The Absolute Worse News Ever!!!

[Ann]

Just received word from my lawyer that because of my income we cannot file a 7 and worse than that because we have too much debt we cannot file a 13 either!!! His only advice was for me to not work for the next several months to get my income down and go from there. With all of my monthly expenses he said that wont even help. Waiting several months will surely bring about a lawsuit. In all my wildest dreams I never imagined this. Is there anyone who can offer any advice to me. Please!!!

[calgirl67]

what are your numbers? ie: income, expenses and debt?

[blockhead]

Just received word from my lawyer that because of my income we cannot file a 7 and worse than that because we have too much debt we cannot file a 13 either!!! His only advice was for me to not work for the next several months to get my income down and go from there. With all of my monthly expenses he said that wont even help. Waiting several months will surely bring about a lawsuit. In all my wildest dreams I never imagined this. Is there anyone who can offer any advice to me. Please!!!

IMO all is not lost by any means. My atty said she could go into court and ask for a 3 mth extension on any lawsuit due to preparing a complex bankruptcy. Suggest you ask similar question to your attorney.

Also if you answer any summons that should buy you some months there anyway.

[Moneypenny]

yeah tell us the details of your situation. income looking back 6 months, income looking forward six months, your total unsecured debts, your mortgage expenses, utilities, food, etc. family size, all that

[justbroke]

Hi Ann, I've been in similar situation and went into Chapter 13 after expecting a Chapter 11, and then and now, in a Chapter 7. I'm high income, high unsecured and secured debt and am moving through the process.

What do you really want to know? What are your unsecured/secured numbers and income. Are you surrendering property in the bankruptcy?

[Ann]

Thanks for the reply... it isn't pretty but here goes..Gross Wages:$7700 Monthly: Family of 4 living in Michigan: Mortgage Balance on First: $193,000 (SEV $203,000) Second $68,000.. Unsecured Debt:$211,000
Mortgage 1st:$2314 (includes taxes and insurance)
Mortgage 2: $355 (temporary mod will end in September then $710.00)
Car 1: $470 (paid in full in 4 months)
Car 2: $349 (paid in full in 6 months)
Heat: $188
Electricity: $129
Phone & Internet & Cable: $71.00
Cell Phone: $170.00
Food : $1000
Health Insurance :$336
Life Insurance : $168
Student Loan : $108
Clothing: $80
Auto Insurance: $180.00
Entertainment: $170.00
Gasoline for cars (includes adding in expenses such as oil changes and such) $700.00 (1hour commute to work to and from each way)
I can see a surplus but this doesn't even include our income taxes we pay... anyone???

[justbroke]

I don't see where you don't qualify for a Chapter 13. Your unsecured, if you include the 2nd mortgage as unsecured, is only about $300K. The unsecured debt limit is currently $336K, and is going up to $360K in April of this year.

[momofthree]

Have you filled out a means test on your own? I don't think you're out of the running for a chapter 7. How many attorneys have you consulted?

Based on the numbers you've posted, you should be below the U.S. Trustee's debt limits as taken from the U.S. Courts bankruptcy site:

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's unsecured debts are less than $336,900 and secured debts are less than $1,010,650.

source: http://www.uscourts.gov/bankruptcyco...ml#eligibility

[justbroke]

There is definitely something wrong with your attorney or your numbers, or both. I added up those numbers and that's $6,088 in expenses. With Gross Wages of $7,700 your income tax withholding must be about $1,700/month or so (total guess). That means you are at least $-88 in the hole each month, or negative.

Something is not "adding" up right.

You need to go find another attorney. It sounds like s/he is telling you No Chapter 7 solely because of your income, and that it not a reason to be denied a Chapter 7. It's your income less expenses that produces a "disposable income" which determines this... not just looking at you being over-the-median.

[Ann]

Those are absolutely my numbers...I ran that online test too and I just don't see why I cannot file... makes no sense... I'm so scared... would any of you suggest I go to another attorney? I really thought for sure we could file... he says no way... I already paid the filing fee of which he is refunding me and says he will refund me the 400 that was not used... I paid in full $1400. My look forward asks if I will lose 10% or increase 10% in the next 6 months... I will lose $480 of my monthly income... not sure if that helps. Please all... if you even think for just a minute I need to get the rest of my money refunded from him please speak up. This board has never steered my wrong so please speak up! Thanks to all!

[keepmine]

I'd start over with another lawyer. And, don't pay a retainer until you decide to use his/her services.
Interview several. And, calm down. Lawsuits aren't the end of the world. They can't eat you. You've got way more than a few months before you get sued.
One problem you may have is, those car loans will be paid in full in a few months. You won't have those payments as an expense.

[SMinGA]

I can see where your attorney might not want to 'fight' for a ch. 7 for you - over the median... But I don't understand why you would not qualify for a 13. Are you basing that on having too much unsecured debt, or lack of NDI?

If you file 13 your car loans would be included in the 13. Meaning you would no longer make them directly, but the plan would pay them off. The UST would see those car payments as an easy $800 to fund a plan. You mentioned an upcoming cut in pay of $480 a month - but even a plan payment of $320 would pay off both vehicles & cover the TT % for administering the plan since the cars are almost paid off already.

[HHM]

I don't see how you wouldn't qualify for 13 as stated above by others.

But, I do think a chapter 7 would be a challenge, the trustee doesn't have to challenge too many expenses to get a few hundred dollars per month in DMI.

Go see another attorney.

[Ann]

I'd start over with another lawyer. And, don't pay a retainer until you decide to use his/her services.
Interview several. And, calm down. Lawsuits aren't the end of the world. They can't eat you. You've got way more than a few months before you get sued.
One problem you may have is, those car loans will be paid in full in a few months. You won't have those payments as an expense.

Yes, I realize this one... however, I have been putting off having my daughter get some dental work done so I'm thinking of using the referral from our dentist and get that work done. It is very legitimate. Yes, I too have ran that online means test and I come out with no money left over several times. I just don't get it. Thank you so much for all who care enough to respond!!!

[Ann]

My problem now is if I haven't paid since August what are my chances now of being sued before I can either let my income dwindle down in the next few months or file a 13? I still cannot understand the chapter 13. I feel like I have no place to go.