Strange Attorney Actions

[ladycee]

Hello all, New Here,

Was considering bk for about 1 yr. Was forced into it by Discover cc Lawsuit.

So broke, my son paid atty fee for me. No money to get new appraisal. Atty promised me he could take 2005 appraisal $115,000 and do a comparison based on new market. After 1 meeting with him and atty fee was paid he "disappeared" from the case.

Found out by accident (secy blurted info) that they were keeping $115,000 value for home. New atty insisted market values in my area had not gone up or down.

This would have given me $30,000 equity -- mgt= $84,024 Home Exemption here in Middle District PA is $21,625
Toyota car 2006 only 18,000 miles still owe $5,000 to Payoff 3/2012 Dealer value $8,000

My first meeting with him, I insisted on Chapter 13. They had never allowed me to choose. Merely assumed I woud go Chapter 7. He was so angry he barked at me I "could get another atty". Left the room to consult with senior atty, and said that he was told to allow me to file 13. Grumbled at the computer, "all we are doing is filing a glorified 7".

I received a letter from this attorney asking me to swear that I am of sound mind and body and that I chose to file 13 against his advice, and to swear that it was true that he had explained all the different aspects of the different Chapters. In his email to me he explained that this was to protect him from legal liability. I ended up signing the letter.

My income way below median income......civil pension and $254/mo SS totals $1,938/mo
I am current on mtg and car pmts.

They filed a "face Petition" for Chapter 13, 7/20/10 to "stay" the Pending Judgement from Discover card.

New atty convinced my son I was better off with a Chapter 7. I resisted. My son scrambled to get a new appraisal for me. Atty wanted me to use his "auctioneer" but I preferred a professional ... a teacher from the local Real Estate School with credentials up the kazoo. New appraisal came in 8/3/10 at $85,000 giving me a little over $900 equity.

My impression is, the new atty was "not happy" with the new appraisal, criticizing that the appraiser listed all his credentials taking up 9 pgs of the report.

But I met with atty and now agreed to convert to Chapter 7 as he was promising that we now had an extra $11,000 of homestead exemption to spread anywhere we liked. He also promised that the conversion would not cost extra because Schedules for 13 had not been filed yet.

Conversion to 7 was filed August 6th.

August 20th I received a BOMB in the mail. the Petition. Stating the House value as $115,000 lowered to value of $105,800 due to 8% cost of sale.

A full 15 days after all the promises, passing me page after page to sign, but sending me home without a copy of what I had signed.

I frantically called the senior atty who promised to call the next day, but instead a secy called to arrange a 341 Preparation Meeting. I explained to the secy that until the Schedules were revised to reflect the new appraisal........and OTHER mistakes were corrected, I could not begin to concentrate on anything else.

Since August 26th, I have been emailing back and forth with paralegal who keeps making the same mistakes over and over.........adding an extra 0 to make the house worth $850,000 etc.

But especially, my request is that they indicate on the Schedule A, in the same place they originally had listed appraisal $115,000 of 2005, the new appraisal of $85,000 August 2, 2010. Because while they changed the value in the correct column........they left off replacing the old appraisal with the new appraisal.

My view of this is that the court will have no idea why the new figure of $85,000 has been Amended from $105,800, and that it is my right as Petitioner to inform the court of this new appraisal.

My son has full trust in this atty and tells me I am splitting hairs.

What say you guys? Am I overreacting? I have been told that this was due to a "malfunction" of their computer program. I said: But don't you review?

Any advice what to do next?

Cheers,

Chris

[tobee43]

isn't pa a homestead state....and what is the exemption max.....


this is only my personal opinion...and you know what they say about those...

i repeat it all the time...chapter 13's were designed to line the pockets of the atty's and the banks in this country...

why in the world and you may have a good reason that i just couldn't see in your post for not wanting to go chapter 7...but what is it???

you can reaffirm you car...and depending on whether your state is homestead state and what the max is...you may be just fine to keep your home.

i had to go over my petition at least 4 times before "their" computers got it correct...LOL...their sec. fingers ....but i had an excellent atty...you are your best advocate in making certain all information is correct...shoot...we just estimated the value of house...but now find out we were right on.

i think you'll be fine.

[ladycee]

Thanks for that qucik reply tobee

Yes you are correct...homestead state....the max exemption for a home here is $21,625. They use federal guidelines here.

$30,000 is approx $9,000 above that and my Toyota after $3,400 would still not protect me from having to pay $5,000 still due on the car loan to the Trustee. the new appraisal takes care of that .....but why does my attorney file with the OLD appraisal number? This way they were eating up the full $21,625 which I might need to protect some valuable furniture.

Thanks for your input

This CANNOT happen in Chapter 13.

that's why.

Cheers

[tobee43]

This CANNOT happen in Chapter 13.

no...but they can tell you when and if you can purchase a car....and you'll be needing to report any change in income...etc...it's like being micro managed...for 3-5 years....who needs that continued stress if you have a choice.

some have no choice and must do a 13.....have the atty ammend the value of the house...our home was in nj and it's value dropped over 250k....so i'm thinking you'll haven't any problem. don't hire any appraiser...unless the court demands it. really. your number are too closed not to work out for the best...have them rework the numbers...i just checked out your house and it's only worth 67k today...

[ladycee]

This car is great! Only 18,000 miles. They can sell it and still have left over to pay me the $3,400 exemption.

I don't need to buy another car. I'm an old lady and don't ever want to buy another used car again. Mechanics rape me every time.

The new appraisal was already DONE. My own attorney chose to disregard it! Even tho it gives me 0 equity!.........don't you read?

Just exactly HOW did you evaluate my home?

The 13 would have prevented any auditors coming to my home and allocating my "stuff" for bid.

[tobee43]

Just exactly HOW did you evaluate my home?

i didn't...it's just in theory...and he should make your numbers work.

i hear you about the cars!! me either.

[SMinGA]

On $1900 ish net income, with a home payment & car payment & having to pay utilities, food, etc. - I cannot imagine a ch. 13 being successful for you. Chapter 7 seems the right move.

But it also seems the atty's office is not good on details. The schedules should be amended to show accurate value on your home & other possessions.

Even so - the federal exemptions:

$21,625 homestead
$550 per item up to $11,525 total for household goods
$1,450 jewelry
$3,450 motor vehicle

I am not sure why you think you'd have to pay for the equity in your car? Federal exemptions have a car allotment in addition to homestead, and still provide a generous household goods amount.

[tobee43]

SM...i'm with you on this as well...makes no sense OP is attempting to prevent:

The 13 would have prevented any auditors coming to my home and allocating my "stuff" for bid.

pa is known to be a more debtor "friendly" state from what i have understood....

i have yet to hear a trustee unless there was a huge amount of money in the estate send anyone to anyones house!

[ladycee]

Yes Sminga

You are correct, but when I realized that this attorney was insisting on using the 2005 value, I felt threatened. Another attorney told me he would NEVER accept a 2005 appraisal. Yet mine, was telling me that values had not changed up or down. How would you react to that?

the new appraisal fixes that but my attorney is still delaying the Amendments.

Plus this law firm I have hired are very influential in the bankruptcy community and other attorneys are afraid to get involved. In addition, IF I find another attorney, I have to have the total fee upfront, and would need to do so FAST, because the Petition is already filed. I can't possibly ask my son to view what he already paid as a loss and would not be able to easily come up with the fee for a new attorney so qucikly.

One attorney did tell me .......sever your relationship with them and I'll jump in. But the fee ??? ack!

You have the exemptions correct.....but while the extra exemption [IF they ever correctly Amend the Schedules] will protect me from being liable for the value above $3,400 --- I am still liable for $5,000 on the car loan. It is entirely up to the Trustee if I can keep the car, or if he sees it as an opportunity. He CAN demand they I pay up the $5,000 instead of letting me reaffirm the debt.

If I can't pay...he gets the car. I live in a very rural neighborhood....NO public transportation AT ALL.

My son says ....so what....let them take the car we'll get you another one in a heartbeat.

Before converting we had worked out a budget for $105/month for 3yrs....which I could have handled.....this gets blown up with Trustee percentage and attorney fees, but not that much more. I probably would have ended up with $200/month based on my disposable income and the extras.

I believe my home is now protected thanks to the new appraisal......but playing phone tag with attorney office since August 23rd, and still waiting.

I can't help but feel he is deliberately delaying Amendments to make the court say the Amendments are not timely.

Can the Court reject the Amendments after a certain period of time? Schedules were filed August 19th.

tobee every case is different, but a neighbor of mine lost his house and car ......

Sometimes Trustees don't want to be bothered with the small fry, but it all depends on which Trustee and the trends at the time. and because I have found out that my attorney works both sides of the fence, I am more worried now than ever.

Thank you both

Chris

[SMinGA]

Out of curiosity - is this a standard car loan, where the lender is a lienholder? If so - the $5000 balance owed does not go away with bankruptcy. Rather, your obligation to pay the debt gets discharged - but the lienholder's rights to the vehicle remains. If you want to keep the car, you keep paying. Where did you hear that the trustee can demand you pay the car loan in full as part of bankruptcy or risk losing the car? He can't make the loan go away... If the trustee takes the car to sell, he has to pay the loan off & pay you your exemption before he gets a dime.


Some people do lose property/vehicles in bankruptcy. But without knowing the details of those cases, you can't really compare them to yours. A common problem is a car loan among family or friends. Say you buy a car from a friend and make a payment arrangement with them. You think of it as a car loan, but the friend signs the title over to you as if you had bought the car outright. If the title does not show the friend/seller as a registered lienholder - you actually own the car outright and have an unsecured loan with your friend. Things like that become a problem in bankruptcy. But that is not how a standard car loan happens.

[ladycee]

Hi Sminga,

thanks for your reply. Yes Toyota was much more cooperative with me under Chapter 13. Once I converted. it changed. Now they do not return my calls. They sent my atty a letter giving me only 3 options: Reaffirm, Redeem or Surrender.

atty says that in PA we have a 4th option.....something about technical...yada yada....which states that they cannot take possession of the car unless I default.

But that is not what Toyota says and Reaffirmation must be approved by the Trustee. And I am told that my atty has to approve it before the Trustee will consider it.

Still waiting for atty to FIX the Schedules which portray my home as $115,000 and they also are not answering my calls.

Now there is a Labor Day Weekend so nothing will be addressed until Sept 7, that's why I am asking if there is a deadline to Amend faulty Schedules?

The Schedules were filed August 19th......getting closer and closer to a 30day delay.

thanks

Chris

[SMinGA]

Have never heard of a deadline for amending - paperwork sometimes gets amended even after the 341. (Seems many people don't notice typos and mistakes for a long time.)

Its good that the loan is thru Toyota - they're bound to have the title correct.

Toyota should not be discussing much with you - regardless of 7 or 13 - as they should go thru your atty. Dealing with you directly could get them in trouble.

Many people do a 'ride thru'. They mark reaffirm, but don't complete a reaffirmation agreement - but keep making payments and keep the car. If something goes wrong later, they can give the car back and not owe a $. Whether that is an option for you, I don't know. Some lenders and/or some districts insist on a reaffirmation. The atty has to sign off because they are supposed to work in your best interest, not helping to put you in a financial bind after the Bk.

[dumpinmydebt]

[QUOTE=ladycee;447680


The 13 would have prevented any auditors coming to my home and allocating my "stuff" for bid.[/QUOTE]

First, you can reaffirm the car loan. This would make this debt non-dischargeable in the bk. It is almost like signing a new car loan. I would HIGHLY doubt the Trustee is going to ask you to pay $5k for the car. Not sure where you even heard that. The Trustee's typically will reject a reaffirmation agreement when it is clear that the person is not able to afford the car loan. And, even IF it WAS denied, you can ride through. Your lender is not going to have much of a desire to come and get that car. It takes time and money to repo. If you are paying on it on time, they are making money off you. Why would they repo?

Second, just because you file a 7 does NOT mean people are automatically going to be coming into your home to appraise your stuff. You are going to use garage sale or craigslist prices to list the exemption value of your items. You are not going to put down what you spent on it. They are used items. Unless you're sitting in a house full of valuable antiques, then as your son said, you are likely splitting hairs. They aren't going to take your stuff and leave you sleeping on the floor. That is not their intention.

From the NOLO book:

Only property from which the trustee can realize a profit will be sold; you won’t lose property that is worth very little or is protected by an exemption.

Also, why would your attorney deliberately delay Amendments?? He's working for you, not the creditors. If he screws up, he has to fix it. If you do a search on here you will see many stories of attorneys messing up or stressing out the filers. You are not alone. All the more reason why we're filing pro se. Maybe reading some stories about how other attorneys messed up but the bk's were still successful will help ease your mind a bit.

As far as amendment timelines, this is from the NOLO book as well:

One of the helpful aspects of bankruptcy procedure is that you can amend any of your papers at any time before your final discharge. This means that if you made a mistake on papers you’ve filed, you can correct it easily.

Despite this liberal amendment policy (as stated in Bankruptcy Rule 1009), some judges will not let you amend your exemption schedule after the deadline for creditors to object to the exemptions has passed. If you run into one of these judges, you’ll need to talk to a bankruptcy attorney. In most courts, you will have to pay to amend your bankruptcy papers only if you are amending Schedules D, E, or F to add a new creditor or change an address,
because these changes require the court to make an additional mailing. The fee for this type of amendment is currently $26.

If you become aware of debts or property that you should have included in your papers, amending your petition will avoid any suspicion that you’re trying to conceal things from the trustee. If you don’t amend your papers after
discovering this kind of information, your bankruptcy petition may be dismissed or one or more of your debts may not be discharged if that new information comes to light.

Even if your bankruptcy case is already closed, you may be allowed to reopen your case and amend your papers to add an omitted creditor who tries to collect the debt.

[tobee43]

tobee every case is different, but a neighbor of mine lost his house and car ......

Sometimes Trustees don't want to be bothered with the small fry, but it all depends on which Trustee and the trends at the time. and because I have found out that my attorney works both sides of the fence, I am more worried now than ever.

Thank you both

Chris

absolutely...they are different...but the numbers you have cited are clear and fairly simply. everyone has a different situation, but after a while one can glance and get a fairly good idea. of course....no one knows one personal story from a short posting on a website.

Originally Posted by ladycee

The new appraisal was already DONE. My own attorney chose to disregard it! Even tho it gives me 0 equity!.........don't you read?


People on here are trying to help you. Responses like this are quite unnecessary.


The 13 would have prevented any auditors coming to my home and allocating my "stuff" for bid.

thanks dumpin....i'm thinking she was referring to her atty! LOL! i hope...

[dumpinmydebt]

Toyota should not be discussing much with you - regardless of 7 or 13 - as they should go thru your atty. Dealing with you directly could get them in trouble.

Many people do a 'ride thru'. They mark reaffirm, but don't complete a reaffirmation agreement - but keep making payments and keep the car. If something goes wrong later, they can give the car back and not owe a $. Whether that is an option for you, I don't know. Some lenders and/or some districts insist on a reaffirmation.

The atty has to sign off because they are supposed to work in your best interest, not helping to put you in a financial bind after the Bk.

Yes, Toyota needs to handle the business with your attorney. There really aren't questions they can answer for you. And they can't call you back because that could be seen as a violation of the automatic stay.

We're riding through. We don't live near public transit either OP and this is our only car so I can understand the fear of losing the car. I wasn't too sure on the reaffirmation, but after reading many posts on this website, I feel quite comfortable with our decision.

The last statement is a good point. This is the reason why the attorney was upset at you for insisting on the 13, because they didn't feel comfortable being legally liable for it. Some attorney's won't sign off on the agreement. But if Toyota tells them that the reaffirmation is the ONLY way to keep the car, then they will probably sign off on it. They know you don't have the money for a car and they don't intend on leaving you without transportation.

I think I've seen other posters with experience with Toyota. You might want to search that and see what you can find.

Now, try to relax and enjoy the weekend.