FINALLY! Met with an attorney today!!! IS this legit?

[LostNFound]

Ok...so the bad news first......
We make about 10K too much to qualify for Chapter 7 bankruptcy. The lawyer said that there is some room to work with that since I'm self employed, but he likes to start at the worst place and work back from there.

BUT!! The other news that sounds too good to be true....
He said that it looks like we may qualify anyway for a Chapter 7 because our business debt is actually higher then our personal debt. That automatically makes this work for us. BUT, again, there is some room in these figures to move because we have 100K in credit card debt and he said it would be hard to prove some of those expenses. We used convenience checks to help pay taxes, payments and repairs in hopes of selling the properties and paying off the cards--but that obviously never happened. Realistically, the credit card debt is probably shared with business and personal.

My truck is a lease. The lawyer said we can try to finance it right now, before filing. We have a pretty good relationship with our credit union, but I'm not sure if they will work with us or not. We will work on this tomorrow. We want to keep our leased auto if we can so this would be huge if we can pull it off before filing. Our lease isn't up until September so I'm not sure if an early buyout will work.

Finally, he told us that we should start using our tax return for actual expenses that would be considered exempt and then not spend our paychecks. He said it's not about HOW much money we have, but where it comes from. So, I guess we start spending on what we can from the tax return. He said to keep it in a separate account so it doesn't get mixed with our regular incomes.

He also quoted me $3000 to do the BK for us. His website said $2000K for some situations, but he told us we have a lot to work with on the business side of it so he will charge more. Does that sound right?

His credentials say he's a member of the NACBA (is that a good thing)? I'm not sure if I can totally trust all of his advice. It sounds too good to be true. I've been burned before....does this sound like it would work? Or is this going to be another bad situation??

[StartingOver08]

.


Finally, he told us that we should start using our tax return for actual expenses that would be considered exempt and then not spend our paychecks. He said it's not about HOW much money we have, but where it comes from. So, I guess we start spending on what we can from the tax return. He said to keep it in a separate account so it doesn't get mixed with our regular incomes. ...

... Does that sound right?

His credentials say he's a member of the NACBA (is that a good thing)? I'm not sure if I can totally trust all of his advice. It sounds too good to be true. I've been burned before....does this sound like it would work? Or is this going to be another bad situation??

Have you checked your exemptions for cash in your state? I don't see how he can say that it does not relate to how much cash your have in your accounts, only the source of cash. Is he filing a non consumer BK 7 for you?

[nerves]

The cash exemption in Iowa is $1000 (it is the wildcard) for each (husband and wife). You are correct with the bk and Chap 7 with business debt, if the business debt is more than personal debt you can qualify for a 7 if you have enough expenses.

Just be careful with financing the truck you have on lease. It isn't the transaction - it is the cost.

As for the fee, you could be on the money due to the complexity of your case. However, I would have him state this is an all inclusive price so you are getting hit left and right with additional fees.

I can tell you that our trustee didn't bat an eye at any of our bank statements or question anything where the funds came from, etc. Never questioned the purchase of a new stove and deep freezer or the large amount I spent at Walmart to stock up on daily household, personal supplies, etc. I guess it is best to walk on the safe side of the sidewalk.

[LostNFound]

I guess he probably is filing a non consumer BK 7. I don't know for sure because he said there are still more numbers he has to look over. He also made it sound like we needed to get our lease buyout figured out prior to filing. Yes, he did mention that we had to be careful when purchasing the lease. He said we can use our paid auto as collateral against it and we have $14K exemption on autos combined. Since the 2 autos would be tied together, it somehow works? I may be missing the real point to this situation as I'm still trying to understand all of it right now.

Our tax return is not here yet and it's going to be just shy of $10K. I am a little worried about HOW we can spend that down in just 2-3 months time. But again, he told us to save our paychecks and spend on necessities from our tax return. Seems like a lot to do in a short amount of time. Especially because we've gotten used to holding back the spending.

The only concern we still have is the issue of a title that was transferred to my mother on a camper that we sold her in Jan 09'. There will be a question as to the true value of it and the lawyer didn't seem overly concerned. Yet, he didn't have a solid answer for us with regard to the way the trustee would handle it. It books for double what my mother paid for it. However, there was hail damage and a leak that she had to repair. I can honestly say that she got a good deal from us, but not one that I viewed as TOO good of a deal. My mother has been generous with us over the years and I didn't think about it too much at the time. I just worry about that coming back to haunt us and I'd rather prepare for it now and try to deal with it myself then to have them go back to my mother and ask her for the title or the MONEY. That's my biggest concern. I want my family and friends left out of this equation and I'm a little worried about it.

Another odd thing that we hadn't considered....we sold 2 of our rentals. Had we kept them, we would have no issues trying to prove our business debt vrs. personal debt. We have been anxiously trying to sell the houses, but the lawyer said to forget about the sale of any of them and to stop mortgage payments when we decide for sure to file. He said we need to continue to make insurance and tax payments since we are still technically responsible for the property at this point.

Any idea's on the credentials? Does he sound like a legit lawyer? I only asked because he is several hours away from us and I don't know a thing about him. I can't find anything negative online, so how would I know if I can trust his advice?

[nerves]

Another item to verify is if he will be attending your 341. If he is a distance from where your meeting is held, that may be another factor to consider. With all that you have going on, it would be best to have your lawyer present at the meeting. My understanding is the location of the 341 is determined by your address - not where the lawyer files. Your business situation will most likely be questioned in regards to the assets, etc. I know I was very grateful our lawyer was there because our local banker showed up (they funded the SBA backed loan).

My understanding of the vehicle exemption is based on each vehicle - you can't combine the values. They will each have a seperate appraisal value. The trustee will determine how they want to address if you are high on one and low on the other (equity in them). They may turn a cheek to it or ask you to pay the difference/make an offer.

As for spending your money, you have probably seen the posts with ideas, but here are a few: get your health, eye and dental check-ups/work completed, stock up on household supplies, home repairs (if you are keeping your home), vehicle repairs/new tires, stock up on groceries, have your insurance premiums up to date, reasonable clothing and shoes for the family and pay your legal fees. You may be surprised how fast you can go through $10k.

[HHM]

Honestly, the 341 meeting is NO BIG DEAL, nothing can happen there. There is no decision that is made and the trustee cannot take any action. Frankly, the attorney only attends because of expectation, but there is really nothing to do.

[LostNFound]

With regard to the autos....Again, I'm new to all of this so my explanation may only be partially correct. My husband's truck is not paid off until November. The lawyer suggests that we try to finance his truck and my lease truck together. Then, use one auto exemption against that one loan (2 autos). Then, use the 2nd auto exemption against a motorcycle of ours (which I don't care about, but the lawyer said it's part of the bk planning).

I will see if he's going to the 341 meeting. Good to know that it's not terrible if he says no, but I would like to know that.

Exemptions: The lawyer told us to spend the money on clothes, but only things that are a necessity (socks, underwear, shoes). He said we have to be cautious to not have a closet full of recently purchased name brand things. He said we should see if we can make a month or 2 of payments to our mortgage company for our house (we are current, this would be additional payments). We can pay insurance, taxes, auto repairs and gas.
Food: With regard to this one, he said we can buy food. But I'm wondering if I can buy a small deep freeze and fill it with meat? I have a daycare and my freezer broke in 2007 and we've never been able to afford a new one. It would be great to have hamburger and things on hand instead of running to the store 3 times per week. I can easily purchase a ton of food and my family and daycare would eat it. But my concern is that our "history" of food expenses is less for the prior 6 months. I'm not sure if that's a red flag?
I also have a daycare assistant that I pay $50/month. I'm wondering if I can prepay her for the rest of the year? And this is a question I was going to email the attorney about too.

Again, just curious HOW I know if this attorney is a "good" attorney? Is there certain credentials that I should be looking for?

[nerves]

I don't know of any credentials to look for. How long has he been in the biz? If he has several years of experience, I would say that is a good indicator. Also verify if he directly answers your questions and what the timing expectations are for returned calls, emails, etc. Lay the ground work up front on what you can expect for service from him. Will he answer the creditor calls? What if you have issues with those that discard the stay and continue to contact you or withdraw funds after they have been notified? The reason I bring the last up is because we had issues with both. Our lawyer addressed them but didn't charge extra for it. To make a long story short, we had a leasing company supposably change hands and the new company continued taking withdrawals from our checking and contacting us. It was a pain to get this resolved. It took three months!

[LostNFound]

I think he's been practicing since 1995? He graduated with "distinction", but maybe they all do! haha... His website says he works only with BK's.

Well, so much for trying to combine a loan between my current lease and a truck that we own. Our lawyer suggested we get a loan and combine them. Umm....not paying credit cards for a year and having those 5 "charge offs" on my credit report--yeah, lets just say I'm not winning anyone over with my less then perfect credit! My husband seems to think we need to try our local small town bank because they know us. That's exactly the reason I want to avoid them. ugghhh....