Misled by BK attorneys's not sure how to proceed now.

[Cantgetout]

I'm 26 male with about 30k in unsecured debt and make 4k even a month (before taxes). Most my debt was credit cards around %30 apr and about 10k in medical related bills. After a few meetings with the attorney we decided to go for a ch7, he made it sounds like a sure thing and wouldn't be a problem.

It took me around 8 months to pay his fee and during that most my debt was sold to collection agencies and my car was repod (part of his plan) I had been receiving 400$ a month from work for driving my own car but after the repo I took on a company car and stopped getting that. Other than that no finances changed at work.

After the first of the year I had payed my fee's and was ready to file. We did a means test (?) and thats when he decided I made to much money for my debt and we would have to file a ch13... As far as i understand I would of had a better chance negotiating my debt down and paying lower amounts than a ch13.

The next day he let me know if I picked up a personal car we would be good for a ch7 since its more finical responsibility. I borrowed 3k from family and picked up a car. When I let him know I got the car and was ready to file it was THEN he let me know we had to have some paperwork tied to the loan and my family member had to be on the title... that was already processing with the dmv and we only had a 10 day window. Since there was no way to stop the titlework I had to wait for the title to show up in the mail and redo the paperwork.

Got the title last week but my lawyer is telling me there is a 10 day period from receiving the loan and filing the title! So now Im back at borrowing 500$ from a friend and putting him on the title.

After all this my lawyer is still telling me we dont have a good chance at a successful ch7 and it will prob be fought. After that I would have to pay him 800$ more to represent me in a ch13...

Does this all sound about right? I feel sick to my stomach constantly, my wages are already garnished for one bank I owed and I'm sure more is on the way. I now have to pay a family member back 300$ a month for my "new" car and i have a 80$ insurance bill every month I didnt have because of this car.

No idea what to do now. Should I try the ch7 just to fail but buy me some time to stop any more wage garnishments or just suck it up and do a 13?

[btbeme]

First, you need to go to the Nolo website and plug in your own numbers to see if you pass the Means Test. It takes about 20 minutes and will likely answer your questions.

Regarding garnishments, loans on a car, etc - these can be your best friends in qualifying for a Ch 7. Yes, you have to wait until the car loan is "perfected" by DMV so the car cannot be taken by the Trustee, and that takes time. Nothing in a Ch 7 is "instant" - nor was the impending need for a Ch 7 a surprise. These take time to map out properly. Sounds like your attorney failed to make certain things clear.

Try the means test yourself. Then come back here with the results and see if we can help.

[debee]

I think the most you can be garnished is 25%. If you're at that level, your other creditors can't garnish your check. They can go after your bank accounts though so you need to be on the watch for that.

When your lawyer told you to get a car, he meant get a car loan. If you have one you get to claim the "ownership expense" on the Means Test and you will also have a payment on your schedule J. Schedule J is very important. It's your expenses going forward and you're going to need a lot of them in order to get a chapter 7 discharge.

Also, you want payments to run 5 years. That is the term of a chapter 13 for over-the-median filers. You don't want any of your expenses dropping off in the 5 years post-filing. A $3500 loan is not a five year loan for someone with your income. Or, if it is, it's only $58 per month.

A $3500 car is financially wise but unfortunately when it comes to cars, the bankruptcy court favors the stupid. You would have been MUCH better off buying something brand new off the lot so you could claim the loan expense and the high insurance expense on your schedule J.

Talk to your lawyer and see if you can sell the $3000 car and pay back your relative without kicking up any "insider preference" dust. Normally if you pay back an "insider" within the year before filing, the trustee can go after that money and get it back and divvy it up between all your creditors. This rule doesn't apply to secured creditors. I don't know whether trustees in your district would consider the car loan secured given the timing of the purchase/lien and whether or not you have loan docs, etc. If you can sell it and replace it with a new car, that is what I would do.

Even if you can't file chapter 7 (which YOU can figure out and know with reasonable certainty before you ever stand before a trustee) and end up in a chapter 13, would you rather be making the monthly payment for a new car that you also got to drive, or making the same payment (benefiting the trustee and your creditors) and driving the old beater?

So pull up your socks and get over to Nolo as btbeme suggested and check your means test: http://www.legalconsumer.com/bankruptcy/nolo/

[Jacey]

Yipes! Why do some attorneys make you beg for information? Mine is that way, and I can't decide if it's lack of knowledge or just laziness. Work that means test and see if you can pass!

[IamOld]

Honestly, I would have gladly paid say another 100 or two hundred more IF my atty would hire someone who does nothing but communication...