Is there any way we could file a 7?

[contemplate]

Hi all. I have only posted on the 13 board but... My DH is talking about 7 tonight so here is my story. We met w/ an attny for consult in Dec. He said we make too much for a 7. However, I am a teacher and have been told I will be losing my job due to low enrollment (my performance & evals have been stellar but am the new kid on the block so first to go.) Anyway DH said at his work 36 hrs is considered full time. If I lost my job, and DH went down to 36 could we file 7? Do you know if anyone would protest that DH is working full time- would he have to be working 40 hrs. ? Are we grasping for straws. Thank you so much for your time & response!

[Meatstick]

I would consult another lawyer, someone who can gauge what your finances will be after losing your income. If your over the median income and don't have allowable expenses you may very well be able to fund a Ch.13. I wouldn't just take one lawyers opinion though.

[lrprn]

We met w/ an attny for consult in Dec. He said we make too much for a 7.

First, you should never take the word of one attorney, especially if that attorney based his Ch 13 opinion solely on the amount of money you two make. Set up appointments with at least 3-4 other experienced bk lawyers in your area with a lot of experience filing both Ch 7 and Ch 13.

However, I am a teacher and have been told I will be losing my job due to low enrollment (my performance & evals have been stellar but am the new kid on the block so first to go.) Anyway DH said at his work 36 hrs is considered full time. If I lost my job, and DH went down to 36 could we file 7?

Whether filing a Ch 7 is possible or not depends completely on how you two come out on the required Means Test and Schedules. What's the distribution of your combined income now and after you lose your job? What's the size of your household? What state do you live in?

Do you know if anyone would protest that DH is working full time- would he have to be working 40 hrs. ? Are we grasping for straws.

When you file bk, the trustee takes what the employment situation is when you file. The court cannot force anyone to work even if they could. Four less hours a week won't matter at all.

Again, the key in your situation is how your unemployment will impact the six-month lookback for your combined income from all sources. Can you both wait to file until your combined income drops below your state's median income for family size? Even if you two are still over the median, your assets and expenses on your filing forms could show that you have less than $100/month disposable income and thus cannot support a Ch 13 plan.

We can help you sort things out better if you'll share a little more detail about your situation - your state, your family size, your combined income from all sources now before you leave your job and what it will be after, what secured assets you hope to keep when you file, and if all the payments for your assets you want to keep are up to date. That's a good start for now.

Hang in there. You've already made the most important decision - to deal with your rapidly failing financial situation and find out as much as you can about what to expect. Good for the two of you!

[HHM]

First, you should never take the word of one attorney, especially if that attorney based his Ch 13 opinion solely on the amount of money you two make. Set up appointments with at least 3-4 other experienced bk lawyers in your area with a lot of experience filing both Ch 7 and Ch 13.

I wouldn't agree with that statement. Most of the time, that is all the attorney has to work off in the initial consultation. What you want to be careful with is an attorney that says, "if you are over median, you cannot file chapter 7". However, if an attorney knows how much you make, and has a basic idea of your expenses (namely housing and car loans), any reasonably experienced attorney can pretty well determine if the person is likely a chapter 7 or 13.

The analysis is actually fairly straightforward, if the debtor is only slightly over median but has higher than allowed mortgage and car notes, they are probably still good to go with chapter 7; if the debtor is significantly over median with house and car payments close to allowed, there is no way they would be a chapter 7; if the debtor is significantly over median, but also has significantly higher than allowed housing and car expense; then the debtors options will depend on what the district really allows as a reasonable expense.