Should I hire an attorney who is also a trustee in another state?

[ejny65]

Should I ?

[yoyoma51]

My wife and I have hired a trustee as our attorney. He really seems to know the "ins and outs" of the system.

He also knows our trustee very well.

Can't hurt, we figured.

Bankruptcy is a federal procedure, so as long as your attorney is licensed to practice in your state, you should be OK. There are 'local' rules, so make sure he is familiar with them.


PLEASE NOTE: I am not a lawyer. Bankruptcy may or may not be a best scenario for you. It depends on your situation. You may assume my advice is totally useless. Talk to an experienced bankruptcy attorney (or three) in your jurisdiction for legal advice.

[ejny65]

Thanks for your reply and advice. may i ask if there is a question of WHY would you have this much unsecured debt? i have 80 +/- and all in credit cards. I have not filed yet, lack of knowledge worries me, plus being self employed, and worry about getting in detail and IRS getting into the case. What do you think? are they very detailed and will i go under microscope? will they look into business as well?

[yoyoma51]

Good questions.

We had a small business for about 6 1/2 years that we recently closed and dissolved the corporation. Most of our debt was from the business that we personally guaranteed (hence the large amount).

Because a large portion of it is business debt, our attorney asked for copies of both our personal and corporate tax returns. The corporate ones show our loses (therefore needing lines of credit and credit cards to keep it going).

Although it is a large amount, we really have nothing to hide other than the fact we were stupid in the fact we kept our business going longer than we should have (therefore costing more $$). Stupidity is not yet illegal.

Also, we had a CPA involved in our business accounting/taxes so we're not too worried about anything looking 'shady', because it isn't.

Being an experienced trustee (past president of the national organization of trustees), we believe him when he tells us there shouldn't be any problems, maybe just a few more questions to see if we have anything to hide.

Although scary and nerve racking (our 341 meeting is 12/26), we're convinced it should be OK.

[PaKettle]

Should I ?

My theory is that if you have a good case and nothing to hide, using a trustee can be okay. But if your case might be a little soggy for one reason or another, and you may need to "fudge" things a little (nothing illegal, just maybe adjust things here and there to make them fit) then I would not go with a Trustee.

My point is that a Trustee is likely (I think) to want to do everything completely prim and proper and not want to be "creative" which is sometimes helpful.

[yoyoma51]

We interviewed a few lawyers before choosing one.

In our experience with our lawyer/trustee, he is more than willing to do be as "creative" as necessary, he knows how to do it and what the trustee is looking for (since he is one). He is the only trustee we interviewed.

What he told us was basically this:

I work for you. I know the 'system' and how it 'works'.

He is even telling us how to answer questions that his buddy (our trustee) may (or may not) ask since we had a business and he may poke around a bit.

I see Pa's point, but I believe it depends on the attorney. My feeling is, they're all corrupt and crooked, just to varying degrees.

PLEASE NOTE: I am not a lawyer. Bankruptcy may or may not be a best scenario for you. It depends on your situation. You may assume my advice is totally useless. Talk to an experienced bankruptcy attorney (or three) in your jurisdiction for legal advice.

[emoney]

Best idea I have heard of in years.
regards,
emoney

[PaKettle]

Thanks for your reply and advice. may i ask if there is a question of WHY would you have this much unsecured debt? i have 80 +/- and all in credit cards. I have not filed yet, lack of knowledge worries me, plus being self employed, and worry about getting in detail and IRS getting into the case. What do you think? are they very detailed and will i go under microscope? will they look into business as well?

I owed around the same amount as you - that is no problem.
The only problem with mine was that by the time I got around to filling after stopping paying, my $85k or so debt turned into almost $100k with interest and penalties. This, then, makes the U.S. Trustee (higher than the regular trustee who usually handles your case) take a look at it. So don't wait more than a month or two to file unless you have to, like if you took out some big balance transfers not too long ago. But let your attorney decide that.

The IRS should have no reason to get involved UNLESS you owe money to them or have not filed taxes, from what I have read here...

Someone may ask why this much debt... Tell them the truth. See what your attorneys at your consultations say about it. If you were living off credit cards, tell your attorney. If you went on vacations or gambled it, tell your attorney. Your attorney is your best defense so tell him the truth.

As for lack of knowledge, read here a while and you'll gain tons of it. You may also want to buy the NOLO or Dummies bankruptcy book(s).

[monkatom]

Pa or anyone else is it a problem to try and discharge more than 100K? I know the US Trustee will become involved so should i be worried that I want to discharge 121K in CC debt. I did not have a failed business etc, just over spending, living beyond means, and a few setbacks finanacially? Just curious.
Thanks

[ejny65]

Thanks for all replies. monkatom, my problem is the same. I over spent, nothing huge like diamonds or luxury items, but just spending beyond my means. Let me know how it goes, because regardless of anything else, we have same worries. just one payment is past due and calls and penalties have started. I am chocking... i need to get my papers ready and go to a good attorney soon.

[FreshLikeADaisy]

Pa or anyone else is it a problem to try and discharge more than 100K? I know the US Trustee will become involved so should i be worried that I want to discharge 121K in CC debt.

You know, I have no idea, but it occurs to me that it would have to vary by district, because $121k in Des Moines is a helluva lot different than $121k in Los Angeles. The local trustees would be accustomed to seeing a higher dollar amount in those expensive areas. If they called in the U.S. Trustee for every $100k+ indebtedness in NYC, for instance, those guys would be awfully busy. "No donuts for you, big fella, gotta get to court and look into Granny's bk!"

I know that's not a straight answer to your question, but factor that into whatever you hear anecdotally about what dollar amount triggers various trustee responses.

[ejny65]

What is it that trustee can't do and US trustee can do(or will do), if the debt is higher than a certain amount? how do I know where my areas UST located?

[CastleKnight]

Hey YoYoMA !

YoYoMa:
Hi,I read your post. Our stories are almost identical. We also owned a business for 6 years and got into a ton of debt trying to keep the business going. All of it falling to us personally if the company defaulted.We owe no tax debt.Most of it is loans and cc. It is a tune of about 200K. We filing personal BK and closing the business. We filed Dec12. Our 341 is 1-29-08. Just wanted to say I feel your pain as a failed business owner who tried their best to suceed.Good Luck.

[yoyoma51]

Thanks CastleKnight-

We were fortunate that we had someone to purchase our assets (of the business), so that made it a little less painful.

I received a call from our attorney Monday who told me the US Trustee was requesting more information (credit card and loan statements) because of the high amount. It does not appear we are being audited, however.

We received a copy of the response letter he (our attorney, who's also a trustee) sent the US Trustee yesterday. I think it is a good sign. It starts out:


"David-

This is in response to your inquiry regarding case number xxxxxxx. The parties names are xxxxxxxx and xxxxxxx.

I think you missed that this was a business case.

They will produce a large folder full of information that I will send you. They are not hiding any assets. Please note as per the petition, Mr. xxxxxxx is now employed as a gas station attendant.

Thank you-

xxxxxx"



I thought that was great.

[yoyoma51]

Moderator:

Please delete this post. It was and accident.