Third BK consult..BAFFLED!!!

[toomuch]

I consulted with a third lawyer today. She does nothing but BK.....26 years. I was told to bring all my bills, hubby's pay stubs, etc...
I took all kinds of stuff. I was ready. I pulled 3 credit reports on each of us before going. Had everything labeled so I could pull it in a second.
I told her I have no income....hubby is sure to bolt in the near future, blah, blah, blah. I wanted to file a Chapter 7 and start setting myself up for the divorce.

Well, first of all, all she looked at was his pay stubs. She never looked at 2006 tax return, nor the bills, nor the exact amount we owed to everyone.

She said if I file a 7, we lose the house. Her main concern was what I thought it would sell for right now. I showed her the property value statement from the county, but she said I need the house appraised.....and then the trustees realtor would also appraise it.

In October and November, I got back two years of income tax returns and also money from my cancer policy benefits. I asked if I had to show where that money went. She said no. It just had to be considered income. Huh?????? I've been reading this board for over a year and everyone says keep receipts on EVERYTHING.

Then I asked if hubby should claim more dependents during the year so we may break even, instead of getting money back. She said no, that that would increase his monthly income and he'd have to pay more per month to the trustee.

I asked wouldn't the trustee get our income tax refund anyway and she looked puzzled and said "why no. I've never heard of them doing that." Huh???????

She said to get the house appraised. If I file a 7, I have to count hubbys income as mine and we lose the house but walk away with approximately 21,000 in equity. She didn't say if we would lose any material things. Didn't even mention it. Only concerned about property and cars.....secured debt.

She said if we file a 13 together, we keep the house and pay back $808 a month, which would be deducted from hubby's paycheck weekly. That would include my car payment. Can't claim his because when he went to his Mom's for Thanksgiving, she bought him a car in her name and he makes the payment and insurance. He turned in his Ford truck, which was 545.00 a month (I know....)

Right now, Chase is garnishing his wages, which is over $200 a week or 25%, whichever is greater....I guess until the $12,000 is paid off. Then another cc debtor will step in.

I was sooooooo psyched into a 7 for me and get the heck out of Dodge. I know he will bail before 5 years is up. I doubt he'll last a year or even 6 months. He is a loose cannon. He's so "woe is me". He has one of the best jobs a person could ask for....good money....benefits...hours (third shift which I HATE because I NEVER get any time alone except when I'm sleeping. Any woman will understand it's hard to clean house or do anything with someone sitting in front of a blaring tv most of the day......then sleeping through late afternoon and evening, going to work at
10pm.) I have begged him to go back to second shift or days but he refuses. Ahhhh....sorry to ramble about that. It's not like y'all can do anything about that.

So.....now I wonder if I should see yet a 4th lawyer or just throw in the towel and do it. I do have to wait until we file our 07 taxes and also get the rest of my cancer benefits. I am determined to get something out of the treatments I endured and complications I am still suffering with. She told me to file for disability yesterday. Not to wait one more day.

So, one of my main concerns is that my stepfather co-signed for me to get a car a 3 months ago. He did it, but doesn't want a blemish on his credit and I dont blame him a bit. So if I file a 13, keep the car, won't it affect his credit is some way??? He's been a tyrant all of his life and if that were to happen, I can't imagine what my poor Mom would have to listen to day in and day out.

Sorry so long. I am totally baffled over the consult. Worried about my stepfathers credit. Disgusted with myself that I didn't get out of this hell hole years ago.

Thanks for listening. Any input is appreciated

TOOMUCH

[One Half Full]

Hi, I don't know anything, and am no one, but I'd say, yes. Get another opinion. If it makes you feel better about it, you should. You seem to sense the impending doom they do not see. I mean, what I see is that you might be left holding the bag if there is a 13. It might well become a 7, so why shouldn't it be a 7 right off? You have a time-line and all your paperwork together. I get the feeling everything is done very quickly over the internet. You need to find someone who will represent you. The lawyer should be interested in trying to help you. If things seem fishy, I'd say, get another opinion.

[Bandit]

I asked wouldn't the trustee get our income tax refund anyway and she looked puzzled and said "why no. I've never heard of them doing that." Huh???????

what? never heard of that? What law school did she go to? That is up to the trustee anyway, not her. That is the kind of stuff that made me want to scream when talking to these people.

[woohoogirl]

I think another opinion would be good as well. If you don't feel comfortable with what she said, then how can you feel comfortable with the advice she gives you?
Don't beat yourself up over not getting out of your situation earlier...hindsight is 20/20. I think everybody hear will agree. Keep us posted. Good luck!

[woeisme]

If she's done nothing but BK for the last 26 years, and never heard of the trustee taking tax returns, it's a good bet that in your area, your trustee doesn't take tax returns. At least that would be a reasonable conclusion to me. My trustee doesn't take tax returns unless they are over $6500.

But in my case, her advice to add all kinds of exemptions to my W-2 wouldn't help me either because the way they calculated our payback amount for the CH 13 was based on GROSS salary, not net anyhow. (Well, gross with some adjustments for "allowed" deductions like health care, life insurance, etc., and then once the trustee had a good idea of our taxable income, he knew about how much we'd really owe in taxes and used that number, if we withhold too much, then that's just less money per month we have, not less money we have to pay the plan.) I suppose since he doesn't know every detail of our tax filing, like exactly how much our student loan deduction is, or if we are going to use the standard deductions or itemize, he could be a little off, but they have so much information about you they can make a real good estimate of your real tax liability, so he keeps his hands off the refunds presumably because he knows that we're only getting a refund because we withheld too much from our monthly budget, not from his monthly payment.

My trustee is super-fair all around though, he only takes a 2.7% fee for the plan payments, and our payment plan is very reasonable in my opinion, much less than I thought it would be, and he never batted an eye (we're paying $1100 a month when I figured it'd be more like $1500-1700) so I'm just thanking my lucky stars. Of course I'm only 5 months into a 59 month plan, so am knocking on wood as I type!

[toomuch]

If she's done nothing but BK for the last 26 years, and never heard of the trustee taking tax returns, it's a good bet that in your area, your trustee doesn't take tax returns. At least that would be a reasonable conclusion to me. My trustee doesn't take tax returns unless they are over $6500.

But in my case, her advice to add all kinds of exemptions to my W-2 wouldn't help me either because the way they calculated our payback amount for the CH 13 was based on GROSS salary, not net anyhow. (Well, gross with some adjustments for "allowed" deductions like health care, life insurance, etc., and then once the trustee had a good idea of our taxable income, he knew about how much we'd really owe in taxes and used that number, if we withhold too much, then that's just less money per month we have, not less money we have to pay the plan.) I suppose since he doesn't know every detail of our tax filing, like exactly how much our student loan deduction is, or if we are going to use the standard deductions or itemize, he could be a little off, but they have so much information about you they can make a real good estimate of your real tax liability, so he keeps his hands off the refunds presumably because he knows that we're only getting a refund because we withheld too much from our monthly budget, not from his monthly payment.

My trustee is super-fair all around though, he only takes a 2.7% fee for the plan payments, and our payment plan is very reasonable in my opinion, much less than I thought it would be, and he never batted an eye (we're paying $1100 a month when I figured it'd be more like $1500-1700) so I'm just thanking my lucky stars. Of course I'm only 5 months into a 59 month plan, so am knocking on wood as I type!

I have decided that the lawyers can tell you just about anything but once you file, it can all change.

I just put my car up for sale and pray it will sell soon. Then I will look for an older car, pay cash and put a new engine, etc in it. I make frequent 8 hour trips alone to visit my mom who most of you know has a rare brain cancer. I need a dependable car. I know a new one can break down too.

Oh, what you said about trustees not taking the income tax refunds in this area may be true. If they do, I just won't put so much effort in to the long form.



Toomuch

[woohoogirl]

Oh, what you said about trustees not taking the income tax refunds in this area may be true. If they do, I just won't put so much effort in to the long form.

I'm not advocating fraud, but what if you file your basic tax return and when all is said and done, amend it? I know that that was the recommendation of some of the tax preparers, because I needed to get my refund to pay property taxes and insurance and didn't want to wait until the middle of February to be able to use one of those five forms that the IRS had to change at the last minute. Of course the credit I am getting is about $150, but that $150 more than I have. From all I've read you have up to 3 years to amend a tax return. Like I said not advocating lying, but seems that a loophole that could work in someone's favor.

[Flamingo]

I asked wouldn't the trustee get our income tax refund anyway and she looked puzzled and said "why no. I've never heard of them doing that." Huh???????
(Big snip of posting....)

Get another opinion - Do yourself a favor and call your State Bar Association. Ask for the names of the top BK lawyers in your state - they should all be giving free consultations. We used the best in our state (the fee was not higher than other BK attorneys) and got what we paid for as to service and good advice. She also gave us good recommendations for after BK survival and broker references for refinancing.

[Boscoe]

The comment about you losing the house may not be accurate....You can keep your house in a 7 if you are current with the payments and do not have excessive equity. Which is the story in your case.

Definitely see a couple other attorneys!