One Step Behind - Another bad choice, bad decision?

[indeepwater]

I've been to several attorneys and did some research, and decided chapter 7 was the only way I could go due to the $ amount of my secured debt. This attorney recommended and had high confidence since the secured debt ratio was higher than the unsecured debt, I had a slam dunk case with a lot of paperwork because of my multiple properties (business), but it was going to through reasonably quickly with hardly any questions about my high income even though I'm not even close to passing the means test. Seemed like it made some sense and was what I wanted to hear, but after much review on this site and others, it appears that my disposable income is still a major factor and that this case will definitely be scrutinized as I'm above the median. It doesn't even appear that I qualify now, and feel like I've made another bad decision among so many others. I've committed to a retainer and paid about a third of it. Since there is no guarantee, it appears I'm stuck with going for this or does anybody know if I have any other choice? I'm new to this forum and bankruptcy for the most part, and really feel like my head is spinning, please help if you have any comments as I feel pretty low right now and sinking deeper and deeper. I'm in California as I know things are different in each state, at least I have some nice weather and a great family....trying to find things to be grateful for.

Thanks.

[aces67]

How far over the median are you? How much disposable income do you have leftover?

[SleepWellNow]

I don't understand why you are doubting your attorney based on reading the forum. Although there is great infromation here, your attorney has all your facts and will best know what you need to do. We filed a Non-consumer Chapter 7 BK (business failure) and have several rental properties. Our attorney said in a Non-consumer Chapter 7 BK, it doesn't matter how much money you make. You can make a million dollars a year. We qualified for a Chapter 7 based on our secured debt vs. our unsecured debt. Our "upside-down" rentals saved us otherwise, we wouldn't of qualified under a 13 or 7 (too much secured debt). We had to supply a tremendous amount of paperwork (P&L's on 3 businesses and 4 rental properties plus 12 months of bank statements, business and personal). The amount of time spent putting it all together was well worth it. Our 341 went smoothly and we were discharged about 62 days later. Hang in there and talk to your attorney. Things may be better than you think.

[indeepwater]

Thank you

As you could see from my post, it was late at night, and the reason I'm doubting my attorney, is that after our initial meeting, she called me in the evening yesterday and was telling me that my disposable income was too high after all my main expenses. She told me to look for some more expenses and left a message and I laid in bed after first being relieved that I got this process started, and then getting that call from her with uncertainty really shook me up. And then I came in here and read all the chances for high income people is very low, and I feel a little better getting your response. I'm meeting with my attorney in a couple of hours to go over the specifics and get some more information on how much of a concern she has. I currently have some equity in a car that's paid off and can go out and buy a new car as my credit hasn't gone bad yet with this being my first month of missing my house payments and 3 of my rental properties and I'm keeping 1 property. I'm saying this so I could increase my expenses, not really that I need a new car, but now I'm worrying if this doesn't go through, I'm making my situation even worse. I just don't know who to believe any more, but I felt a little better reading your post confirming the secured vs unsecured. It was my real estate business and all the properties I bought "under market" are upside down and I've had to lower rents, and even got a nice vacating gift of fleas and mold from a tennant that started this downward spiral along with the economy, I'm so far upside down right now, I can't even see straight. My credit's never been bad, and I'm going from great credit to a bankruptcy and it was helpful to read others on this site that are in the same situation. Not so much that misery enjoys company, but there is so many great experiences, but I'm learning as you pointed out that every situation is different. I will continue to do research and provide the best information I can to my attorney, but I'm really very much on edge and I have to stay as calm as possible, and not panic on everything I read. This has been an anxiety roller coaster and one minute I feel relieved, the next I feel like I'm falling apart. Your email was very helpful and I appreciate your sharing and especially the encouragement to hang in there.

Thanks,
Art

[indeepwater]

Hi aces,

I'm calculating this right now to a better number, but it was about $2500 before credit cards. After credit cards there was still some left after paying minimum, but I've been trying to pay it down and transfer to lower interest rates, which I've heard looks really bad. Also, what the model doesn't calculate is the lower rents, the slow paying tennants, the big investment I need to make in Sept with the mold in one of my properties that set me back about $10,000 in one month. I also have a tennant who I would kick out under normal circumstances, but since the property needs a ton of work, and the rents have dropped so much, it makes more sense for me to keep him. But my credit cards have maxxed out and any little thing puts me more in the hole. This is some scary stuff, but I'm trying to make the most informed decisions. Thanks for your interest.

[SleepWellNow]

Remember, your attorney does this day in and day out. She can help you with the numbers and help you to include ALL expenses. It sounds like she's getting all your ducks in a row for a smooth BK. My attorney had me prepare a P&L for each property. Not only were the values upside-down, I was in the hole each month on every property. You're at the beginning stage. It was all confusing to me until I started getting the paperwork together and we ran the numbers. Then it all fell into place.

[jonance]

Hi Art,

I'm in your same situation and getting ready to file here in a few weeks. I first met with about 3 attorneys several months ago and was right where you are. My problem is investment properties and aside from that my wife and I make about $80k per year. I will be filing individually and through this site and my attorneys, I have really come to understand the process...the problems, etc. Even though i haven't been there yet, i might be able to help....but there are also many others on this site to help guide you.

Hopefully you have no reason to be alarmed. I also thought i would have WAY too much disposable income. I probably did...i did website design on the site and have stopped it completely to put me at $80k for my wife and i combined. Then i finally stopped worrying and started dummying up a schedule J. Well i was about $300 DMI. Didn't like that....so start adding expenses. Since the wife isn't filing, we sold her car and got a new one. $15,000 for a 2008 Kia on a 3 year loan. $475 a month. That put us in negative. We also didn't have life insurance. $97/month policy each. After those and really figuring out what we spend on stuff.....I am about -$550/month.

From what i understand due to the fact we are non-consumer, the scrutiny and presumptions of abuse don't really happen. They cannot dismiss us under 707b. Only the totality of the circumstances. As long as you don't have alot of DMI, you (and I) should be ok. I've come to grips with it...but was where you are, not sleeping and not eating, a couple of months ago.