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    Can this be right??

    Just got back from the lawyer's office and I hope to file this week. I thought I was meeting with the lawyer and instead met with a gentleman I believe is a paralegal. He was elderly, smiled a lot, was very friendly and was easily confused. He said he would gather the preliminary information and my next appointment would be with the lawyer.

    When he was calculating my income and expenses, when it came time to figure out my ytd tax debt, he pulled out my 2008 tax return and started entering numbers from that return to figure my 2009 tax rate. When he was finished he said, "Nope. You're over the median and you don't pass the means test." And I said to him, "Why are you using my 2009 income and my 2008 taxes??? I barely made any money in 2008 (hence the bk), and paid almost no taxes! I am making money this year and am going to be paying some real taxes!!"

    So then he asked, "Ok. So what do you think your tax rate is?" I said, "Usually, my all-inclusive tax rate-- Fed, State, city, SE-- everything combined is at least 30% of my net." So then he took my net income for the past 6 months, figured out what 30% was, deducted that amount as an expense, and said, "Ok, you're under the median income and are negative about $200 a month on the means test. You're good for Ch7". With that, he told me how much money to bring with me to the next meeting, gave me a few more documents to get together, and told me to make an appointment to come back and file.

    I had no opportunity to talk to the lawyer, but I am real uncomfortable with this guy's m.o. Hearing him say I am good to go for Ch7 wasn't particularly reassuring.

    Thoughts anyone??

    #2
    I haven't been to a lawyer yet - but that seems like a major red flag. Try to get consult with a different office.

    Comment


      #3
      It is standard practice to use last years taxes but since you income has changed then you'd use current numbers on your pay stub for things like social security and medicare. As for Federal and State taxes you have to figure out what your total tax liability would be and divide it by 12. You can't just use the numbers on the pay stub because some people withhold more than others. Being accurate is important.

      Personally there's nothing wrong with a Paralegal or assistant doing your paperwork as long as they know what they're doing. Based on what you said you don't have much confidence in this guy. If you stay with this attorney then you're hoping the attorney will fix whatever mistakes this guy makes. Personally I'd find another attorney. I went with a bigger firm. I met with my attorney for free consult, which is the way it should. He did the numbers, explained the process and answered all my questions. After I completed the packet I met with his staff and they too were knowledgeable. I think others will agree that you need to be confident in your attorney and staff or this is going to be a PAINFUL process.

      Also others will tell you that a lot of attorneys have been jumping on the BK bandwagon and hiring paralegals to do all the work. So in reality they don't have a clue. I would check this site for a local attorney



      or try to get recommendations from people here...

      Comment


        #4
        Originally posted by chad9162 View Post
        It is standard practice to use last years taxes but since you income has changed then you'd use current numbers on your pay stub for things like social security and medicare. As for Federal and State taxes you have to figure out what your total tax liability would be and divide it by 12. You can't just use the numbers on the pay stub because some people withhold more than others. Being accurate is important.

        Personally there's nothing wrong with a Paralegal or assistant doing your paperwork as long as they know what they're doing. Based on what you said you don't have much confidence in this guy. If you stay with this attorney then you're hoping the attorney will fix whatever mistakes this guy makes. Personally I'd find another attorney. I went with a bigger firm. I met with my attorney for free consult, which is the way it should. He did the numbers, explained the process and answered all my questions. After I completed the packet I met with his staff and they too were knowledgeable. I think others will agree that you need to be confident in your attorney and staff or this is going to be a PAINFUL process.

        Also others will tell you that a lot of attorneys have been jumping on the BK bandwagon and hiring paralegals to do all the work. So in reality they don't have a clue. I would check this site for a local attorney



        or try to get recommendations from people here...
        Actually, I already hired another attorney and paid him in full before I realized he knew nothing about bk and small business ownership. I chose this attorney because he was recommended to me by another attorney as someone who had considerable knowledge in the area of small business and bk, and I spoke with him for at least a half an hour on the phone and thought he was terrific. In total, I probably spoke to 7 or 8 attorneys, and this guy was the one I had the most confidence in. Unfortunately, he was not the guy I met with today.

        I failed to mention in my post that I am self-employed so there are no pay stubs with deductions-- and last year's tax rate only applies to the minimum quarterly tax payments I am required by the IRS to make this year. It has nothing to do with what I'll actually end up paying this year.

        I think that what I am going to do right now is contact my accountant, give him my ytd net income and ask him to figure out what my annual taxes would be if the rest of the year looks anything like the first quarter. I don't know any other way to do this that would be any more accurate.

        I am, after all, the person who started the thread "Wildly Fluctuating Income". This is so hard to figure out . . .

        Comment


          #5
          Originally posted by kathy4530050 View Post
          Actually, I already hired another attorney and paid him in full before I realized he knew nothing about bk and small business ownership. I chose this attorney because he was recommended to me by another attorney as someone who had considerable knowledge in the area of small business and bk, and I spoke with him for at least a half an hour on the phone and thought he was terrific. In total, I probably spoke to 7 or 8 attorneys, and this guy was the one I had the most confidence in. Unfortunately, he was not the guy I met with today.

          I failed to mention in my post that I am self-employed so there are no pay stubs with deductions-- and last year's tax rate only applies to the minimum quarterly tax payments I am required by the IRS to make this year. It has nothing to do with what I'll actually end up paying this year.

          I think that what I am going to do right now is contact my accountant, give him my ytd net income and ask him to figure out what my annual taxes would be if the rest of the year looks anything like the first quarter. I don't know any other way to do this that would be any more accurate.

          I am, after all, the person who started the thread "Wildly Fluctuating Income". This is so hard to figure out . . .
          You could also use online calculators like HR Block to see what your tax liability would be. As for business if you are Sole Proprietor it should be easy.

          I'd called the attorney and address your concerns. Was this the free consulate or was this guy just preliminary. Its odd that a good attorney would hire someone so incompetent especially when he's the first person the client meets. That's bad business IMO.

          Comment


            #6
            Originally posted by chad9162 View Post
            You could also use online calculators like HR Block to see what your tax liability would be. As for business if you are Sole Proprietor it should be easy.

            I'd called the attorney and address your concerns. Was this the free consulate or was this guy just preliminary. Its odd that a good attorney would hire someone so incompetent especially when he's the first person the client meets. That's bad business IMO.
            Good advice. I think I'll give the guy a call now--it IS bad business and does nothing to bolster my confidence in this guy's operation.

            Comment


              #7
              He's an attorney!

              Sorry, couldn't resist adding this little piece of info. I just called the attorney's office and asked to speak to the guy I thought I was hiring and spoke to his receptionist. She wanted to know what the issue concerned, and so I told her I met with Mr. R's paralegal, Mr. F--and she corrected me--I met with ATTORNEY F! F is not a paralegal--he's an attorney in the practice! Good Lord . . .

              Anyway, she forwarded my concern to Attorney R and he would like me to come in again and he will calculate my income and do the means test. Good.

              I really do want to come in under the median or pass the means test, but the process has to pretty kosher or I don't trust it.

              Comment

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