Considering Chapter 7 dismissal and working out plan with creditors

[girlblue]

I filed chapter 7 bk 10/13/10 personally and included debt from my LLC which I also closed. At the time of filing I had to turn over some cash that is now under the trustee's control. On Friday, I received a motion to dismiss from the UST for abuse. I am considered a person with high income potential. Unfortunately, I started a new job days before my 341 meeting. The UST was present at my 341 meeting and questioned why I needed to file bankruptcy or at least why I was not filing a chapter 13.

I don't want to keep fighting. I am considering letting the case be dismissed and trying to work out a payment plan with my creditors myself.

I have a number of questions though. Should I try to convert to a chap 13? Can the business creditors sue me personally if the LLC is dissolved? What happens to the cash I surrendered to the trustee? Will this be returned to me? IF I do decide to convert to a Chapter 13, how much more do I have to pay to the court?

I have a phone cconference with my lawyer in the AM (I moved to a different city for a new job.). I just want to know the right questions to ask my lawyer. He had his paralegal send me an email saying in order to defend me against the motion, I would need to pay $1500. I have no problem with paying for services rendered, but jeez.

Thanks in advance.

[AngelinaCatHub]

Well kind of difficult. Most here are not lawyers. Your best bet is whom you pay for advice.

I don't think you can be sued for your LLC property, personally. That is what an LLC is for. Desolved or not, if it were LLC creditors, they have that to deal with unless you personally backed anything. Other than this, I cannot advise further. 'Hub

[olivies]

Well, I wouldn't be so sure about the LLC. Hubby had an LLC, and had business credit cards. We dissolved the business, and included the credit cards, because you betchya they still expected to get paid. Whether the business was dissolved or not doesn't matter- they don't give credit to imaginary businesses. They give credit to people who own those businesses. That was my understanding.

[girlblue]

I did not have any business credit cards. The only debts left for the LLC are the lease for the office space, the accountants and a computer system. All of these debts are in the name of the LLC.

[olivies]

I guess then it would depend on the fine print in your lease or contracts if you signed with any personal liability. Was the computer system sold? Leased and returned? I would just be sure to go over all the details with your attorney- and he can surely advise you of the money turned over and what additional fees there are if you convert. The downside is that you filed the bankruptcy, it's already done its damage to your credit report no matter what you do.

[frogger]

I did not have any business credit cards. The only debts left for the LLC are the lease for the office space, the accountants and a computer system. All of these debts are in the name of the LLC.

Did you sign a personal guarantee?

[OhioFiler]

I filed chapter 7 bk 10/13/10 personally and included debt from my LLC which I also closed. At the time of filing I had to turn over some cash that is now under the trustee's control. On Friday, I received a motion to dismiss from the UST for abuse. I am considered a person with high income potential. Unfortunately, I started a new job days before my 341 meeting. The UST was present at my 341 meeting and questioned why I needed to file bankruptcy or at least why I was not filing a chapter 13.

I don't want to keep fighting. I am considering letting the case be dismissed and trying to work out a payment plan with my creditors myself. I have a number of questions though. Should I try to convert to a chap 13? Can the business creditors sue me personally if the LLC is dissolved? What happens to the cash I surrendered to the trustee? Will this be returned to me? IF I do decide to convert to a Chapter 13, how much more do I have to pay to the court?

I have a phone cconference with my lawyer in the AM (I moved to a different city for a new job.). I just want to know the right questions to ask my lawyer. He had his paralegal send me an email saying in order to defend me against the motion, I would need to pay $1500. I have no problem with paying for services rendered, but jeez.

Thanks in advance.

Quiting should not be an option. Keep up the fight. Negotiating with your creditors would be the worst you could do. Your Chapter 7 bankruptcy is already on your credit so there is no benefit to walking away still owing the same debts.

Talk with your attorney about the likelihood of prevailing against the UST. If it's unlikely, Chapter 13 would be better than walking away completely.

[backtoschool]

Quiting should not be an option. Keep up the fight. Negotiating with your creditors would be the worst you could do. Your Chapter 7 bankruptcy is already on your credit so there is no benefit to walking away still owing the same debts.

Talk with your attorney about the likelihood of prevailing against the UST. If it's unlikely, Chapter 13 would be better than walking away completely.

I totally agree with OhioFiler. You already filed, so your credit has already taken the hit for the bk and there is nothing to lose in seeing this through. I was a high income chapter 7 filer with potential high income and was able to fight my way into a successful chapter 7. The numbers will tell you whether you are a chapter 7 or a chapter 13 at this point, but you did not have the job for the six months before you filed, so most likely income wise, you are still a chapter 7. If the US Trustee is questioning your new income, then I am sure you can find some new expenses, including your moving expenses to offset it. If you need help with suggestions for expenses, post what you have down here and we can help you tweak them.

Don't take the hit to your credit, etc and not go through with this. One way or another, you will be better off if you see it through and get the fresh start you started working towards.

[girlblue]

For the remaining debt, I did not sign any personal guarantees.

[backtoschool]

Are you being given reasons for why they want to convert you to a Chapter 13? What are the specific reasons the US Trustee is stating as to your ineligibility for a chapter 7?

[girlblue]

The UST wants me to convert because I now have the ability to pay back my debts. I started a new job that will give me this ability.

I spoke with my attorney and he stated we should continue to fight it; the worst that could happen is a dismissal. He also told me that he had previously mentioned the risk or the motion to dismiss based upon "abuse". He NEVER mentioned this to me. I only discovered it by coming to this forum. He also said that if I got a 13 I would have a 100% payment plan. He says I won't qualify for a 13 because my unsecured debt is over $320,000. He ended the conversation by saying, "send us a check for $1500 and will will start working on the answer to the motion."

My case has not gone at all how the attorney said it would. My thoughts are if I spend all this money fighting the case and end up in a chapter 13, why not just try to work with the creditors myself. The money I spend fighting the case could be used to pay back the creditors, right?

The hearing for the motion to dismiss is Feb 17. I am so lost as to what to do.

[biotechsolution]

If it's for business debt you should a business bk, the means test shouldn't apply.

[girlblue]

The debt was both personal and business. My lawyer said just to file a personal bk and include the business debt.