Means test issues and filing 2 years past default

[ingrid29]

Long story.
- Stopped paying all CC 2 years ago.
- Married, 65K debt, all in my name (failed business)
- No income for last 2 years. Husband employed for the past year.
- Was going to do a 7 a year ago and didn't (long story- had to go out of state to care for an elderly parent).
- Sued once by OC and paying a settlement. Expect to be sued again.
- Looking again at a 7 just me filing. HH income over means.

I had an appt. with an attorney yesterday. He said even with my husband's income I could -probably- qualify for a 7. He was highly rated online and seems knowledgeable about ways to qualify.

He wanted $500 retainer to run the means test. Is that standard?

He also said he would probably -not- recommend a 13 (which I would not do).

Also said that my other option since I was 2 years past date of last activity was to just see what happens with creditors and I either settle or fight any lawsuits that may come up.

He charges about $600 more than other attorneys in the area. I talked to two other attorneys that seem less interested in the case because of the means question.

I don't have the time or much money to deal with the possible lawsuits, so part of me just wants this all behind me.

Any advice on filing this late past default and whether I should pay a premium given the means test issues?

Thank you.

[jostby]

My attorney did the means test for free. If i was in your shoes I would at least check one or two more and see what they will do for you before you hand over any cash.
Or do it yourself. There are a couple on-line sites that will do the means test for you. There is a lot of info to input (all your bills and etc), I would expect it to take about 1 to 1.5 hrs to complete. Do a google search or search this site for the link, I originally found it here somewhere.
We failed it so my wife is quitting her shi**y job on 2/28 and going back to school (spring and summer quarters). Paid with a pell grant! Then when she finishes we will file ch7 because then we will be below means for the previous 6 months.
good luck.

[ingrid29]

Thank you. I did the Nolo online means test, and without being too in-depth, I passed, so I am pretty confident that I'll pass at his office.

I did call around and decided that this attorney's office staff and experience were the best. His rates are actually standard - rates have gone up in the past year here! Plus, he will file with half and then monthly payments. So, I just need to get 1/2 together and will file definitely.

Good luck to you too. I am trying to get my husband to file with me as it seems like we might as well get rid of his 20k in cc debt as well and start completely fresh.

[tobee43]

i'll tell you..we interviewed at least 5 atty's....we went with the one we felt the most comfortable and seems the most knowledgeable....this firm was absolutely NOT the cheapest....but i asked ...how long have you done this...15 years..ok...now i know the firm has established relationships with the courts in the area...a HUGE plus...

i would hire the firm again..even if they were 1k more than the others whom were quick and bored and just didn't seem to care...after all..LOl!! penny wise and dollar foolish is what i say..if i could pay 10k to get rid of 600k....i wouldn't think twice..

best of luck...go with what YOU feel is right!

[tcreegan]

Hi Ingrid,

He wanted $500 retainer to run the means test. Is that standard? ....not really...attorneys get paid for their time, but usually there is a consultation for free or low cost. You take your numbers, they look at them, tell you what they think, etc. But $500 before they even run the means-test...run away, run fast...

On top of it, there are online calculators you can use for free. Heard folks praising the one at legalconsumer.com

The wisdom of the forum is to shop around for attorneys. I have compiled a list of the major complaints I found around here:

Communication: phone/email/face-to-face, secretary/paralegal/attorney, turnaround time on responses
Organizaton/work ethic: dot all i's, cross all t's or 'good enough,' document filed ASAP or 'before the deadline'
Competence: know the local trustees, judges, filed cases like yours, up-to-date on relevant court rulings
Retainer/Fee: exactly what is covered, what is extra, what to expect as 'extra'

The last line probably makes the most difference in $$$ Get an agreement you understand before paying a retainer.
(hence, my apprehension about your $500 to run the means test guy)

Any advice on filing this late past default ...makes no difference to a BK, you could be 20 years past default...which is another way to deal w/ the debt...what are the statute of limitations in your state? You could wait it out and hope no one files a lawsuit....and if they do file, you file the BK and head them off at the pass...

part of me just wants this all behind me. ...this sounds like a BK, plus it gets rid of the settlement along w/ the rest.

Whatever you do, hope it works out for you!

Tom in Colo

[iv65536]

If the debt is mostly business debt then the means test does not apply. The mortgage on your home is not business debt, though.

[ingrid29]

Thank you for the further advice. I've thought more about it, and decided to consult a few more attorneys after I called this 1st one's back and they said it took 1-2 weeks just to run the means test (after I give them the $500). Plus, when I was in his office the other day, I couldn't shake the fact that he yawned - twice - when I was talking to him. Really bugged me...

I want to file now as I have been approached - finally- about consulting work (after a two year dry spell) and if I start making money, I think this would be a 13. I could wait and try to settle as things arise. I am 2 years into a 4 year sol in TX. But, with 9 creditors still out there and 1/2 my debts not sold, I am very nervous. It's been a tough 2 years and would like try to start rebuilding rather than being afraid of the knock on the door. Getting sued the first time was very stressful.

Also, it's biz credit in the sense I used it for a business, but it was all personally guaranteed.

[Charlie777]

I was lucky, found a great attorney first time out. He charged $200 for the initial consultation, for which his staff pulled credit reports, we put numbers in to his software and generated the means test. Going through the preparation software gave him a way to estimate my fees, I also needed to wait to time the means test around some issues.

$500 for initial work sounds high, and to pay that and wait two weeks is just absurd.

I would look for an attorney who regularly (every week) is in front of your BK court, Trustees and /or judges. If they are specialized enough they will have software to do much of the work. Some may call this a "bankruptcy mill", if the attorney is specialized and responsive, that's the one I would choose.

[jennilynn]

If the firm is really busy, it really isn't absurd they want to charge to run a means test. When I worked in NC; we charged a fee to run them too. People think it's really easy to run the figures because they see the ones online, it's not all that easy. The way many districts do it is to input the income monthly for the last six months, then you have to average the dedutions (taxes, retirement, etc), you have to input secured debts, taxes, etc. It is a fairly lengthy process... being paid a few hundred dollars is not unusual.
But, the attorney you go with should be one you like and feel comfortable with