Is it really this "easy"??????

[cfgdag]

Our situation is pretty cut and dry. We have a house with a second on it, 2 car loans and approx 50K in debt with credit cards and a line of credit. We are current on all bills but struggle every month and find outselves selling things to pay the bills (as well as our parents helping out occassionally). We decided we need to do something to get rid of this debt...it's obvious we are just spinning our wheels and not paying off any debt my making the min payments.

I met with an attorney last week regarding bk. I originally went in thinking we would have to do ch13 since our income is high (100K for a family of 4). The atty did a means test and said we are more than able to do a ch7, the means test showed we are approx -500 every month. I was happy to hear this (as happy as someone can be that is filing for bk). He seemed very confident. I said, okay what if we do all the paperwork, file and for some reason something happens and we need to do a ch13. He said don't worry about it, it won't happen. He gave me a packet to fill out. He said bring it back along with the funds and we can get this thing going. He did recommend waiting until August to file since I had a 2K bonus from work in January, which would show on our 6 month look back right now.

Am I over-reacting by being scare and cautious? Am I wrong for thinking this was too easy to get rid of the debt? Our atty seemed very confident....is that a bad thing?

[justbroke]

Am I over-reacting by being scare and cautious? Am I wrong for thinking this was too easy to get rid of the debt? Our atty seemed very confident....is that a bad thing?

You are over-reacting. You have a confident and skilled attorney who says no problem! You are also not wrong for thinking it's easy to get rid of debt.

When you're at $-500 disposable income by your Attorney's calculation, he can be very confident. Even if the Trustee found one or two things.... they'd have to add up to at least $680+ in order to move you to a Chapter 13. This seems to not be likely in your case! Some people who are over-the-median come to their Attorney and have (+) $110 in disposable income. That is just too close for comfort as the Trustee only needs to find a couple of things to push you towards a Chapter 13.

[cfgdag]

I guess I keep thinking maybe he entered a figure in wrong (or something like that). But he gave me the print out of the test and everything looks in line with what I gave him. There were items on my list that were less then the "allowed" so just just used the allowed. I feel my atty was being totally honest with me but I don't deal with attorneys everday..... This atty was referred to me by the corporate atty here at my work so I am confident he is good.

Is there anything that could cause a bump in the road? With what my atty said, is it a sure thing the ch7 will be a success? I guess I keep thinking something will happen and it won't go thru.....

Also, once I give my atty the paperwork how long does it usually take for the filing to occur? What's the average time span from when I pay my atty and turn in paperwork until the ball starts rolling?

[bkfdrusa]

Your income is 100K for a family of 4 and you have -500 per month in means test?. How?. I think in means test you should not take into account unsecured debt payments.
I do not know which state you live in. But as long as your lawyer is confident, you can go ahead and file. In the worst case, you get converted to ch 13.

[cfgdag]

This atty figured approx 91K for income this year from our paystubs. We have 2 mortgages on our house, 2 vehicle payments, and 1000 in childcare every month. Then add vehicle insurance, clothing, everyday living expenses, auto maint expenses, groceries, health care expenses, life insurance, utilities, etc....

On my paper it says:
Current monthly gross income of 7620.00
Total of all deductions allowed of 8091.01
Monthly disposable income of -471.01

[justbroke]

What most people don't realize is that an over-the-median income debtor can file Chapter 7. The reason is, because most over-the-median income debtors have serious mortgage payments (on a first and potentially second mortgage/HELOC).

Without these high mortgage payments, the over-the-median income debtor wouldn't qualify for a Chapter 7.

[cfgdag]

Ya, our mortgages are pretty hefty. Our first mortgage is 2035 and our second is 308...making our grand total to 2343.00. Quite a large number

[Frshstart09]

It can be that easy. I myself was almost 20K over median for a 2 person household with 2 mortgages and two auto loans and it seemed to go pretty smoothly. Good luck!

[liz417]

Ahhh yes, I'm another over the median income filer that qualified for a ch 7 (two person household). My mortgage is $2k per month (which I don't think is a lot of $$ for Ca.), but that and a few other over the Standard expenses put us in the (-) too.

Good Luck!

[Rick9972]

Ahhhh yes I am also a over income filer. It was the mortgage on the rental property that pushed me over the hump.

[gowiththeflo]

You mentioned rental property and my eyes lit up! I'm trying to find out what will happen to my rental property which is the only thing I own with any equity (about$40,000) and more importantly the tenants who have a three year (2 left to go) lease with an option to purchase at the end. I havent had the 341 yet.

[2manybills]

I'm another over median filer in So. Cal. 1st & 2nd mortgages total 2900 per month, not including property taxes of $532 a month. It seems average in So. Cal, and in South Orange County, I know some folks are paying $15K to $20K a year in property taxes.

[frogger]

What most people don't realize is that an over-the-median income debtor can file Chapter 7. The reason is, because most over-the-median income debtors have serious mortgage payments (on a first and potentially second mortgage/HELOC).

Without these high mortgage payments, the over-the-median income debtor wouldn't qualify for a Chapter 7.

Our income is about 25K per month, and I don't foresee any problems with going with a 7. We're upside down, and have more outgo than income. I do believe that "poverty level" should apply to us.

[Moneypenny]

to the original poster: your quick account of your income and expenses looks very much like you qualify (although in a vague way of course) and i am sure your lawyer is right.

however: make sure you are accounting for ALL sources of income in the last 6 months. Including gifts from relatives and friends. Make sure you make any gifts that have checks, deposits, anything documentable, make them clear to your lawyer if they happened in the last six months. Also, stop recieving any documentable gifts until the bk is over, or else any gifts whatsoever. You can, like with the bonus, make any extra income "go away" by waiting to file to get it out of the six month window. you might also consult your lawyer about when you can stop paying the cc debt: you dont have to wait until the bk to begin reaping the benefits of a bk! you only need to be sure you are going to do it.

mmp

[2manybills]

I was a little concerned on our Schedule J because we only have 2 payments left on one of our cars. But we are showing -$352, so even if the TT asks about it, it would still only push our DMI to +16. Nevermind the prices of everything is skyrocketing.