 years working 80 hours a week, when I can just wait 2 months owing nothing and pray for a discharge? I'm just waiting for the discharge papers as the last day for creditor objections was Jan 8th.

Good Luck to you! Catchmeifyoucan

You'll probably need to prove how much you spend to eat up that disposable income you have! My problem was (not only an additional Full Time job) but my disposable income wasn't used up to the IRS standard capacity, so the judge was like, "live in a more expensive place, eat out more, SPEND more on what is reasonable," doesn't make sense to that!

This is why I don't understand the purpose of a ch.13!

[lrprn]

This is why I don't understand the purpose of a ch.13!

Amis, Ch 13 allows filers who have at least $167 of disposable income every month and have assets they want to keep (houses, cars, other properties) to still get a fresh financial start. Ch 13 filers can catch up on deliquent taxes and pay overdue mortgage payments without losing the home to foreclosure. Other secured debts can be stretched out to be repaid over the life of the plan too. You have to give a % payback to your unsecured creditors, but you also get to keep your most important assets, bring overdue payments up to date, and in the case of cars, pay off your car loans and emerge with the titles when your plan is completed. Hope this helps explain Ch 13 a little better. It isn't for everyone, but it does offer many of us a viable way out of an impossible debt situation.