Chapter 7 "Dos and Don'ts"...help!!!

[Justme69]

Can some of you guys who have "been there" please give me the dos and don'ts of preparing for Chapter 7? Like:

A good time frame for filing...
How much to keep in the bank....
What all does the trustee/court look at
What about credit card use and payments? When to stop charging? What will raise questions?
How far back does the court look at your bank statments and credit card statements?
My luck has been so bad lately...Most of my cards are almost maxed out and I am paying just over the min on each...which leaves me very little at teh end of each month. I will need to purchase a new washing machine soon before the one I have falls through the floor because it leaks....and I will need to fork out money for repairs to my roof and my daughter's car...will these charges be a problem if I file next year sometime??
I don't want to do anything that would make my situation worse....so any tips would be great from those who have "been there".

[downwardspiral]

This is what I've found out so far:


How much to keep in the bank....You'll have to speak with an attorney first to find out how much you can exempt, cash wise, in your state.

What all does the trustee/court look at: They look at your bank statements, salary for the last six months

What about credit card use and payments? When to stop charging? What will raise questions? YOu should not have any charges 90 days prior to filing for bankruptcy. If you have everyday expense charges like gas and such, that will not raise a problem. It's best to have at least paid a minimum payment after your last use.

How far back does the court look at your bank statments and credit card statements? I've heard six months, but for cash advances on CC's they can look back upto a year.

You're best bet is to see an attorney. They give free consults. Every state has different laws. An attorney will be able to give you an idea of what you will need to do.

Good luck.

[Help!]

I can give you some don'ts!

Here's what I've learned... If your income is above the median you will be in for the fight of your life. The trustee can ask for documentation for every dime you've received in the past year and receipts for how you spent each and every one of those dimes. This includes bank statements for the past 12 months. If you're someone who used a debit card, this means you should be prepared to explain every trip through the McDonald's drive thru!!

In my opinion, do *EVERYTHING* you can to avoid bankruptcy. Once you do, there is no changing your mind and it will be on your credit report for 7-10 years - even if it's dismissed because you decided to back out of it! It is NOT the easy way out and it can be a very long process. Do not believe what the lawyers tell you. We were told it would be a matter of filing the paperwork and a 5 min. hearing. This is absolutely not the case and we were given terrible advice.

If you have even just a little money at the end of the month, my advice is to stay put. Try consumer credit counseling, negotiate with your mortgage lender if you own a home (you may be able to do a deed in lieu of foreclosure to get your home off your books) and make as many lifestyle changes as you can. Sell your possessions. If you've truly already done all of this and there is absolutely no hope of being able to make the minimum payments, ask others on this forum for the best attorney in your area. I didn't find this forum until after we filed and I really wish I would have had input from others.

"Bankruptcy protection" is a total misnomer. I have never felt so beaten down in my life and I really regret ever having filed.

Oh, and don't expect your attorney to help you out in the hearing. They may have done the calculations on those forms for you (fluffing the numbers to meet the means test), but *YOU* are the one who will get grilled about them in front of a full courtroom audience! Be prepared to provide receipts for those numbers on the means test. Our attorney sat across the table from us silently as we struggled to explain why we bought a brand new car right before filing, why our grocery bill is so high, etc., etc.

If your primary reason for filing is that it will take you an eternity to pay down your debt, know that it is extremely difficult to get your debt discharged and that you may end up paying it down anyway (but with someone else micromanaging your life)!

Good luck!

[laurannm]

Here's what I've learned... If your income is above the median you will be in for the fight of your life. The trustee can ask for documentation for every dime you've received in the past year and receipts for how you spent each and every one of those dimes. This includes bank statements for the past 12 months. If you're someone who used a debit card, this means you should be prepared to explain every trip through the McDonald's drive thru!!

In my opinion, do *EVERYTHING* you can to avoid bankruptcy. Once you do, there is no changing your mind and it will be on your credit report for 7-10 years - even if it's dismissed because you decided to back out of it! It is NOT the easy way out and it can be a very long process. Do not believe what the lawyers tell you. We were told it would be a matter of filing the paperwork and a 5 min. hearing. This is absolutely not the case and we were given terrible advice.

If you have even just a little money at the end of the month, my advice is to stay put. Try consumer credit counseling, negotiate with your mortgage lender if you own a home (you may be able to do a deed in lieu of foreclosure to get your home off your books) and make as many lifestyle changes as you can. Sell your possessions. If you've truly already done all of this and there is absolutely no hope of being able to make the minimum payments, ask others on this forum for the best attorney in your area. I didn't find this forum until after we filed and I really wish I would have had input from others.

"Bankruptcy protection" is a total misnomer. I have never felt so beaten down in my life and I really regret ever having filed.

Oh, and don't expect your attorney to help you out in the hearing. They may have done the calculations on those forms for you (fluffing the numbers to meet the means test), but *YOU* are the one who will get grilled about them in front of a full courtroom audience! Be prepared to provide receipts for those numbers on the means test. Our attorney sat across the table from us silently as we struggled to explain why we bought a brand new car right before filing, why our grocery bill is so high, etc., etc.

If your primary reason for filing is that it will take you an eternity to pay down your debt, know that it is extremely difficult to get your debt discharged and that you may end up paying it down anyway (but with someone else micromanaging your life)!

Good luck!

moving to another post

[southernbelle]

Can some of you guys who have "been there" please give me the dos and don'ts of preparing for Chapter 7? Like:

A good time frame for filing...
How much to keep in the bank....
What all does the trustee/court look at
What about credit card use and payments? When to stop charging? What will raise questions?
How far back does the court look at your bank statments and credit card statements?
My luck has been so bad lately...Most of my cards are almost maxed out and I am paying just over the min on each...which leaves me very little at teh end of each month. I will need to purchase a new washing machine soon before the one I have falls through the floor because it leaks....and I will need to fork out money for repairs to my roof and my daughter's car...will these charges be a problem if I file next year sometime??
I don't want to do anything that would make my situation worse....so any tips would be great from those who have "been there".

A good time frame for filing...
A good way to determine if you need to file asap or can wait a few months is to answer the following: Do you have law suits or judgements? Is your car about to be repossessed or is your home going into foreclosure? Do you have recent cash advances or luxury charges on a credit card? The filing timeframe is completely up to you and depends on what your situation calls for. Making appointments with at least 4 or 5 Bk attys in your area for free consultations will help you. They will look at your situation and give you better guidance.

How much to keep in the bank....
When you file you should have as little in the bank as possible. Many bk atty's will tell you to make it as close to zero as possible. Any cash on hand at the time of filing is up for grabs by the Trustee.

What all does the trustee/court look at
You could be asked to provide bank statements for the 6 months prior to filing, pay stubs for 6 months as well as supporting documentation for the information on your bk schedules. A bk atty would be more help giving you specifics in your District because it may vary.

What about credit card use and payments? When to stop charging? What will raise questions?
I stopped using mine about 6 months prior to filing. If you know for a fact that you will be filing bk, stop charging immediately. It is considered a prefential payment if you pay any one creditor more than a specified amount prior to filing. If you do, the Trustee has the right to get that money back from that creditor. Again, a local atty can help you with the specifics.

How far back does the court look at your bank statments and credit card statements? I think it is 6 months, but varies by District.

The free consultations will help you out a lot and I learned a lot by asking questions on this forum. Just keep asking questions. You will get some really good advice here. Good luck to you.

[southernbelle]

P.S., not everyone here has had the same experiences as one of the previous posters which is why it is good to find a lawyer willing to take the time to explain everything and will at least answer your questions. Trust me, it's no cake walk, but remember to tell your atty everything (if you decide to use one), disclose everything and don't try to hide assets, and review your schedules with a fine tooth comb prior to submitting them because you will be signing off on a Federal document stating that the information contained within it is accurate.

You are ultimately responsible for your bankruptcy and there are plenty of us here with complicated bankruptcies that haven't had major problems, but if you need the relief, it's worth it if you need it.

[Minnymouth]

OKAY FOLKS, HOLD ON HERE...........

Justme69, best advice I can give you is consult with an attorney and see what options are open to you. See if you qualify for a Chapter 7 or would be placed in a Chapter 13 because of excess income over/above debts.

Next, do a lot of reading on this forum of the "stickys" which explain what you have to produce for your attorney and the trustee.

Unless you have a great deal in assets that are not exempt for the Trustee to take or you have a great deal of income left over after you pay your expenses each month...... your bankruptcy should be fairly cut and dry, short and sweet, just like most people's are.

Filing bankruptcy is a "business decision" to make financial changes in your life that can't be changed easily any other way. Often reorganizing, consultations, debt relief programs, do not solve the problem and often make it worse.

Filing Bankrutpcy is not "criminal pursuit" nor are you treated as one. You are treated by the Court and the Trustee with the highest respect. They look over your financial affairs and make decisions based on those. (very seldom do you have "dirtbags" for Trustees and attorney's. They do not embarrass you in front of a Court room full of people. Your case is handled quietly and discreetly.

Like I said, discuss your options in a free consultation with an attorney. See what options are available for your circumstances. And then take it from there.

Read a lot on this forum...... read the manuals, specific cases, and pull up specific questions and get some answers that you might need.

Ask questions of those that have been there and done it...... they know the ropes, have survived bankruptcy, kept their homes, autos, etc.... and now their lives are basically debt free and they can survive now.....

REMEMBER, each bankruptcy is different in its own way. Many are simple and quick, some involve assets, and some can be dragged out due to assets, divorces, and too much income left over at the end of the month after filing. No two cases are alike.....

As for the member "HELP"............. and the "info" they offered you about "don'ts in bankruptcy"......... I am not familar with their case. But from the sounds of it........... they were forced into a Chapter 13 either for excess money at the end of the month, or had student loans/child support/or IRS (taxes)..... that forced them into a Chapter 13 and those items are not dischargable in bankruptcy. And yes, then you are forced into a repayment plan over a period of 36 to 60 month plans in which the Court controls your financial affairs till the plan is paid in full.

Plan your bankruptcy, ask questions, take notes. Let your bankruptcy WORK FOR YOU, not against you.

If you have questions, feel free to ask................

[Help!]

The above post was only my opinion based on my experiences. Obviously, there are people who have been helped by this process. My point was that this process is not for everyone and can be a nightmare if you're given bad legal advice. I vented too much, but what I really meant to say is that you should take the means test very seriously. Don't take an attorney's word for it - understand what you're signing and be prepared to defend it. Is that better?

[Justme69]

Thank you for all the replies. I just went through a horrible divorce...ex husband was abusive (very abusive) so when I left the family home I was instructed NOT to return for fear of physical altercations. Needless to say, I had to move home with my parents, my ex husband destroyed most if not all of my daughter and I's possessions (clothes, dishes, etc.). I left with a broken down car that I purchased for my daughter. I had to continue paying my debts (credit cards, ins, etc.) but had to purchase lots of things to get us "back on our feet"... things like clothing for the 2 of us which was NOT CHEAP not matter where you shop, dishes, toiletries, you name it I had to buy it. Of course, I had to charge most of these items on credit cards because I was left with very little already at the end of the month to survive on. Now it seems that I cannot see the light at the end of the tunnel....I can barely make the min payments and have money left over for food, gas, etc. I did have a few thousand sitting in investments (which took me YEARS to save), and I have cashed it in because I am afraid that my ex will try to "freeze" that account for the community property settlement. Now I don't know what I should do with the money..... I could pay some on my debt, but honestly, this is more of an emergency fund for major sickness and the like. I just feel like I am loosing my grip on what I should do and what I should not do. I have read lots here and took the means test (hopefully did it correct) and did pass the means test as my income for a household of 2 is below the state med. The more I read and think about it, I believe I am headed for Chap 7 sometime next year if things do not improve on my end!!!

[Minnymouth]

Thank you "Help" for clearing that up......

Yes, EVERYONE should take a real personal interest in their bankruptcy and plan it out.......... DO NOT RELY on just your attorney.......... KNOW whats going on, what to expect, and when.........

RESEARCH................ KNOWLEDGE IS POWER............. and get the opinion of several attorneys before choosing one.

I, above all people, KNOW the consequences of having a "bad attorney" and a "wicked Trustee"............ BEEN THERE, DONE IT.......... and its not FUN!!!

If your attorney flips you off, remind him that your paying him......... and you want answers................. Most Trustees are basically good guys, tho there are a few like mine was......

"HELP".... there are channels you can take to report bad attorneys..... they have guidelines they are supposed to follow, trustees also........... Your attorney is supposed to be representing you in your best interest to the best of his ability. If he has "short changed" you like mine did (to protect his own butt) then REPORT HIM...... Each one of them has a superior that they report too............ GO FOR IT.............

Thanks for your input in this thread.............

[Minnymouth]

JustMe69...............

The best thing you can do for yours self is a "GAME PLAN"...............

Major budget, get a good vehicle, make sure you have a good roof over your head and the necessities that you need..... THEN file bankruptcy if necessary to clean up the rest!!!

Will give you some more input later, have to run...........

Minny

[justplaintired]

Thank you minnymouth for your post, it explained alot. I have been coming on this forum since March and have found it to very supportive and very informative. I realize all cases are different, but for the most part all that have been thru it are very encouraging.

Help! I am sorry you are having a bad experience, it sounds like you got a not so great attorney. Perhaps is there anyway to find another to take over your case? I don't really understand all the situation you're in, but maybe another attorney could give you better advice. I think if your over the median it would be more difficult to do a 7 and your attorney should have been better prepared.

I recently talked with a collection agency who has one of our cc. She advised us against consumer counseling, also she told us that anything they can do for us, we can do for ourselves. Debt management she called criminals, she has been a bill collector for 25yrs and she's giving me this advice, basically telling me once the BK is behind us, we can start over and things will be fine.

I hope your problems will work out Help!, I think perhaps looking into reporting this attorney maybe a good idea, I am not expert, but this person did not do their job.

Good luck Help!

[Help!]

AHA!! No wonder no one seems to understand what I'm going through. I just read this thread and realized that this is not the same Ch. 7 process everyone else is going through. Our Chapter 7 is being audited!!

http://www.bkforum.com/showthread.php?t=24183

[AngelinaCat]

To All, but especially Minnymouth and Help!:

I am so pleased to have happened upon both this thread and the one that Help! just posted the link for. I feel a little better about what my husband (AngelinaCatHub) and I will be going through Thursday at our 2004(b) examination, and it isn't

[Help!]

AngelinaCat... I will say a prayer for you that your 2004(b) is only about the missing mortgage assignment and that you get through your 7 successfully! We also thought about finding another attorney, but already gave him our last $2200K and I suspect our stimulus check has been intercepted by the trustee... no money left to do anything but represent ourselves. I know we could do a better job than these clowns!! LOL!!!