Major confusion about attorneys advice

[Fireguy]

My wife and I met with an attorney today to discuss the possibility of filing a Chapter 7. Wife's hours cut, raises froze for myself and expenses have gotten ridiculous. Van was repossessed this past Friday. We had bought a new vehicle in January as everyone told us to get a new vehicle before filing. The attorney told us we barely met the Chapter 7 threshold after doing some figuring. He told us he could file a 7 but told us that he would not sign the reaffirmation on the new vehicle.

We are moving to another town where I am going to get a considerable raise however my wife will lose her employment. We plan on reducing our cost of living considerably. The attorney advised us to wait until we move, rent a house, let our house go into foreclosure, stop paying all of our credit cards and then file after my wife has been out of work for about three months . Does this sound like good advice? I am perplexed.

[justbroke]

You have too many things going on right now for a clean case. It may be worth waiting until you're settled in your new location with new job(s), address, rent, expenses, etc. However, if you're "reducing [y]our cost of living considerably" then this may not be a good thing. You really need to work the numbers for where you are now, and where you will be.

See which works better. Especially if you're over the median!

[BrokeOR]

You should chat with your attorney to get the exact meaning of his suggestions. If you are borderline Chapter 7 but it can be done, then having three months of lower income as part of a 6 month "look back" might be beneficial to you. Again-ask him to clarify. That's their job and a reputable attorney will do it happily.

[Fireguy]

Thanks for your responses; needless to say this is a very trying experience for my wife and me. After thinking all of this over and talking to some friends that recently went through the same experience I have got a feeling the attorney we used is running a bankruptcy mill. He told us they were seeing 50 clients that day. We spent most of our time with a rude paralegal that seemed very short with us when we tried to explain things. Also, he did not discuss our expenses such as daycare and what we spend on food, misc items. I truly believe they saw that our case would be somewhat complicated and just wanted to get us out of the office to deal with the easier ones.

I’ve got a couple of questions that I hope you can help me with.

If our house is foreclosed can we file bankruptcy against the deficiency after the fact?

As we have seen recommended, we bought a new vehicle for my wife prior to all of this starting and are worried we will lose this through the process. Will banks do a ride-through on these or must we reaffirm? The attorney we saw said he does not sign reaffirmations. We have got to keep at least one vehicle. He made it sound like we would lose both.

My wife is putting her notice in tomorrow and we are about to become a one income family so we can move. Hopefully once we drop her pay this will become more of a viable solution for us. Thanks for your suggestions.

[LSUTiger32]

As we have seen recommended, we bought a new vehicle for my wife prior to all of this starting and are worried we will lose this through the process. Will banks do a ride-through on these or must we reaffirm? The attorney we saw said he does not sign reaffirmations. We have got to keep at least one vehicle. He made it sound like we would lose both.

First of all I would say to you that if you are going to be seriously making a lifestyle adjustment like you said in your previous posting I would consider turning BOTH vehicles in unless you have PLENTY of room in your new budget. Use the oppurtunity to make a clean start, not to be saddled with a rip-off car loan right from the start. You can get a car without a car note and you can certainly find a reliable car that isn't brand new off the lot.

That said, if you do think that you can handle the car payment and your attorney will not sign off on it, you will have to prove to the judge that you have the income and means to pay what the re-affirmation agreement commits you to. I had the same issue and they will schedule a hearing for you to go in front of the judge. I had to show the judge my budget which was not an issue since we both work and have a good income. Once I showed him that without all of the real estate payment we had a lot of room in our budget he reluctantly signed off on it. It is not easy and you will have to prove beyond the shadow of a doubt that you can afford it. It was not an easy sell even though we had A LOT of room in our new budget.

[BrokeOR]

It sounds to me like you need to either get a different attorney or schedule another appointment to clarify your issues. Have you actually retained them? I found that only after I retained attorney did the real answers come. I'm actually with a firm that many would call a "mill"-very large and because of economic conditions, very busy. My firm, however, has dozens of very sharp paralegals who answer all my questions more than once, if I need it. I also can make a phone appointment to speak with my attorney, if needed, and I've done that as well. POINT: "Mills" can be good, as they deal with the Trustees all the time. But you have to know how to use their resources and feel comfortable with them.

As far as your house...I think there are laws (a 2007 one in particular) that deal with deficiencies. Ask your attorney, but it is very possible that you will not be liable for deficiency "income" on your home.

[Fireguy]

(Update)

We attended our 341 hearing today. After my last post here we went to a different attorneys office who found after doing the full means test we were quite eligible for the Chapter 7.

We had a small glitch at the 341. Our arrtorney didn't attach my wifes last 2 months of income on the schedules so they scheduled another date to have it updated a month from now. We don't have to be there for it. The attorney at the hearing told us it was no big deal, however I can't be a member of the 60 day club. It is going to be the 90 day club for us it appears. I'm really not sure though because we called our main attorney after the proceedings and he stated he would send it right over to them and they should accept it since it was filed the same day. We'll see.

[tiredmimi]

Fireguy, I must ask where you live? I live in Tennessee and the bankruptcy mill and rude (male) paralegal we went to the 1st time sounds the same. In fact when we did go in to see the attorney for a brief 5 minutes, he stated you guys have a lot of unsecured debt, which we all but ran out of this office as that is not what you expect to hear from a bankruptcy attorney you are about to hire to represent you. We have since found another who seems much more compassionate and much nicer to work with.

[Fireguy]

This attorney was located in Norcross, Ga. After the fact I found several people that had problems with this particular group of attorneys. When we told our current attorney about our discussion with these folks he began to laugh when I told him who they were. He said they had several clients come in that had similar problems with them. He confirmed that they were a bankruptcy mill and only wanted to deal with easy money cases.

[ssmdem]

How do you actually determine if an attorney is a "mill?"

[tiredmimi]

Sounds exactly like the one we saw the first time in the Nashville Tn area. The way you kinda know they are a mill is it is usually a huge group of attorney's with different satelite offices. Our experience was they just plug numbers into the software give you a quote and are not worried about what your circumstances are or how you are going to make it. Our attorney that we have now is a 2 attorney office. We spoke with him for about 2 hours thouroughly explaining our situation and he was very thorough about a lot of things before we ever was sent in to see the paralegal to do paperwork. He also explained that he only takes on so many cases at a time and does not take everyones case. They are very prompt and explained that if they are retained that they file within 30 days because after that all of the numbers change. We filed on Tuesday, and I just hope ours goes through as planned. It is going to be tight but we knew this going in. The bk mill we went to the first time plugged us into the software and told us our payback percentage would be 68%, our new attorney has us at 29%, big difference when there is 110,000 of unsecured cc debt. Big difference, so be very careful in choosing your attorney!