Met with Attorney... what do you think?

[amc3000]

Well, went yesterday and met with an attorney. Thought id share my experience and see if this sounds right

Long story short...he basically told me this. I have two options:

A. I fail the means test if I dont want to reafirm my 3 secured loans. He said the only way I can file CH7 if I reafirm my 3 secured loans. That way those payments stay on there and then I pass (or fail however you want to look at it) the means test and I qualify for CH7. But, if i dont want to keep my secured loans, I cannot do 7 and only 13. This is really doesnt make since. If i include them which i need to, i cant do 7, but if i reafirm i can do 7. Sounds like im screwed either way.

B. I do Ch13. I give up my 3 secured loans, and then whatever negative I owe gets rolled into my 60 month payment plan. My payment plan came to like 600 +/- a month for 60 months.

$1800 for Ch7 (including Credit Counseling and doc fees, have to pay upfront)
$3500 for Ch13 (which get rolled into montly payment)

So, basically I can only do 7 if I reafirm my securd debt. Which, that would be ok, but i really really dont want my truck. I guess I can reafirm the loans, then sell my truck if i like right?

Sorry for the long story, but just wanted to get some feedback on my visit and see what all you thought. Thanks so much!!

[Dirk Squarejaw]

A. I fail the means test if I dont want to reafirm my 3 secured loans. He said the only way I can file CH7 if I reafirm my 3 secured loans. That way those payments stay on there and then I pass (or fail however you want to look at it) the means test and I qualify for CH7. But, if i dont want to keep my secured loans, I cannot do 7 and only 13. This is really doesnt make since.

If you don't reaffirm and quit making payments on those secured items, then it gives you more disposable income and that money would then be paid to the trustee in a BK13.

[amc3000]

so how does one get to do a CH7 with a clean break? I guess have all unsecured loans?

[emoney]

Why would you not think the advice is not legit?
regards,
emoney

[amc3000]

well, legit may not be the right word. But i was just posting and trying to get some feedback. Ive never done this before and need advice. Just confused on the whole, i cant do a ch7 because if i did i would have extra money, but if i reaffirm i can do a ch7 but dont want the secured debt.

[krielly]

I guess the question that comes to mind is how much do you owe total on your secured loans?
Sounds like it will cost you $36,000 in payments through a five year plan (not to mention being under close scrutiny of the trustee for the next 5 years. I would add that this figure is the minimum you would probably be paying, in that if your income increases substantially, you could be ordered to pay more. In addition, you could be forced to give up any tax returns or possible windfalls over the next 60 mos.

You don't say much about the secured debt. How much is it, and what is it for?

If you filed 7, and re-affirmed, could you sell those assets after discharge and pay off the secured debt?

K

K

[bkhelper]

What is the condition of your truck? (miles, age, etc.)

[amc3000]

i owe about 26k on them. He factored in his fees, and negative equity of about 6k after they sell off my truck/motorcycle. 3 secured are truck, motorcycle, and a bedroom suite. I am leaning towards the 7 and selling the truck and motorcycle in the future.

Truck is a 2005 dodge ram 1500. 43k miles. Good condition.

Thanks for the responses!!!

[krielly]

I guess personally I would see this as a no brainer.

Pay 36K + over a 5 year period (under trustees thumb)
vs:
Pay 26K with the potential to sell off some of these after discharge and not have a trustee watching you for the next 60 mos.

hmmmmmmmmmmmmmmmmmmmmmmm
Seems clear cut to me, unless I am missing something

[tay666]

so how does one get to do a CH7 with a clean break? I guess have all unsecured loans?

That comes down to how much money you make, and what state you live in.
The more money you make, the less likely you are to be able to do a CH7 unless you have secured debt that is eating up that income.

We will be able to do a BK7 and get a clean break with no debts.
But we also make well under half the median income for our state.
So most of our income goes straight to necessities like utilities and food.

[bkhelper]

Keep in mind that if you re-affirm any debt (ie. the truck) that continuing paments on the vehicle is not considered re-established credit. I'm not saying you shouldn't file the bk7, but their is more to it than just the immediate dollars.

[amc3000]

yeah, it is kinda a no brainer. Thanks for the help krielly.

tay666, yeah, i guess mine is a little different. For my state, im a little above the median so i guess i run into that problem.

i guess my hang up was if not being able to put my secured debt into the Ch7 because doing that frees up money (that is not really free) and keeps me from doing it. Just seeing if that was the norm.

[tay666]

Not the norm.
But it does happen.

Personally I think reaffiming so you can get a CH7.
Then selling the items that create the secured debt sounds like possibly the best approach.

I mean, regardless of the outcome, you are going to need a vehicle and a place to call home.
So you will have some sort of debt after BK anyway.

You didn't say how much other debt is going to be wipped out in your BK.
Instead of dwelling on what seems like a negative.
Look at the positive, and what you won't owe anymore, and the possibilities that opens up for you.

[amc3000]

thanks much tay666. yeah i think you are right. I will be wiping off about 19k of unsecured debt if i go with 7 and reaffirm the secured.

[krielly]

Let us know how things progress!!!!!!!!!