Has Anyone Been Forced Into Ch. 13...

[yoyoma51]

Has anyone here actually been forced into Chapter 13 EVEN THOUGH they made LESS than their state's Median Income?

(Assuming of course that they wanted to file Chapter 7, they didn't have a substantial pay increase right after filing and there was not abuse, fraud, etc.).


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.

[Runnin on empty]

I'm guessing there are exceptions to every rule, but chances are, if someone falls under the median for their state, their budget will probably stand up to the I vs J schedule, and thus stay within the Ch 7 realm.

Of course, like I said, there are exceptions to every rule. I'm not a lawyer, and things change from area to area. People should consult a lawyer in their home district for more concrete information.

[FreshLikeADaisy]

Yoyoma, I'm pro se so there's no one forcing me to do jack BUT, as part of my preparation, I looked at a whole bunch of cases in my district, paying special attention to Ch7 or Ch13 bk's that were dismissed instead of discharged. Obviously, I am trying to avoid their mistakes.

When I looked at the cases of several "bankruptcy mill" attorneys in town, I saw dismissal after dismissal for failure to pay the plan, including several that did not even make their first payment. When I looked at the cases of the attorneys whom I had chosen beforehand as probably being competent (they are out there writing articles, participating in blogs, etc) I saw no such dismissals. In fact, I only saw two dismissals for these two attorneys in the last six months, compared to something like 20 for this one guy alone, who I know is a bk mill.

And how do I know he's a bk mill? A friend of mine has an elderly mother who is slowly being pushed toward bk because of medical costs (esp prescriptions) that are not covered by Medicaid (or Medicare, I forget which is which). Anyway, he took his mother down to see this guy based on the recommendation of a friend. The attorney's proposal? To put her in a Chapter 13 with a plan payment that exceeds her *fixed* monthly income by some $450, assuming that my friend would make up the difference for his mother. Failing that, he wanted to put my friend into a Ch7 himself so he would be better able to assist his mother in going into this Ch13 he was proposing, because my friend would then have no debts of his own. In actuality, she qualifies for a 7 whenever she would like one (all her retirement income is exempt), but right now she's not doing anything because that attorney creeped her out so much.

When I saw dismissal after dismissal for failure to make plan payments -- and especially multiple dismissals for debtors who did not make even the FIRST plan payment -- that said to me that there was something wrong with the attorney. At the very, very, VERY least, he is not telling these people the consequence of failing to make payments. But I noticed that he was not converting any of these cases to Ch7, either, which told me that he just really didn't give a damn.

And yes, as far as this one attorney and the others like him whose cases I looked through, it seems to be an inescapable conclusion that people are being steered into Ch13s that they simply cannot afford.

I so wish everyone had the time, skills, and wherewithal to do this kind of research and see it for themselves. I know I'm an odd nut and not everyone can or would, but when you see case after case after case... it just becomes so clear.

[lrprn]

Has anyone here actually been forced into Chapter 13 EVEN THOUGH they made LESS than their state's Median Income?

Although everyone who files Ch 7 is scared silly this will happen to them, we have not had one single member here in two years since the current law went into effect who was under the state median and still was forced by the trustee to convert to Ch 13.

If someone is foolish enough to sign on the dotted line agreeing to a Ch 13 plan with a payment that they know they cannot make, then it's not the law that's at fault. It's the dishonest lawyer (fortunately rare) who bears 90% of the blame for pushing them that way, and the debtor themselves get the remaining 10% for blindly trusting whatever the lawyer tells them.

[yoyoma51]

Just as I suspected. Contrary to what some people in the forum believe, this 'worst case scenario' is very unlikely.

[tay666]

Just as I suspected. Contrary to what some people in the forum believe, this 'worst case scenario' is very unlikely.

Unlikely yes.
But not impossible.

You just have to take it into account when filling out your forms.
The odds of someone who is under the median income actually having a lot of excess cash are slim anyway. That isn't a whole lot of income and most of it will be eaten up by necessities like food, utilities, a place to live, and transportation. Then the rest will be chewed up with medical, household, and clothing costs.
And even if in reality they do have a couple hundred left over every month, it wouldn't be hard to hide it on paper. Because chances are the extra money is because you aren't spending as much as you are allowed to in some area.

[jp2861]

Just as I suspected. Contrary to what some people in the forum believe, this 'worst case scenario' is very unlikely.

I haven't read anywhere that "some people in the forum believe" anything. If you read the BK rules and get up to speed you'll see most are simply restating what the law says.

Being forced into a 13 may be unlikely for folks on this forum because they have some knowledge from reading here and doing thier due diligence in educating themselves. But, don't for a minute think it isn't happening. This board represents just a sliver of the number of filings happening every year.

The law is very clear on this matter. However, as has been stated, shady lawyers, fudging the numbers on expenses, uneducated filers, etc, allow some that are definitely Ch13 candidates to sneak into the Ch 7 category. If there were enough folks on the governments payroll to QC every filing and filers forced to verify every expense, rather than just swearing in, I suspect you'd see alot more being guided into a 13.

[FreshLikeADaisy]

Yoyoma, I thought you were asking about being forced into a 13 by whatever means (trustee or attorney) because you did not specify trustee. Can't read your mind, you know.

For an uneducated debtor it really doesn't matter, actually: if you go to an attorney not knowing any better, and he's very confident and persuasive, you'll end up in a 13 whether you qualify for a 7 or not. To me, that's the real shame. If the trustee converts your case, you at least tried for the 7... and if circumstances change, you can voluntarily go from a 7 to a 13 later on.

P.S. There are people on this board who have had their cases converted from 7 to 13 by the trustee with all kinds of backstory, so ditto to what JP said above.