Any input appreciated!!!!!!!!!!!!

[Ortgeist]

Hello all...I am fairly new to the board and trying to navigate between all the bk lingo and such. I need some advice since I am uneasy since my last appt with the lawyer last week (it was our consult). Here's the rundown....

I'm looking at our income vs expenses. We are about $1400 in the hole each month if we pay our minimums on the unsecured cards ($36000 total for $900/month minumum payments), mortgage ($1153.99), 2 car notes ($850), and utilities. My husband and I work and make about $74000 yearly gross for 2 full time and 1 part time job. We have about $300 minimum in medical bills EACH month due to my son's illness and necessary copays for psychiatrists/ medications. BTW, the $1400 in the hole thing also includes the works: school loans, taxes, haircuts, daycare, summer camps, groceries, everything we have going out over a year. (We did the Hummingbird credit counseling and this is where we got that figure).

Last week, we met with our bk attorney. We told him we wanted to keep the house, one car, furniture, tv- and that's about it. He then told us that we would qualify for ch 13 and that we would be able to keep the house if we can pay the mortgage-which we can. We are only 28 days late on the house note. We refinanced 2 years ago so we don't have probably more than $5000 equity in the home, if that. The Toyota monthly payment ($19000 loan balance, payment of $465.44 monthly and $11,000 actual car value) would decrease to what the value of the car is today- so taking all of that into consideration; the lawyer came up with a monthly payment of $300-$350 for 5 years. This includes his fees, too.

Yes- We will be surrendering the Nissan. We owe more than the car is worth.
Here are my questions:

1. This $350 montly fee seems too low to me. I guess I am worried that all of the sudden our payments will end up double that amount. Does this mean that the unsecured cards are not getting any money at all, or very little? I'm guessing that this is the proposed payment plan and that the trustee will either bless it or have it changed, right?

2.Can Nissan sue us for the amount of the loan over the car's worth?
We owe 19000 and it's worth 13000. We were upside down on a trade in when we got the Nissan so they rolled the 3000 into our loan for the Nissan.
I am worried that they will be chasing us for that 3,000. Can that happen?

3. I have stopped paying my cc's to save $ for med bills as they come in and to pay our lawyer fee of $350. Not really a question here, just FYI I guess.

4. I'm worried that our medical bills and lost time at work will put us back into a bad position. But there's no way to know when this will happen (and yes, it will happen). Can the hospitals and physicians bills that we are including in the bk (2500 worth) prevent us from getting medical attention with those providers? Our lawyer didn't know the answer.

5. Is there any advantage to my lawyer getting us to file ch 13 vs ch 7? The reason why I ask is that I was sure that we would qualify for ch 7 just looking at the income vs expenditure section.

We have no assets of concerning value so the only thing we need to keep is the home and toyota.

Any input here would be appreciated. If something is fishy here with this lawyer, I would like to know before I pay him the $350 to file.

[jal1129]

What state are you filing in and how many are in your family? The main things that will determine if you can file 7 or 13 are your gross income and assets.

[JollyGG]

What state are you in? What is your family size?
Are you and your husband filing together?
That would allow us to help you with what the median income is and what your exemptions are.

Schedule consultations with two to three more lawyers. It is always good to get a couple of viewpoints and you'll learn alot about your situation. Initial consults should be free.

It is common for lawyers to encourage clients to go into a chapter 13 verses a 7 basically because they make more money off of them.

If you hope to do a chapter 7 and you want to keep your house and your car then your mortage and your car have to be caught up.

Here is a link to an online means test that could give you an idea weather or not you would qualify for a 7. http://www.legalconsumer.com/means-t...ator/index.php

Even if you don't qualify for a 7 now there are ways to qualify such as quiting the second job, waiting for bonuses or extra income to age out of the six month look back window, ect. If you are close to the line between a 7 and a 13 some of those options are worth considering.

[BKTango]

I agree with Jolly, you need to see a few more lawyers for free consults first. Also letting us know your family size will help in determining if you are above or below your states median income(first step in determining if you qualify for ch7).
The answers to your questions to the best of my knowledge are as follows, and someone else who is going through a ch13 may come along and shed farther light on the subject.

1. It is not uncommon for an attorney to come up with a payment and then it get shot down by the trustee or courts. It's actually normal for the first proposed amount to not be accurate. So you may need to prepare yourself for an increased payment.

2. If you surrender the Nissan and include it in the bankruptcy, no they cannot sue you for the balance.

3. Good idea, learn to live cash on hand so you have a much better idea of actual monthly living expenses.

4. Not sure if they will refuse service, but I do know private physician offices can. The hospital is something I do not know about. You really need to think what a job loss and more medical issues will do to your family while in a ch13. You say it will happen, you need to realize ALL of your disposable income will be funding the 13, so there will be nothing left over each month other than what you have budgeted and the trustee allows to be budgeted in.

5. Yes, they make more money off of the chapter 13 than the 7.

It's possible as Jolly suggested that depending on your median level for your size of family you may be able to quit the part time job and qualify for a 7, however in order to file a chapter 7 and keep the assets you will need to be current on those payments.

[SinkingFast]

As others asked,........... What State??

And what about the part-time job?? How much does whoever make/month working that job??

Since you're in the planning phase, maybe quitting the part-time job would be all it would take to throw you under the Median for your State. Then you could possibly look at doing a Ch 7.

Just guessing here, but,........... More than likely, the reason the attny suggested a Ch 13 is he/she thinks you want to keep your house. You would have to bring the house payment current prior to filing to go Ch 7 and keep the house. Many times attnys don't explain their reasoning. They listen to clients talk, think they know what the clients want, and work from there.

About the doctors, hospitals, and such,........... Could be they can refuse care to you if you do not pay. A lot depends on local/State Laws. Where we live now, a hospital is only required to get you medically stable to transport if you do not have insurance or have outstanding debt with the provider.

[spell]

Unless you are being forced by the means test, your best plan would be to file a chapter 7. And dump both of the cars. You'll need to do that to make ends meet in a cash and carry post-bankruptcy world.

28 days behind can be caught up relatively easily in a ch7.
But with the cars, I still see your budget as $500 in the red each month.

[Ortgeist]

Sorry it took so long to get back.....my son needs a therapeutic day school placement, so we've been dealing with that. Anyways, we live in Missouri and 4 of us live together (me, dh, son, & daughter). From my part time job, I make an extra $240 a month income.

Once again, thank you for helping me with this. I'm so overwhelmed!

[Ortgeist]

oops...one more question.
My husband had been working OT to help out with bills these past 4 months. We cannot keep this up any longer. I need him home with me to help me out with my son. I'm very crabby and at the end of my ropes. Can we somehow use a projected income in the bk? I'm getting subs for some of my pt work hours due to extra play therapy appointments and doctor appts.
I don't want my husband to have to work ot anymore and I would like to only work one hour a week for my part time job versus three hours per week. Can this be taken into consideration? I don't want to go through a bk and have us work ourselves to death and not have the energy to give to my son (believe me, it takes all of my energy!).

[Ortgeist]

Well, anyone? Bueller?

I took a look at my work hours for last week. A measly 27 hours. Doh! I had to take off to care for my son as he got kicked out of his school for punching and completely demolishing his classroom. We are looking for an alternative school that can meet his needs. We are close to finding one. However, it seems like there are 2 problems:
1. He may not be able to start until June sometime. Hello...who will watch him? My MIL can only do a week, maybe.
2. There's shortened days during the summer. So I guess I'll be working 6 hour days since the school is farther away (40 minutes roundtrip).

So how does the court look at this? My summer is going to be like this. Even next school year will prevent me from working 40 hours simply for the fact that I have to drive him to the school because my husband is uncomfortable with sending him in a cab or on a bus. UGH!!!

Any thoughts????

[Minnymouth]

Unfortunately you bankruptcy is based on your income for the last 6 months prior to filing........soooooo..... if your dh worked overtime and you work parttime job...... that money will be considered part of your average income....

If you no longer have that income coming in...... that can "hurt" your payback amount and make it larger.......

You did not state if you are filing together or just one of you is filing...... Often only one spouse file and they retain the good credit of the other spouse for future use.

Did you consult with more than 1 attorney?? What did the others say, Chapter or Chapter 13??

We need a little more info if we are to try and help you with some answers....

You might consider "not working" at all till the situation with the son is straightened out, especially if the extra income is going to add to your problems.....

Get back to us with some more info....

[Ortgeist]

Hi Minnie! Thanks for replying.
We are filing jointly. I have the better credit score. However, alot of the debt is in my name. Some of it is in his name, too. So we are stuck filing jointly.
I do have FMLA for 12 weeks if I need it but it is all unpaid. I only have about 6 hours of reserve time left for when I take off. I'm afraid to stop working.
I just got off of the phone with my lawyer and told him my situation. All he said was, "If your income is decreasing now, we will have to wait a month to include it in the filing." He then said something about a zero dmr? and that my income wasn't really the factor in the ch 13 plan. I didn't understand what he meant. Do you know what he is talking about?
He really only seemed concerned about me bringing in the last of the items he needs to be able to file my case. I guess it's not his job to worry about my families situation, but I'm scared of what the future will be if I don't address the fact that our income will be drastically reduced here and there over the next year (if not more). Really, with a child who has BP/ADHD- there's no way to know when things will happen, they just do.

[Minnymouth]

You did not say which you were filing 7 or 13?............. Did you attorney say which it would have to be..... or still deciding?......

If you file a Chapter 13 based on you income now...... it can be reorganized in the future and the payments adjusted as your income changes. Thats one reason why your attorney was not concerned about the wage issue right now.......

[JollyGG]

Is this the only lawyer you have met with?

It sounds to me like mabey you should meet with a few more lawyers before you file. It also sounds like waiting a little while to get a better picture of your anticipated income might be a good idea. Is there a specific reason you need to file soon?

It sounds to me like your best bet would be to
1. stop paying your cc card (which you have already done) and other unsecured debt. Stay current on any secured debt you want to keep.
2. Reduce / Adjust you work hours.
3. See if you can live on what you take home every month.
4. Interview a few more lawyers and
5. file when a look back at your last six months income is lower and when your income and expenses are more in line with what they will continue to be.

There is a good chance that you would be able to file a chapter 7 instead of a chapter 13 if you file when your income is at a low point. You will also at that point be able to include expenses for your sons medical care and new school (though private school tuition is under debate with the new law and depends alot on your cirmustances and your trustee). You'll have reciepts to prove your higher gas prices and you will have an overall better picture of your situation.

The median in Missioui for a family of four that I found was 63,847. With your decreased hours and quiting the part time job there is a good chance that just waiting a little time would put you under the median and qualify you for a chapter 7.
Also remember that the median is not the only test of weather or not you qualify for a chapter 7. Has your lawyer run the means test yet? If you haven't seen his copy you can do an online means test here http://www.legalconsumer.com/means-t...ator/index.php to get an idea where you stand.

[wrinkleigh]

If you lock yourself into a 13 right now, you will be saddled with payments that you could not possibly afford for the next 3-5 years.

Quit paying, start living on a cash basis, and wait it out for the necxt 6 months, then file. Let your income decrease and you will be below the means for a ch7. Most likely you will have to contend with collection calls, but most wont do anything significant before you could file.

[Ortgeist]

We are filing ch 13 as of right now. But as my income goes down, I thought that would just sabotage our ability to make ends meet if we have a monthly payment to a trustee that we could not afford.
Thankfully we do not have to pay the private school tuition. My son's school is responsible for that since they cannot provide him with the services he needs.
I think the reason why my lawyer is in such a hurry for us to file is that he wants to make the deadline for the month of May. It appears that he may not want to have to rework the figures after he has already done that for us. That's just my opinion anyways.
I am trying to line up new initial consultations with 2 different lawyers. I just want to see what they say about our situation since it's changing.
The problem is...I will be 25 days late with the mortgage this month and I'll be lucky that my paycheck and my husbands will cover that amount. We still have groceries, gas, and daycare to pay for. All of that with a paycheck that will be 13, possibly more hours short.
The car that we want to keep was 12 days late, but we paid it.
It's not like we are 30 or more days late on our mortgage or car, but these cuts in pay I can easily see pushing us over the 30 day late. I know we have to keep current on them so that we do not lose them.
I keep thinking that $350 a month payment to the trustee to cover the lawyer fees, car payment, and such isn't such a bad idea. But the real worry is that the trustee will balloon the payment to more than that. We could never pay more than $350!!!! That's for sure.