US Trustee recommends converting to Chapter 13

[$$onlynoplastic]

My attorney called me today to advise that he received a letter from the US Trustee. The trustee is recommending converting to a Chapter 13. I have to meet with my attorney next week to go over expenses, etc. He won't answer any of my questions concerning plan payment etc until our appointment. I have alot of questions and obivously very worried. I know that the plan payment is based on disposable income (Our paperwork didn't show any) so my question is how fair will this be for me? Why didn't my attorney file a Capt 13 to begin with? Will I have to live under a bridge? Never eat again? I feel like the poster child for Bankruptcy. I need someone to help me. I feel like my attorney is an idiot right now.

[HHM]

Well, there is nothing wrong with an attorney trying to get you into a 7 if your case is boderline, but he probably should have told you that there is a possibility that you may need to convert to a chapter 13. But without knowing what the US Trustee is objecting too, there not much for us to say. What did you list as your expenses? and what is your monthly income.

[$$onlynoplastic]

Total income is $4083. The expenses left us -$250 per month. Obivously, the trustee thinks that some of our expenses are too high. and wants us to change them. I wish the attorney had assisted us more. He said that the expenses were okay. I even had all of the receipts. What is the usual percentage in the payment plan?

[HHM]

Do you have kids or other dependants? What this US Trustee may be doing is starting to adjust to the standards set out by the new BK law. Despite your actual expenses, under the new law, certain types of expenses will be capped at the IRS assumed expenses, also, if your income is above your states median income that may be an issue.

You can always tell your attorney that you do not want to convert and have the US Trustee file their objection, but if you do that, you will be on your own as representation in adversarial proceedings is beyond the scope of most BK attorney's representation.

Meet with your attorney and find out what the problems are first before you make a decision.

[$$onlynoplastic]

One son still living at home attending college. Again, I don't have a problem doing a 13, but right now I feel like I am the poster child for Bankruptcy. I will be the chosen one to be made an example of. I wish I could get a handle of what the payments are going to be. I have a car payment of $338.00 per month. Will that be included in the plan? How much more will I have to pay for unsecured debt? Before I filed, I was paying around $2,000 a month for credit cards and car payment. Will I have to pay that with the 13?

[kawie88]

When did you file?

[$$onlynoplastic]

February 22nd. 341 meeting was on 4/1. The US Trustee had flagged our file at the 341 meeting. She requested all types of documentation which was fine. I didn't have anything to hide. I even had to write a three page essay on "Why I filed Bankruptcy." My expenses were legimate. I even had all of my grocery receipts. The trustee on the case notated in Pacer on 04/07 that it was a no asset case. Then, today's call and of course the attorney will not tell me what the letter said, only that the US Trustee recommened a Chapter 13. Trust me, we are not rich by any means. No vacations, just normal living expenses. I am sure that our income had something to do with this and the new bankruptcy laws. We are going to be made an example of. What really makes me mad is that we tried to avoid filing bankruptcy for 6 years. Cashed out all of our retirement in 1998 to pay down debt; ended up paying $17,000 in taxes. Instead of not paying the taxes, we took out personal loans, which cut into our budget so we used the credit cards. I got a second job to try to pay down debt; ended up paying almost $4,000 in taxes. My vehicle was stolen. Even with the insurance money it cost more money to replace the vehicle. The list goes on and on. Filing bankruptcy was not an easy choice. I felt bad enough, but from the time of the 341 meeting I have been made to feel like a deadbeat, a liar, scum, etc. Yet at the 341 meeting, there was a guy who was filing chapter 7 and he got to keep his brand new 2005 Landrover. The trustee even wished him luck. Sorry that this reply is so long. I had alot of frustration I guess. And I couldn't get a straight answer out of my attorney today. Who is he representing? Me or the trustee. So much for trying to do the right thing I guess.

[edwards2]

We filed a Chapter 7 and had our 341 meeting a few weeks ago. I noticed by your date of your filing and your 341 meeting that the U.S. Trustee objected after the 30 days. You said in your post the U.S. trustee flagged your paperwork. Dont you mean the BK trustee? We had to provide additional documentation too but we had to do it prior to the 341? It looked like they wanted paperwork to support all of the big expenses. FYI our attorney was concerned about an expense on our filing as well but after the 341 he said the BK trustee didnt seem to have a problem with it. Additionally, he liked the BK trustee; said she was very fair and not one of the hardliners people like us come to fear. Just a bit of optimism but not much because after reading your post 30 days doesnt seem to be the last day for objections from the Trustee. We had major medical issues but our joint income is was decent. We gave them all the documents we had and fortunately it should support our claims on a monthly basis at least. I dont want to do a Chapter 13 either but I know it is a possibility according to our attorney. The only thing I think that might save us from it is the medical catatrosphie and the BK trustees recommendation. I would like to know how much power the BK trustee has. I read the US trustee rarely goes against their recommendation but I also heard he/she was just a gatekeeper. Now I am really worried.

[$$onlynoplastic]

My meeting is with my attorney on Tuesday. The ironic part of this whole story is that I was never opposed to being a Chapter 13. My attorney kept assuring us that we were a 7. Now I wonder if I am going to have a hard road to go. Meaning, is the US Trustee going to try to force us in a plan that will not work. I cannot pay back 100% of my unsecured debt. I am afraid that I will be punished and be used as an example. Anybody out there, any ideas on what (if any) my rights are at this point? I would welcome anyone's input at this point.

[$$onlynoplastic]

If anyone has read my prior posts, I need some advice and support. My meeting is with my attorney on Tuesday. Can the US Trustee force someone into a Chapter 13 payment plan that will not be fair to the debtor? Can they make me back 100% of unsecured debt even if my budget will not allow for this? Will they make my life miserable for the next five years? I am not sure that my attorney is going to anything. He hasn't yet to this point. And if I do not the plan because it is unfair, what recourse do I am? Or am I doomed?

[edwards2]

We are all thinking about you and wondering how did the meeting go Tuesday night? Maybe we can help.

[Minnymouth]

CALM DOWN......breath deep!!!! Relax....
Yes, BK is hard on ya, just don't make it any harder by stressing out (believe me, I know).
Let the Trustee look at your paperwork, see where your expenses are and what they are.
Possibly the Trustee thinks you can do a Chapter 13 but he has to see all the paperwork first, then may decide Chapter 7 is necessary. So be patient.....
Yeah, some of them lawyers don't tell ya stuff they should, so keep an eye on him too...
All you can do now is "wait" for discharge or changeover to a 13.
In chapter 13 (if you have to do it) you will feel the crunch, but they will let you live... you just won't be going to Paris for Christmas this year.
Feel free to ask all of us questions, if you need moral support - WE'RE HERE FOR YA!
There is a light at the end of the tunnel - you just can't se e it yet..
When you do - it will be GREAT!
Minny