Help - Shocking news on day of filing

[GB2009]

Have been preparing all of the official forms to file Chapter 13 with our attorney for the past 3 months. On the day of filing attorney states that we would have a 100% repayment plan and it probably was not in our best interest to file.(never said this was possible during meetings) This is after more than 3 months of consultations and advice to stop paying all Credit cards and a secured loan which property was to be given up in Bankruptcy filings. The reason was our means test showed that is what the repayment plan would be even though we are around $2,000 in the hole every month. We now are in much worse shape because of her advice to stop paying anything towards unsecured debt. The reason we were going to file is income loss and very high amount of CC debt. What do we do now??

[BobMango]

I think your best bet at this point is to find another attorney. There is no reason to have this discussion on the day you planned to file. Your attorney should have run the numbers before telling you to stop paying on anything.

Seems like a lot of attorneys have the attitude that they are doing you a favor when you retain them and that regardless of how much (or little) time they spend on your case, you should be grateful.

[backtoschool]

I would definitely go talk to another lawyer. It may just be a case that you have to wait a few more months for some of your income in the look-back period of six months to fall off. If you had a large drop in income, you want your last six months to reflect that drop in income.

Even at a 100% plan, you are not paying any more interest or collection fees, so you would still come out ahead of trying to pay on the cards outside of the plan.

As regards to filing chapter 13 at a 100% plan versus settling the debts, that depends on whether you can take the tax hit of the 1099's that you would get for the balance that you did not pay in the settlement on each card.

In any case, you have options.

[bkondeff]

Can you share some of your basic numbers. You said you are $2k/mo in the hole, so I'm just not sure how you could end up repaying 100% of debt with that, so what is the disconnect between actual and attorney prepared means test? I am taking my parents in on Monday, and while my dad has $75m in income, he is also $2k/mo upside down due to high CC and Home Equity from medical bills.

[GB2009]

Bkondeff, the means test calculation to detemine your payment plan depends on the state. We qualified for Chapter 13 when the means test was initally done but when calculating the payment plan it came back as 100% of debts had to be repaid in 5 years. What made it even worse was that a 20 year loan on a boat (was going to give up in BK) was condensed into the 60 month plan and was told had to pay for it regardless, tripled the monthly payment. According to Attorney whatever the payment plan calculations spit out is gospel and no alternatives.

[sharina]

in a 100% plan, you should be able to pay less than your disposable income IF you can pay off all debts within the 60 months. This is the only bonus to me for filing a 100% payment plan.

The law is 100% OR all disposable. In my case, it was better to pay the 100% and go with a lower payment - my six month lookback had inflated #'s as most do now a days with job loss and pay cuts. Yes, I hate every minute of it, but in a year and a half I will be debt FREE.

[krielly]

You definitely need to talk to another lawyer ( or two).

For them to say you need to pay for the boat and cannot give it up, is pure BS in my opinion. Never heard of such a thing!

[whipster1]

Clearly some poor attorneys are getting clients in the door. A boat is a luxury item. You cannot keep luxury items unless you pay 100%. That attorney that said you must keep it and pay for it should be reported to the bar.

[klandsb]

WOW, that is crazy. After 3 mths into this that would floor me.. Yes, u need to talk to another attorney but just wondering if u can get your retainer fee back.. When your in this position its because money is tight or just not there. I went from a proprosed 17% payback according to my attorney's figures to a 71% payback in the trustees figures.. I am ticked at my attorney for messing up my I & J schedules... My 341 is this coming MONDAY and I am already starting to get the jitters... Something has to give here as they have already attached my wages and I am robbing peter to pay paul just to stay afloat.... I am not talking about all attorneys but it seems like with the economy its a huge windfall for the so-so attorney offices...Just my thoughts !!