time to file?

[hooloovoo]

If you are going to file, will it be in the next 6 months? IMHO - I would seriously consider using that money to catch up on necessities rather than throwing it away on cc's if you are going to file.

If I'm going to file, it's going to be ASAP. Probably...

I've scheduled a free consultation with one place tomorrow so I can hopefully get some info on where I stand. I'm a bit perplexed by it though. I've only really found two places here (fairly small town). One guy won't even shake my hand until I hand over $1,000. The other place does a free initial 15-30 minute consultation, but that seems pretty short to really establish where I stand. But, I figure I'll go to that and if I'm not happy with them look into the other guy. Or see if I can find some other options.

Hopefully I can get enough info out of tomorrow to know whether I should stop paying. My big concerns right now are chapter 7 vs 13 and my assets. Specifically, a motorcycle worth about $3k (which I own and is paid off but via a verbal agreement is shared with my ex wife) and the house we are renting out (which my name is on the title and secondary mortgage, but not on the primary mortgage, has no equity). So, my only roadblock right now is if this would have any impact on the house or my ex wife.

[hooloovoo]

Well I had my consultation today and it was not terribly encouraging. Basically said that there's no way the courts would give me a household size of 4 on the means test, since I only claim 1 child on my taxes as a dependent. He said they may be able to argue 2.5 but that's about it. Given that, there's no way I'd qualify for chapter 7. He estimates that on a chapter 13 plan my payments would be $400 - $600 a month. He also said that I'd have to get rid of my car because the courts would say it's too extravagant (3 series bmw bought before divorce and child support). And, I'd have to surrender my interest in the house and turn it over to my ex wife (I'm pretty sure she wouldn't be thrilled about this), since it's currently a money losing proposition the courts wouldn't let me keep it.

Grrrrr.

They'd need a $200 retainer and the $274 filing fee, and the rest would be paid through the payment plan ($3,800 total fee). They seem a bit like a chop shop, lots of people going in and out, hurried, not terribly personal or friendly. I'm tempted to make some more calls but I need to decide soon if I'm going to pay my bills this month...

I'm also concerned about my payment amount. At $500 a month, if my unsecured debt is gone, I'd have $500 a month free after bills. If I get a cheaper car I could bump that up. But still, that's not a lot of money to support myself and my kids. It let's me pay for food and gas and that's about it. Clothing, entertainment expenses, doctors visits? Nope. On the one hand I'm better off, I go from having $0 a month free to $500. That's an improvement. But $500 a month after bills are paid isn't exactly going to put me in a safe zone where I'm pretty sure I won't be in trouble again in the next 5 years.

I forgot to ask about income too. If I do the means test for a household size of 2, based on my 6 month salary, my free income is $196 a month. If I did that and got a car payment down to $300 a month, my free money in the real world would be about $1k a month. Now that's good. But if I have to count 'gift' money (my parents lent me money to help with moving expenses in early october - $2500, and gave me money for christmas - $2300, and my ex wife gave me $1000 to cover short rent as our tenent was laid off for a bit, and I got a $350 refund from the gas company on my previous residence). If I include that in the 6 month average my payment amount is $1300 a month which there's no way I can afford! If I wait until the one's from october drop off then I'm at $800 a month which is still no good. Grrrr.

So basically retaining the lawyer means that:

1) I have to tell my ex wife and hand her the house, which will royally piss her off
2) Have to get rid of my car and pray that I'll be able to finance something reliable and safe enough for family use within a few months of filing for bankruptcy
3) Potentially have a chapter 13 payment that I can't afford

Now I feel completely stuck and like my only option is to hang in as long as I can and when I can't pay, stop paying.

[deadbroke99]

Go see a few more lawyers. Don't take just one lawyer's advice.

[hooloovoo]

I plan to if I can find anymore that will do a consultation. The one's I've called so far want cash up front. I'm not comfortable handing money over to someone I can't at least talk to. I wasn't all that impressed with this guy either, I get the impression they're kind of file em quick and move on type of firm...

[hooloovoo]

Well had my second consultation today. I liked this guy much better, he was more laid back, seemed less stressed out, actually talked to me rather than just rapid fire questioning to quickly get stats. On the flip side though, he seemed almost too laid back and said the other guy I saw was pretty good...

But, I did get to ask him about income and he said cash gifts do not count as income unless they are regular payments, so money my family gave me doesn't count. On the issue of the house he wasn't sure... He said that while it's true that they probably would want me to walk away from it since it's a money losing enterprise, the amount isn't huge and further, the divorce decree states that we split expenses on the house 50/50. So he basically said that regardless of what happens with mortgages, that decree is considered a non dischargable debt and they can't undo that, so I'd stay on the hook. He wasn't entirely sure about that though, but his guess was that while it's probably possible to get rid of my interest in the house if I wanted to, it would be most likely that I'd have to keep up the agreement. Since that's what I want to do (since it gets me tax deductions and doesn't screw over my ex who I have a reasonably good relationship with).

For household size, he agreed my household size is 2. Me and my daughter I claim as a dependent. He said, however, that they could argue for increased reasonable expenses due to the fact that I have two other kids half time as well. Specifically, my housing expenses require housing to hold 4 people, clothing for 4 people, and food for basically 2.5 people. Not sure how likely we'd be to get those but he said we could probably get some leeway on those.

Now, on the other hand, this guy won't actually be handling my case. He said his wife is assistant to the trustee in the area, so he can't handle chapter 13 cases due to a conflict on interest.... One of the other guys in the firm would handle it, who is out of town right now. They also charge more and require more of a retainer. But I liked the firm much better, since they were more of a real legal firm than a bankruptcy factory like the other place. I'm not sure if that's a good reason to pick a place though...

I'm also still torn on all of this. Basically where it stands now is that no one knows what would happen. There's the complicated issues of household size, rental property, etc. Depending on how it all goes, I could get a chapter 13 plan that let's me live within my means, or one that puts me back where I am in a year. If the trustee is tough and says no, household size of 2 only, then the guidelines don't reasonably apply to my actual expenses.

I don't really want to shell out money to a lawyer and hope I get a result I can afford... I could spend $1,000 only to find out I can't afford to file for BK and now I'm out $1,000 as well. What do I do then, move to mexico?