Bad news from our attorney (or why we should have planned ahead for BK!)

[JRScott]

Go back over your schedules. Make sure you didn't forget any expenses like car maintenance or property taxes. Check over everything and see if you can bring it down.

If you can get it down to around 100 dollars or less you'll be a 7. There have been many borderline cases come through and I've noticed the ones that are willing to fight usually come out okay.

I fear by mid year gas will creep back up. Look at what Russia is doing now and how OPEC is also cutting production. They are trying everything to drive the price back up.

[danaf]

http://www.usdoj.gov/ust/eo/bapcpa/20081001/bci_data/national_expense_standards.htm

[banca rotta]

Go back over your schedules. Make sure you didn't forget any expenses like car maintenance or property taxes. Check over everything and see if you can bring it down.

If you can get it down to around 100 dollars or less you'll be a 7. There have been many borderline cases come through and I've noticed the ones that are willing to fight usually come out okay.

I fear by mid year gas will creep back up. Look at what Russia is doing now and how OPEC is also cutting production. They are trying everything to drive the price back up.

Bk is backward looking. Once the case is filed there are really no "do overs" unless the OP can somehow get their case dismissed and refile again in 6 to 12 months and that has it's own set of challenges such as the limited stay.

Some courts typically don't like you coming back to amend expenses. You lose all credibility.

More reason bk is all about planning.

[danaf]

True banca rotta - unless they can prove their attorney made a mistake in the schedules....

[Flamingo]

Right, I asked about that on the CH 13 and understand that my increased income will likely increase our payments. DH is so frustrated right now. He can work one OT shift per week (1 in one dept for 4 hours, next week in another dept for 6 hours) and he feels like what is the point? We are being completely honest and up-front and are being treated like trash because we went out to eat more often than the UST thinks is appropriate.

I looked back and I counted the times we used went out (we always used the bank card) for all of 2008 and it was 56 times. So yeah, it was at least once per week but I don't think eating out caused us to be in BK trouble. And the most we spent was $86 for dinner on our anniversary, the rest of the times it was close to $25-35.

I'm so frustrated right now but I'm not going to let them drive me loony. I have faith and feel that somehow things will work out, whether it be 7 or 13 we will make it through.

You are missing the point that is being made as to why the Trustee has issues and why close looks are kept by trustees on filers. Most people in financial trouble do not go out to eat and try to cut back on spending and adjust their lifestyle. You did what many people do and go into denial, continue to live a lifestyle beyond your means, use those credit cards to fund everything, start taking one advance to pay off another credit card bill and blame everything else but yourselves for what occurred. The majority of us on here have all gone through it, are in it and or will continue in it until the bottom of the hole hits - it takes a while for it to actually sink in but it will. Some trustees go over everything with a fine tooth comb and some don't. Believe it or not you will get through all this and if you do have to file Chapter 13 it is not the end of the world and a big eye opener as to living without credit and learning how to handle cash. It is a lesson that is hard but is priceless in what you learn. Best of luck to you.

[Overmylimit]

Note - it is the Trustee's job to ensure creditor's be paid as much as possible and for them to be in their position, there can be no conflicts of interest. Just as other executives/professionals usually cannot hold stock or have any interest in clients of the company they work for. Believe it or not, a Trustee is just doing his/her job. Just think of all the stockholders all over the US being slammed by the huge number of business and personal bankruptcies. You can't blame the trustee for that...

I can understand that they are just doing their job however I thought my Attorney had said that the more a Trustee can recover for the Company that issued the credit the more they will make?

[Flamingo]

I can understand that they are just doing their job however I thought my Attorney had said that the more a Trustee can recover for the Company that issued the credit the more they will make?

The Trustee gets paid a percentage of the amount of your Plan that is set by the State or District. Ours received 9% which is spread out over the term of the plan (it is not per year). That is a pretty cheap fee for what he and his staff handle on a long-term Chapter 13 especially when you are paying on some credit cards in excess of 30% per year on just one credit card (think multiple cards) and that interest is eliminated. Unfortunately, filing bankruptcy is not free and comes with filing and other fees (Court, attorney and trustee). The Trustee also has to show that creditors are receiving all they can under the Plan and his job is also to search for and eliminate fraud in filings.

[JRScott]

Bk is backward looking. Once the case is filed there are really no "do overs" unless the OP can somehow get their case dismissed and refile again in 6 to 12 months and that has it's own set of challenges such as the limited stay.

Some courts typically don't like you coming back to amend expenses. You lose all credibility.

More reason bk is all about planning.

If they failed to list legitimate expenses then they can amend the schedules and most likely still get a discharge with little hassle. However it is important not to jimmy the figures, make sure it is legitimate figures you forgot to include initially and can prove existed at the time of the filing.

[welovedis]

Bk is backward looking. Once the case is filed there are really no "do overs" unless the OP can somehow get their case dismissed and refile again in 6 to 12 months and that has it's own set of challenges such as the limited stay.

Some courts typically don't like you coming back to amend expenses. You lose all credibility.

More reason bk is all about planning.

Well, unfortunately for me I didn't find this site and learn about BK planning until after the case was filed.

I also feel (personally) that although I do like my attorney he could have been better about talking us though the paperwork as far as expenses. I went with a schedule J based on info from a separate financial counselor from my church who was trying to help us *not* have to file and go down to a bare bones budget.

In reality our budget may be different post BK if these debts are discharged. And since I can back up every single area of the budget that I am proposing I certainly don't think it will effect my credibility. At least I hope not!

[welovedis]

You are missing the point that is being made as to why the Trustee has issues and why close looks are kept by trustees on filers. Most people in financial trouble do not go out to eat and try to cut back on spending and adjust their lifestyle. You did what many people do and go into denial, continue to live a lifestyle beyond your means, use those credit cards to fund everything, start taking one advance to pay off another credit card bill and blame everything else but yourselves for what occurred. The majority of us on here have all gone through it, are in it and or will continue in it until the bottom of the hole hits - it takes a while for it to actually sink in but it will. Some trustees go over everything with a fine tooth comb and some don't. Believe it or not you will get through all this and if you do have to file Chapter 13 it is not the end of the world and a big eye opener as to living without credit and learning how to handle cash. It is a lesson that is hard but is priceless in what you learn. Best of luck to you.

I do get the point, honestly I do, and we were going out to eat more frequently in the beginning of the year. Closer to the time of our trips I was meeting with a financial counselor at our church to try to see if we could somehow change our situation and pay the cards off over a long term plan--no BK was ever in our minds.

Once my DH lost his OT (out of the blue), then that is when we realized what deep mucky we were in and how our lifestyle needed to change dramatically. I can count on 1 hand the # of times we have gone out to eat (including getting a pizza) since Sept 15th--the day he lost the OT income. Nearly 4 months and we are on a strict, strict budget.

I do get their point, however, we cannot be the only people who have filed BK who have made the same mistakes and I cannot see how going out to eat the often, going to school voluntarily and taking 2 trips, makes us out to be the case to point fingers at and presume abuse.

I was very foolish not to do research before filing BK, if I had I wouldn't be in this position as we would have waited to file. Our attorney didn't give us a good enough history into what the trustees look for and I have spoken to him about that already since I am not a BK expert and he should be.

Again, we are taking full responsibility for what we've done and if a CH 13 is where we belong than I will accept that, but I'm not rolling over.

[banca rotta]

If they failed to list legitimate expenses then they can amend the schedules and most likely still get a discharge with little hassle. However it is important not to jimmy the figures, make sure it is legitimate figures you forgot to include initially and can prove existed at the time of the filing.

I read this old sticky and always agreed with it. I have also read real cases and it's pretty close to this poster's opinion.

http://www.bkforum.com/showthread.php?p=33037

- ok so you think you can come up with more expenses latter on to show the court you cant afford it. adding expenses after the fact to help your side take all of your credibility away. the judges speak to this day in and day out in cases. as soon as you make changes to you case - which you will have to do if this happens to you or you will be forced into a chapter 13 - you will have lost your standing with the court and they are less likley to side with you. from then on their viewpoint is that you are changing things to cover your ass. and they are right even if you did leave something out it makes you look very bad.

[okiemom2008]

I read this old sticky and always agreed with it. I have also read real cases and it's pretty close to this poster's opinion.

http://www.bkforum.com/showthread.php?p=33037

- ok so you think you can come up with more expenses latter on to show the court you cant afford it. adding expenses after the fact to help your side take all of your credibility away. the judges speak to this day in and day out in cases. as soon as you make changes to you case - which you will have to do if this happens to you or you will be forced into a chapter 13 - you will have lost your standing with the court and they are less likley to side with you. from then on their viewpoint is that you are changing things to cover your ass. and they are right even if you did leave something out it makes you look very bad.

So what does she have to lose?

[BnkrptcyLwyr]

Do not panick.

Your disposable income is not much, and your attorney can amend your schedules I and J.

For starters, you said your medical expenses are higher than anticipated. Amend! You can amend at any time.

Did you include any of the following expenses (provided you have them) (and I typically ask my clients if they have these expenses):

Pet food / cat litter / vet care? (can range from $30-$150 per month depending on number / size and age of pets).

Bank / atm / services fees? ($25/month has not been objected to by the trustees).

Personal needs of you, spouse, kids? (I take about $20-$25/month per person)

Magazine / newspaper subscriptions? ($5 per month is typical).

Continuing education / seminars? (had a few clients with this - about $20-40/month)

Other unreimbursed work expenses?

Storage unit? ($20-100/month)

Gym membership? ($10-30 /month)

School lunches? ($20-150/month)

School activities for the kids? ($25/month is not out of the ordinary)

Extracurricular activities / scouts / sports? (depends on the sports and activities, but $10-$50/month is not objectionable, and I had a chapter 13 client whose kids were pro-level bowlers and we deducted $300/month for them - no objection (but I was surprised that there was no objection)).

401k contributions? (yes, you may be able to deduct these in your district - some attorneys think you can't take them)

Emergencies / unexpected contingencies? (I typically use $25-50) (and yes, I have case law on my side to take such a deduction).

Non-dischargeable student loans (depending on the district, you may be able to count this).

In short, what I do is nickel-and-dime the sh*t out of the expenses with very legitimate expenses which (for some reason) other attorneys don't always take or consider.

If none of these expenses are listed or accounted for, you need to go through them, and by the time you get done, your schedule I and J should look much different - and you might find that the UST will withdraw his objections.

Furthermore, let me add this. If you have 401k contributions which have not been taken, you should definitely list them. Here's the reason, because in a chapter 13 you will most certainly be allowed to deduct these in determining chapter 13 disposable income - and if that were to leave the unsecured creditors with nothing anyway, then there's no real advantage to forcing you into a 13.

[okiemom2008]

Pet food / cat litter / vet care? (can range from $30-$150 per month depending on number / size and age of pets).

Bank / atm / services fees? ($25/month has not been objected to by the trustees).

Personal needs of you, spouse, kids? (I take about $20-$25/month per person)

Magazine / newspaper subscriptions? ($5 per month is typical).



Storage unit? ($20-100/month)




.

On the pets, would boarding count? I have to board my horse because when we moved we could not find a home in the country. I am allowed to exempt her but am paying 75 a month for boarding. I did not want to list it because I thought they might make me sell her for some reason?

On Bank/ATM fee's..do you have to have proof of this if you say 25 a month? Would ordering checks(usually costs 25 for me but lasts me 6 months) be an expense?

Personal needs...again would you have to have proof from the past that you used these? On groceries I put 550 a month(we are allowed like 650 but I looked at our past grocery purchases and they were about 460.00 average) This all included diapers, formula, and personal needs.

Great Advice! Thanks!

[BnkrptcyLwyr]

Boarding of a horse is certainly an expense you should deduct, and $75/month is not much. If you can exempt the horse, then why wouldn't you list it?

Bank atm fees of $25/month has yet to be questioned - and no proof of the expense has been asked for.

Personal needs of $25/month has not been questioned. Start getting up around $40-$50 per month and it might get questioned.

Make sure you don't double dip - if you consider something as included in one group, don't include it in the other.

But you can see that there are plenty of additional expenses to consider.