We met with our first lawyer today

[lolasaurus]

I really liked her; she was very personable, although her office was a little more modest than what I would have imagined.

Key points she shared (I'm in western washington):

1. She recommended that we definitely stop paying CCs and medical debts now
2. She recommended that we more or less hmm and haw about reaffirming the house even though we have no real desire to keep it, so that we can keep the deductions
3. She told us to save our money that we don't spend on CCs because we can likely exempt it under this rule: If we choose federal exemptions, since we're upside down on the house we can supposedly use some of the $40k home exemption to keep cash, up to $10-$20k. Does anyone know anything about this? In all my reading on here I've never heard of it. I really hope it's true, it would be nice to be able to start saving NOW, even though it won't be much.
4. Because of my christmas bonus, a 401k payout that we didn't ask for (an old $900 401k account that they stopped servicing and just shipped to me), and my travel bonus, it looks like I'm best served to just wait 3 more months before filing, but if I retain her services I can direct creditors to her when they call to collect.

Her fee is $1650 all inclusive w/filing, credit check, the bankruptcy class, and her fee.

Granted it's the first, but I feel like I found a pretty good one here.

[TEW]

I really liked her; she was very personable, although her office was a little more modest than what I would have imagined.

Key points she shared (I'm in western washington):

1. She recommended that we definitely stop paying CCs and medical debts now
2. She recommended that we more or less hmm and haw about reaffirming the house even though we have no real desire to keep it, so that we can keep the deductions
3. She told us to save our money that we don't spend on CCs because we can likely exempt it under this rule: If we choose federal exemptions, since we're upside down on the house we can supposedly use some of the $40k home exemption to keep cash, up to $10-$20k. Does anyone know anything about this? In all my reading on here I've never heard of it. I really hope it's true, it would be nice to be able to start saving NOW, even though it won't be much.
4. Because of my christmas bonus, a 401k payout that we didn't ask for (an old $900 401k account that they stopped servicing and just shipped to me), and my travel bonus, it looks like I'm best served to just wait 3 more months before filing, but if I retain her services I can direct creditors to her when they call to collect.

Her fee is $1650 all inclusive w/filing, credit check, the bankruptcy class, and her fee.

Granted it's the first, but I feel like I found a pretty good one here.

If you reaffirm the house you are stuck with it.
I filed in PA and could have saved up to 18600.00 $9300.00 each

[lolasaurus]

If you reaffirm the house you are stuck with it.
I filed in PA and could have saved up to 18600.00 $9300.00 each

I realize we'd be stuck with it, but she isn't suggesting we actually reaffirm, just indicate that we are going to.

[dingdong]

Glad to hear your are getting started with it. It helps to have that extra info and knowledge and at least you have an attorney to compare others with if you continue your search.

Hows the kiddo? Hope she is doing well and your wife is getting a little relief knowing things will get better for your family soon.

Good luck with your attorney hunting!

[DebtStinks]

If you are over the mean income and don't pass the means test without the mortgage payments then you need to be careful. It's not super common but there is recent case law that has dismissed Chapter 7 cases on "the totality of circumstance" when your intent is to surrender secured debt.

Most of these cases the debtors were way over the mean income and had very large secured debt payments. With these payments it was easy for them to pass the means test but they then surrendered the property shortly after filing for bankruptcy. The UST then comes and does a hypothetical 6 month forward looking view of their situation without the large secured debt payments. In all of these cases the debtors had significant disposable income in this forward looking view and the UST required the conversion to a Chapter 13 or dismissed the cases.

So I’d guess this might be the reason that your lawyer recommends that you don’t file to surrender the property. Even if you true intent is to do so in the future.

If you are bored here a few of these cases from my area:

Case No. 06-10924-B-7
Case No. 08-14549-B-7
Case No. 08-14555-B-7

[lolasaurus]

Case No. 06-10924-B-7
Case No. 08-14549-B-7
Case No. 08-14555-B-7

Are you saying that the UST comes in *after* the case is closed when the house is up for foreclosure, and says 'whoa whoa whoa, you're doing this wrong' and does this, or that the UST comes in *during* the case when you've listed intent to surrender?

If the latter, that's why this attorney is suggesting we 'intend' to reaffirm but just never reaffirm.

[DebtStinks]

Are you saying that the UST comes in *after* the case is closed when the house is up for foreclosure, and says 'whoa whoa whoa, you're doing this wrong' and does this, or that the UST comes in *during* the case when you've listed intent to surrender?

If the latter, that's why this attorney is suggesting we 'intend' to reaffirm but just never reaffirm.

During the case.

[lolasaurus]

During the case.

So my question becomes, then, is the attorney we're talking to suggesting a valid strategy or am I walking into trouble?

[DebtStinks]

It's a valid strategy. We are pretty much doing the same thing. I don't think we are going to keep the house since we owe 336k on a home that is worth on a good day 150k. As of today we are current... one lawyer says to just stop paying now and it won't matter. The other says keep paying the mortage till the case is closed. Not sure what we will do yet on payments. But if you say your intent is to keep the house and that you are trying to work with the lender for a possible loan modification then I'm guessing it would be fine even if you are late on payments.

[Kingxray]

Case No. 06-10924-B-7
Case No. 08-14549-B-7
Case No. 08-14555-B-7

This is exactly what is happening to our BK right now along with several other issues that the UST is using to try to get our cased dismissed or converted to 13. But I am not sure how else we could have done it. So just be careful or at least ask your lawyer about this possible scenerio.

[lolasaurus]

It's a valid strategy. We are pretty much doing the same thing. I don't think we are going to keep the house since we owe 336k on a home that is worth on a good day 150k. As of today we are current... one lawyer says to just stop paying now and it won't matter. The other says keep paying the mortage till the case is closed. Not sure what we will do yet on payments. But if you say your intent is to keep the house and that you are trying to work with the lender for a possible loan modification then I'm guessing it would be fine even if you are late on payments.

Plus, if we ask the lending company, who knows, we might even get a modification that is decent (though I'm not holding my breath, obviously)