Met with Attorney - Could be a "tight" Ch 7

[mysterie91]

We met with another attorney this morning and he went over all of the figures with us. It was much better than the first attorney we saw.

At first when he saw our income he said - It's a 13 - then he saw the expenses and said "well, let's take a look at the Means test for Ch 7". It looks like we would BARELY squeak by with a 7. He said he really wasn't comfortable attempting a 7 with it that close but it was possible to try and claim special circumstances of high medical expenses.

He did a chapter 13 calculation that included our student loans of $48700.00 and credit cards of $34000.00. The monthly payment included that plus the car payment. It would be $500 or so for 60 months. That is actually lower than we pay now for student loan and car but the interest accrued on my husband's student loan is ridiculous. My 2 year old son will be out of college before its paid off!

He gave us 4 pages of document to get together and said the total fee would be estimated at $1400.00. No case can be filed until paid in full. He said if we go 7 we must sell my husband's car or pay the equity outside of exemption to keep it.

Now - he wants proof for all medical and healthcare figures as this is the basis for our Chapter 7 case. I certainly did not make the numbers up as I have my checking account in a MONEY program but I don't have all the individual receipts. Everything shows on credit card or bank statement but would that be enough to a trustee?

He said we could always convert to a 13 if the 7 is denied by the trustee but it will be more money and work in the long run.

My hours may be reduced and he said the other option is to try to "wait and see" what happens as reduced hours means less pay and that means less of a problem with the figures. But the creditors are out of control with the calls every day and I would like to get this out of the way sooner than later. And there is no way of telling what will happen job-wise.

Anyone have any advice? My gut tells me gather up the fee and try for a Chapter 7 and if we must convert to a Chapter 13 then so be it.

Does anyone know if this happened would be be able to convert back to a Chapter 7 if my hours were cut or are we barred from that since we already went 7 to 13?

Any other advice would be helpful. Thanks!

[klux]

"He did a chapter 13 calculation that included our student loans of $48700.00 and credit cards of $34000.00. The monthly payment included that plus the car payment. It would be $500 or so for 60 months."

Not to be a downer, but just the student loan of $48,700/60 months = $811.66/month without interest. Then you'd have your car payment. Are you sure he wasn't giving you a bi/weekly payment?

[CindyLou]

In a 13 the student loans woud be in deferment/forebearance if they couldn't be paid in full in the the 60 months so he probably wasn't including them at all.

[dscurlock]

We met with another attorney this morning and he went over all of the figures with us. It was much better than the first attorney we saw.

At first when he saw our income he said - It's a 13 - then he saw the expenses and said "well, let's take a look at the Means test for Ch 7". It looks like we would BARELY squeak by with a 7. He said he really wasn't comfortable attempting a 7 with it that close but it was possible to try and claim special circumstances of high medical expenses.

He did a chapter 13 calculation that included our student loans of $48700.00 and credit cards of $34000.00. The monthly payment included that plus the car payment. It would be $500 or so for 60 months. That is actually lower than we pay now for student loan and car but the interest accrued on my husband's student loan is ridiculous. My 2 year old son will be out of college before its paid off!

He gave us 4 pages of document to get together and said the total fee would be estimated at $1400.00. No case can be filed until paid in full. He said if we go 7 we must sell my husband's car or pay the equity outside of exemption to keep it.

Now - he wants proof for all medical and healthcare figures as this is the basis for our Chapter 7 case. I certainly did not make the numbers up as I have my checking account in a MONEY program but I don't have all the individual receipts. Everything shows on credit card or bank statement but would that be enough to a trustee?

He said we could always convert to a 13 if the 7 is denied by the trustee but it will be more money and work in the long run.

My hours may be reduced and he said the other option is to try to "wait and see" what happens as reduced hours means less pay and that means less of a problem with the figures. But the creditors are out of control with the calls every day and I would like to get this out of the way sooner than later. And there is no way of telling what will happen job-wise.

Anyone have any advice? My gut tells me gather up the fee and try for a Chapter 7 and if we must convert to a Chapter 13 then so be it.

Does anyone know if this happened would be be able to convert back to a Chapter 7 if my hours were cut or are we barred from that since we already went 7 to 13?

Any other advice would be helpful. Thanks!

i heard many times that you could not write off student
loans in BK, much less them being discharged in 5 years...

ive also heard that Chep 13 fees are included and very
little comes out of pocket, I could be wrong...

[dscurlock]

We met with another attorney this morning and he went over all of the figures with us. It was much better than the first attorney we saw.

At first when he saw our income he said - It's a 13 - then he saw the expenses and said "well, let's take a look at the Means test for Ch 7". It looks like we would BARELY squeak by with a 7. He said he really wasn't comfortable attempting a 7 with it that close but it was possible to try and claim special circumstances of high medical expenses.

He did a chapter 13 calculation that included our student loans of $48700.00 and credit cards of $34000.00. The monthly payment included that plus the car payment. It would be $500 or so for 60 months. That is actually lower than we pay now for student loan and car but the interest accrued on my husband's student loan is ridiculous. My 2 year old son will be out of college before its paid off!

He gave us 4 pages of document to get together and said the total fee would be estimated at $1400.00. No case can be filed until paid in full. He said if we go 7 we must sell my husband's car or pay the equity outside of exemption to keep it.

Now - he wants proof for all medical and healthcare figures as this is the basis for our Chapter 7 case. I certainly did not make the numbers up as I have my checking account in a MONEY program but I don't have all the individual receipts. Everything shows on credit card or bank statement but would that be enough to a trustee?

He said we could always convert to a 13 if the 7 is denied by the trustee but it will be more money and work in the long run.

My hours may be reduced and he said the other option is to try to "wait and see" what happens as reduced hours means less pay and that means less of a problem with the figures. But the creditors are out of control with the calls every day and I would like to get this out of the way sooner than later. And there is no way of telling what will happen job-wise.

Anyone have any advice? My gut tells me gather up the fee and try for a Chapter 7 and if we must convert to a Chapter 13 then so be it.

Does anyone know if this happened would be be able to convert back to a Chapter 7 if my hours were cut or are we barred from that since we already went 7 to 13?

Any other advice would be helpful. Thanks!

What debts are not erased by bankruptcy?



The following debts are not erased in either Chapter 7 and Chapter 13. If you file for Chapter 7, these will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If they are not, the balance will remain at the end of your case:

Student loans, unless it would be an undue hardship for you to repay;

[mysterie91]

I contacted the paralegal for the attorney and she said that indeed it is correct that student loans are not dischargable. They are included in the monthly payment but they DO NOT have to be
paid in full within the 60 months. In a Chapter 13, all consumer debt - credit cards, car loan, student loans - are totaled together.

What really determines what you pay per month on your debts is your disposable income per month based on Schedule I and J. If you can afford $500 per month then the plan is based on that number. You could end up paying next to nothing on any debts each month. BUT you must pay back through the plan as much as your creditors would have received if you had filed a CH 7 and had your non-exempt assets liquidated. So if in a 7 your car would have been liquidated and creditors would split $10K then the payments through a 13 must be at least this much.

Now for student loans, the amount you pay each month into the plan is paid out to them - again very little to next to nothing - and after the 60 month period is over the student loan remains, with interest that has accrued during the 60 month BK period. You are then responsible for paying off the remaining amount of student loan just as you would be had you never filed a BK.