Help...need questions answered fast please

[MarieT]

Also, I just looked up our house on Zillow..it is showing the value as$65,000 under what we owe so I guess that is a good thing for BK!

[keptdigging]

Am I missing something?
Isn't under/over median income just the FIRST step of the means test? If you're under, stop, you pass. If not calculate based on "allowable" expenses. Since those expenses include mortgage payments, the results should vary widely for the same level of income.

Or is this a district by district thing?

Or did her first atty simply s*ck?

[MarieT]

The first attorney basically just said that since we were over the median that we were Ch13. I told him that I had done the means test several times online thru a couple of different online sources and every time it came out that we qualify for Ch7. He said that those tests were unreliable and we needed to do Ch13. He said after we got into it if there was a way we ended up qualifying for Ch7 we could switch to Ch7 and pay the fee to do that. After meeting with the other attorneys, it made me think he was just about pushing this through as quickly as possible and he did not want to do whatever work necessary for a Ch7.

So, to answer your question, I think the first attorney was crummy. The website is misleading as it says first consultation is free. Since I spoke to him for 5 minutes on the phone before meeting with him, he said that was the "free consultation". So I think getting away from that attorney losing only $300 is good in the long run although I sure cannot afford losing any money right now!!

I intend to get everything filled out on the expense forms in the next couple of days so we can move forward on this. I am having a horrible time the last couple of days with the whole idea of BK when I thought I had kind of made peace with it. Not sure why but hopefully once we know for sure what we are doing I can calm down.

[Depressed]

First attorney I met with said we we're a CH13 case without even running the numbers simply because I was over the median income. Found another attorney and am filing a Ch7.

The attorneys make more in a Ch13 case.

[SMinGA]

Thanks for the mini-update Marie. With regards to the other consultations, are you feeling any clearer about your possibilities regarding 7 vs. 13?

[MarieT]

All of the attorneys I met with said I needed to fill out the actual expense paperwork and we will go from there. I know we are really close to be able to do Ch7. One attorney suggested that since my husband is not paying into his 401k that if we are short to do the Ch7 that he could start doing that. Another one said that life insurance is also an approved expense and we could start paying for a monthly life insurance premium, which we should certainly have anyway since if anything happens to my husband, the kids and I would be in a really bad situation.

Also, when I was still trying to stretch the money as far as possible when I was still paying all the creditors, I reduced our car and house insurance by really increasing the deductibles to the point where I'm worried constantly about even driving the car so could probably put that back where it was and increase that expense.

I really think a trustee would just think we are doing it just to get Ch7 though since we would have no record of having it prior to this. Has anyone done something like and then qualified for Ch7? I just need to get the paperwork done and move forward. I have to get all our tax info together so I guess I can kind of do both at the same time.

[SMinGA]

The items you mentioned - life insurance, adjusting car insurance deductibles - seem like reasonable steps leading to a financially sound future. That is the idea of bankruptcy, I think. Otherwise you come out no better off than when you started. I'm not saying to take out a few million in life insurance - but a reasonable amount based on your living expenses/income...

The way one lives when leading up to bankruptcy (cutting out anything & everything you can do without for a little while) is not the way one is expected to live after.

[MarieT]

Thanks SMinGA. Before I lost my job and we had plenty of money, (only a memory now), we always had life insurance on both of us and a reasonable deductible on the house and cars. We also had a savings account, paid into a 401K, and paid extra on our mortgage principal and now we have none of those so it is pretty scary.

On another note, I so want to be able to do the Ch7 and someone said on another thread that if you use a credit card for business that then the whole credit card may be business debt so maybe that willl help us too. Some bad bookkeeping on my part since we specifically took one card out for business (even in business name) then started using that card for personal expenses but we also needed to use the card that we had "room" on when we were short to be able to make house payments etc at the time.

We also started using our other credit cards and our checking account line of credit for business expenses too so it is all mixed up at this point and I would not even begin to be able to sort out how much of the expenses on each card are personal and how much business.