Question Monthly Disposable Income.....

[meoops]

We received our filing paperwork yesterday. It states we will be filing Chapter 13.

It has that our Disposable Monthly Income is $527.80. What will that make our monthly payments be? Will the Trustee change us from Chapter 13 to Chapter 7?

Also, reading the posts I am scratching my head on what our attorney charges. Our attorney charges $3000.00 plus filing fee for Chapter 13 and $1500.00 plus filing fees for Chapter 7. I hope I am not being ripped off...I did a check on the lawyer before seeing her.

Thanks in advance for any answers you give me...

[meoops]

Correction...

I forgot to add the minus sign....our disposable income is -$527

[HHM]

If you have negative DMI, you would not necessarily need to file a chapter 13. Is there a reason you need a chapter 13, i.e. save your home, etc?

As for the fees, those fees are reasonable. The attorney is simply saying that if your case is a chapter 7, it will be $1,500 plus filing fee, and $3,000 for a chapter 13. Odds are, you only need to come out of pocket the $1,500 and your attorney will roll the other $1,500 into your chapter 13 plan.

[meoops]

Reply

Thanks for the fast reply.

Yes, we want to keep our home. But can you file Chapter 7 and still keep your home.

As for the Chapter 13 negative disposal income - if it show we are negative, how will they figure our payments?

Thanks again...

[LuciluS]

Are you current on your mortgage payments and if you have a second mortgage current?

Some districts/states require you must be current in order to file a Chapter 7. Our BK Attorney told us it was a requirement. We are in the Eastern District of Arkansas.

Just some info to pass along

Luci

[meoops]

Reply...

We are current but we have been paying a bit late each month ... like the payment would be due on the 1st and they receive the payment on the 17th. We only have the one mortgage.

[LuciluS]

Just by the info in your posts, sounds like to me you have an Attorney who has $ signs for eyeballs as they make more in a Chapter 13 versus a Chapter 7.

I hope your Attorney has filed your Bankruptcy yet. I would call him Monday and demand a Chapter 7 be filed. If has already filed, demand he convert your case to a Chapter 7.

I can't believe the Attorney would show a negative disposable income in a Chapter 13, unless he is not confidant all of your expenses will be approved by the Trustee.

I just finished the below posting. Take time to look at the info below.

Here is the National Standards for determining the State Median for the Means Test:

http://www.bkforum.com/newreply.php?...ote=1&p=294728

Scroll down to:

The original source for the State Median Family Income is the Census Bureau.
The original source for the National and Local Standards is the IRS.

You might also 'Google' your city,state and type bankruptcy after the city,state. Your specific District should have a website with a lot of information about Bankruptcies.

Also, you can look at the other websites that appear from the above paragraph and learn info specific to your district, also.

One of the forum members Debtstinks has written an easy means tests. Here is the website:

http://www.johnfire.com/meanstest/wizard.php

Hope this helps!

Luci

[meoops]

Thanks....we have not filed yet but received the paperwork. We will call monday for an appt and I have a list of questions to ask her.

I was so confused over the Chapter 13 she wants us to file since the disposal income is negative that much....how would the trustee figure what we could pay if there we were in the hole.

[liz417]

Hi
I hired the 1st attorney I consulted with and was told by this attorney that I would have to do a ch 13 because I am over the median. I believed him because I didn't know any better, I soon found this site, did the means test myself (several times) and found out that I passed! When I raised these issues with my attorney (at the time), he refused to listen...insisted on a ch 13 (he was paid in full at that time, 4k ). I KNEW I could qualify for a ch 7 and insisted he file that for me...he quit the following week.
I found a new attorney and filed a ch 7 in May

Talk to your attorney, but s/he may be "set" on filing a ch 13 for you...my suggestion, read up on everything you can...don't get stuck in a ch 13 if you qualify for a ch 7 and be prepared to walk away from this attorney (you may lose some of your $$).

Good luck to you~

[StartingOver08]

Liz, you forgot to tell the OP the best part - didn't you have to interview 6 attorney's to find the right one? (I think it was 6 or maybe even 7).

OP, don't let this attorney file a 13 for you...find an attorney that knows what they are doing and is looking out for YOUR best interest.

[HHM]

Some districts/states require you must be current in order to file a Chapter 7.

Just for clarification, that is a requirement in ALL districts. There is no chapter 7 mechanism that can force the lender to consider the debtor current on their mortgage.

Before you jump ship on the attorney, ask the attorney why you should be a chapter 13. Maybe there are non-exempt assets you are trying to keep.

[meoops]

We have paid the lawyer in full. After consulting with her we told her we wanted to keep the house (owe $101,000.00) and the car (owe $6600.00). We got over our heads in credit card debt ($30,000.00). We are over the mediun income by $1500.00....that is why she said we had to go Chapter 13 and not 7. My husband got cut hours at work to 32 a week and if they would use the new gross pay we would be under the mediun.

But, with a negative disposable income I got confused. Could she file 13 for us and then be hoping the judge will change it to a 7?

[LuciluS]

We have paid the lawyer in full. After consulting with her we told her we wanted to keep the house (owe $101,000.00) and the car (owe $6600.00). We got over our heads in credit card debt ($30,000.00). We are over the mediun income by $1500.00....that is why she said we had to go Chapter 13 and not 7. My husband got cut hours at work to 32 a week and if they would use the new gross pay we would be under the mediun.

But, with a negative disposable income I got confused. Could she file 13 for us and then be hoping the judge will change it to a 7?

Yes, it's possible to convert. You've paid her for a Chapter 13 which is usually higher fees for a 13 than a 7. Are there any expenses which might be questionable by the Trustee used in determining the negative disposable income?

Is there any reason why you cannot wait until your under the State Median Income? When did your husband's hours get cut? You could keep a running 'tally' on your Gross Income. Have you stopped paying your Credit Cards? The 'lookback period' for State Median Income is the 6 months Gross Income preceding the month your case is filed.

We met with our BK Attorney late last Sept. He is paid in full for a Chapter 7 BK. We had heard 'Over the State Median Income' cases were being scrutinized by the US Trustee. So, we chose to wait until below State's Median Income as I was receiving some monthly monies deemed Income. Due to market tanking, I received my last pymt. in 2/09. Our Attorney had no problem with us waiting.

We will be filing in 9/30/09 using Mar - Aug. 09 Income. Most of our credit cards bills are in the hands of collection agencies as we've not paid on the majority since late Sept./early Oct. Have received a few form letters from the CAs and one from an Attorney who is not licensed in our State.

I've spoken with our Credit Card Cos. at least twice & informed them we were filing BK & gave info on our BK Attornies. Collection Agency(s) could file a Claim in Court to receive a Judgement. Our Attorney doesn't think there will be a court date set before we file BK. Filing BK will stop all lawsuits and judgements.

Not being able to use our credit cards since last Sept. has really helped us 'stick to a budget'. The first couple of months were tough, especially at Christmas time and having 3 precious grandchildren; however, we made it and have managed okay without the use of CCs.

Waiting has allowed us to keep at least 6 months of receipts especially if you shop at Wal-Mart SuperCenter, as Dh (who does the shopping) uses Wal-Mart as a One Stop Store. I'm able to break down the receipts into categorizes as Food, Personal Hygeine, household items, etc.. He also buys items he takes with him as he is a Long Haul Truck Driver.

Just some suggestions.

Luci

[meoops]

Thanks for reply.

There is nothing but our house, car and credit card bills so I can't think of anything that would raise an eyebrow by the Trustee.

We have not used our credit cards since last 7 months. We have no saving and pretty much live payday to payday. I cannot beleive we tried to keep afloat for so long when we knew the ship was sinking. What sunk us was the late fees from the credit cards and then the over limit fees. We stopped paying the credit cards in March 2009 and may monthly payments to our lawyer for the BK.

My husband got his hours cut a month ago....we knew it was coming though as he is a supervisor for a manufacturing company. My hours we only cut by 1/2 hours a week....lucky for us.

With the ecomony the way it is....we were scared of losing our home. We want to keep the home thought.

How do they figure what you can afford to pay each month on Chatper 13? We are currently only paying the house, utilities and car payment now. SThe lawyer suggested we put the car into the Chapter 13 also. Has anyone done this with their BK?

[LuciluS]

Thanks for reply.

There is nothing but our house, car and credit card bills so I can't think of anything that would raise an eyebrow by the Trustee. It's not your assets, I was concerned about. It is your expenses. The Attorney would have used your Gross Income minus your total of expenses (you should have a breakdown of how she derived to the total expenses) which equals your negative DMI of minus 527.

Let's talk about your Assets. How much is your home worth? Don't have a clue? go to realtor.com. There is a screen says how much is your home worth. Type in your address. It may or maynot list your home depending on when you purchased it. But this website does list the recent home sold in your neighborhood. Add up the total of the homes sold. Then add up the sq. footage of the home sold. Divide the two & you should come up with the $$ of square footage. Probably in the $75 - $100 range. Now take the total sq. footage of your home and multiply it by the 'sold sq. footage' That is a ballpark figure of what your home is worth.

Now you need to know the principal amount owed on your home, We received an Amoritization Schedule from our Title Company or you maybe able to go to your Mortgage's website and found out. If you have a lot of equity in your home, that maybe a possibility why your Attorney wants to file a Chapter 13.

Now your Car. Do you own it outright or do you have a loan on it? Need to come up with a ballpark figure of your Car's value. You can go to nada.com or kbb.com and punch in the specifics of your car.

Home Furnishings, Jewelry and Guns: Sure you have home furnishings, but are they worth much if you had to sell them in a garage sale. Jewelry or Guns?

We have not used our credit cards since last 7 months. We have no saving and pretty much live payday to payday. I cannot beleive we tried to keep afloat for so long when we knew the ship was sinking. What sunk us was the late fees from the credit cards and then the over limit fees. We stopped paying the credit cards in March 2009 and may monthly payments to our lawyer for the BK. Believe me, we wished we would have filed in 2007, but hindsight is 20/20 & CCs stuck it to us LOL!

My husband got his hours cut a month ago....we knew it was coming though as he is a supervisor for a manufacturing company. My hours we only cut by 1/2 hours a week....lucky for us. So if you wanted to be under your State Median you could wait and file in Dec. using your Incomes from June - Nov. You stopped paying your credit cards in Mar. of this year...filing in Dec. shouldn't be a problem.

With the ecomony the way it is....we were scared of losing our home. We want to keep the home thought. In a Chapter 7 bankruptcy, you need to be current. Filing a Chapter 7 or a 13, you will be able to keep your home, if you can afford the monthly payments & don't have more than around $20,000 in equity depending on your State.

That's another question if you so desire to answer the above questions. What State do you live in.

BTW (by the way), our BK Attorney charged us $1,300 which included the filing fee, 2 affirmations & present at the 341 hearing. We live in Arkansas, so I believe the charges maybe slightly lower as is our State's Median Income.

How do they figure what you can afford to pay each month on Chatper 13? We are currently only paying the house, utilities and car payment now. SThe lawyer suggested we put the car into the Chapter 13 also. Has anyone done this with their BK?

I don't know that much about a Chapter 13; however, common sense tells me it would be insane for an Attorney to file for a Chapter 13 with a dmi of negative $527, unless the Attorney knows some of your expenses might be questioned and reduced by the Trustee.

Spend a lot of time reviewing the paperwork the Attorney gave you especially Assets and Schedule I and Schedule J before your Appointment with your Attorney. Like HHH said you may have Assets your Attorney deems non-exempt, After reviewing the Attorney's paperwork and you have other questions, please feel free to post them.

Luci