Is North Carolina really THAT different?

[StrawberrySu]

In meeting with attorneys, something strange was revealed. Both NC attys we interviewed (for the full story see my thread "Let's play "Which attorney would YOU choose?") said our DMI range on our Schedule J for a chapter 7 could be way more than we expected. Atty A said "it really doesn't matter, the courts here pretty much just look at your means test, and you pass that no problem. As long as you don't have like $1000 or $1500 left over each month, you are fine for a C7" However, she did say if we had to do a 13 it wasn't the worst thing in the world.

The other said "oh, you can have between $100 to $500 a month, it won't be a problem. If you had say $1000 extra a month, that might be a concern"

We have around $433,000 we will be discharging. Two rental property mortgages, and a home mortgage, (all being surrendered) and about $17k in CC debt. We can't do a non-consumer chapter 7 because one rental was our former home. Both attys said with that amount of debt, we were a 7.

We are over the median by about $500 a month, but because of all the mortgages we are pass the means test with around a -2600 a month. It scares me to take their word on this, but they pretty much said the same thing. Our DMI can be under $200 if we increase insurance, pay a higher rent, etc, all things that are allowable. And since we are moving, all things will change, so it doesn't look like we just arbitrarily jacked them up o get into a 7. Should I be concerned about this?

[IamOld]

Hello Strawberry...do you mean that the lawyers in NC are telling you that it is EASIER to qualify for a 7 there than...elsewhere???

[StrawberrySu]

Hello Strawberry...do you mean that the lawyers in NC are telling you that it is EASIER to qualify for a 7 there than...elsewhere???

I guess that's what I mean, lol. N Carolina and Alabama are the only two states
not under the jurisdiction of the United States Trustee Program. They have Bankruptcy Administrators instead. But it is supposed to be the same, sort of like just a different title.

[dontburnthep]

The BK Administrators are the same, it's just a different title. In my experience, the lawyers you spoke with are incorrect- you need to pass the means test as well as have very little left DMI- they need to match, in other words. And over median debtors are looked at VERY closely- again, in my experience. I would consult with a third attorney.


Maybe each NC district is different? I am in the middle district.

[StrawberrySu]

The BK Administrators are the same, it's just a different title. In my experience, the lawyers you spoke with are incorrect- you need to pass the means test as well as have very little left DMI- they need to match, in other words. And over median debtors are looked at VERY closely- again, in my experience. I would consult with a third attorney.


Maybe each NC district is different? I am in the middle district.

The first attorney was emphatic that the trustees don't go by Schedule J, just the means test. This is the Western District. The atty's law partner is a trustee, that's what really threw me for a loop. And the fact that both attys I interviewed said this. I plan to have a DMI that will work, regardless, I just thought it was bizarre to be told this by two separate attorneys which flies in the face of all I have learned on this board. I do plan on consulting with more attys when I get moved, before I select one. Just wondered if anyone else had been told this.

The only thing I can come up with is that perhaps they are considering me to be a non-consumer chapter 7? Even tho I have 2 rental properties, one was a former home, so I have been advised it will not count, therefore I am consumer 7. I explained this to the first atty, but was not told whether that made a difference.

[Lalalink]

NO! We are now in the same city and state as you. Our lawyer said the ONLY reason we could do the Ch. 7 is because we were non-consumer. Although we are not using her as our case is straight forward with no mortgages, car loans, or assets to contend with. She was a clerk for a certain judge in a certain district many years prior to practicing bankruptcy law (only); this is what attracted us to her.

For a $100 consultation fee, supposedly for an hour, she ended up spending 3 hours with us (although she talked TOO much for our likes about other things that we were not interested in; I suppose we could have cut her off and asked OUR questions, lol). Anyway, PM me if you want her name or more specifics (if that is allowed on this board).

[StrawberrySu]

NO! We are now in the same city and state as you. Our lawyer said the ONLY reason we could do the Ch. 7 is because we were non-consumer. Although we are not using her as our case is straight forward with no mortgages, car loans, or assets to contend with. She was a clerk for a certain judge in a certain district many years prior to practicing bankruptcy law (only); this is what attracted us to her.

For a $100 consultation fee, supposedly for an hour, she ended up spending 3 hours with us (although she talked TOO much for our likes about other things that we were not interested in; I suppose we could have cut her off and asked OUR questions, lol). Anyway, PM me if you want her name or more specifics (if that is allowed on this board).

I am just lost on this Lala. Why on earth do you think they said this? I am starting to think they both were considering us non-consumer, that has got to be it. The DMIs they are quoting would be in line with that, I know. But as i said, I went over the specifics with the first atty about how we prolly wouldn't qualify for non-consumer, and the atty never actually answered the question. Since the law partner is a trustee, I figured the atty knew the lay of the land. I think I will email both attys Monday and clarify the answer, on how they are coming up with this. I don't want an atty to tell me not to worry my pretty little head over this legal stuff, I want to KNOW!

[StrawberrySu]

Oh, and Lala (forgive me if this brings to mind a sweet little Teletubby), do you mean you are in NC now? I noticed in your previous posts that you had signed a rental agreement ... how did you find the renting process to go? Any problems? It is great that rentals are listed on the MLS there, but all of those are going to be run by property managers, not a homeowner who will maybe have easier qualifying standards. We have had great credit up until this January when everything went south and we stopped paying ccs and mortgages to get shorts sales thru, only to end up not pursuing short sales in the end. Oh, and I got your PM, thanks!

[Lalalink]

Strawberry,
We sold our house in NC in 2008 as we thought we would be staying in FL. We rented in FL from 2006 to the middle of 2010. So we had a good mortgage payment history and a good rental payment history.

We moved back to Charlotte late last year. During the pre-planning stage, we REALLY wanted to buy another house before dh's credit took another dive... but the lawyer I referred to discussed this with us... we have PLENTY of time to buy later (two years from discharge, and will still have the "pick" of the litter... housing market is flooded, and after having lived her for 14 years, I know that it is still going to be a few years for it to recover...

I'll email you our Property Management company; they do the majority of PM's/rentals in this area. I would give them a call and let them advise you; as I know some of their rentals have been "on the market" for more than a year. Try your best to NOT get into a rental that has an owner in financial trouble. We are actually renting from a bank and living in a bank-owned home. They had the house on the market for 3 years, and finally decided to do a long-term rental. If you do get a rental, I highly recommend renting for two or more years, unless you are not sure you will like living in the rental for long. I do know that the Property Management team handling the bank's property for us DID tell some friends of ours that once they established a good rental history (1 year no late payments), that renting from them would not be a problem in the future.

Here comes the PM...

(((hugs))) this is really hard.

[Lalalink]

I don't want an atty to tell me not to worry my pretty little head over this legal stuff, I want to KNOW!

I'm with you. I HAVE to know. Now, perhaps they did not have all your info to give you the answer? I suppose that is why our lawyer charged us a consultation fee of $100. She thoroughly went over our paperwork and told us EXACTLY what she would be filing for us AND the reasons. I also wanted one lawyer to be completely familiar with our case and not pass us around the office.

You just have to search until you find one that fits. The one we liked may not be one that you like. FWIW, we are filing Pro-se, but she will help us for hourly fees if we need her. As I PM'ed you, she was $3500 - $5000 for the dh's ch7 and my ch13... she was going to be able to nail down a better figure once dh got her the failed businesses P/L's, Balance Sheet and 2010 Federal Return.

Things have changed since we met with her. Turns out my name and social sec. are associated with one of the business cards, so now dh and I will be filing the non-consumer/no-asset ch7 together.

I'm hoping to file Monday or Tuesday.

best wishes,
Lala