Bankrupty Limbo? Lawyer unsure if we're Ch7 or Ch13

[Sherri]

We retained our lawyer a few months ago, gave all the preliminary information and the paralegal assured us we pass the means test for Ch7. Gave the balance of our paystubs, bank account info, bills, etc., paralegal says we're over the median for income, but still pass the means test for Ch7. We made an appointment for today to go over the petition and sign papers to file... got to the lawyers office and he tells us, we're having a problem with your numbers. Too much income (ironically, this is the first winter in years my husband has worked the whole winter, and a couple of those months were banner months, income-wise, for us), they're working the numbers. We may have to go Ch13... and my lawyer fears we could be looking at five years of up to $900 a month payments.

We walked into the office today planning to sign to file Ch7, and walked out with homework, no definite Ch7 and a possible Ch13 with high payments? If we had filed last winter, or any of the winters before that, husband would've been laid off and our income would've been way below the line. We have one decent winter, and it's going to work against us? To say I'm beyond disillusioned and livid would be an understatement. If we had an extra $900/month, would we be in this mess? How can the bk court force us to cough up so much money if it's just not there? Do we end up losing our house and car anyway, when we were assured we could keep everything? I know I know, all questions for the lawyer, but I need to vent before I explode.

I don't know what to do. Lawyer is crunching numbers and is concerned about our case NOW?? how many months into it?? Lovely.

[helpmeout]

FYI, your attorney will make more money if you do a Chapter 13. If this is the only attorney that you have interviewed, I would look around. Also, do you expect your income to go down, such as not having those banner months? If so, you can also wait until your 6 month look back goes down. You are the one who is in control of when you file. You can also post a list of what your attorney has listed for your expenses and we can take a look and see if there was anything missed.

[IamOld]

We retained our lawyer a few months ago, gave all the preliminary information and the paralegal assured us we pass the means test for Ch7. Gave the balance of our paystubs, bank account info, bills, etc., paralegal says we're over the median for income, but still pass the means test for Ch7. We made an appointment for today to go over the petition and sign papers to file... got to the lawyers office and he tells us, we're having a problem with your numbers. Too much income (ironically, this is the first winter in years my husband has worked the whole winter, and a couple of those months were banner months, income-wise, for us), they're working the numbers. We may have to go Ch13... and my lawyer fears we could be looking at five years of up to $900 a month payments.

We walked into the office today planning to sign to file Ch7, and walked out with homework, no definite Ch7 and a possible Ch13 with high payments? If we had filed last winter, or any of the winters before that, husband would've been laid off and our income would've been way below the line. We have one decent winter, and it's going to work against us? To say I'm beyond disillusioned and livid would be an understatement. If we had an extra $900/month, would we be in this mess? How can the bk court force us to cough up so much money if it's just not there? Do we end up losing our house and car anyway, when we were assured we could keep everything? I know I know, all questions for the lawyer, but I need to vent before I explode.

I don't know what to do. Lawyer is crunching numbers and is concerned about our case NOW?? how many months into it?? Lovely.

Hi - for whatever it's worth we're in the same boat - find out what's going on in about a week. Either Ch 7 or 13 is expensive with our lawyer. I don't honestly think it's the money, its just that I think sometimes assumptions are made...HELPMEOUT is right - if you're not too far behind on bills - that is lawsuits are far far away, you can afford to wait IF you know for sure that the income will drop. Unfortunately I'm looking at a lawsuit in about a month or two so I can't really wait...

[LadyInTheRed]

Sherri, ask your lawyer about taking a forward looking approach based on the Lanning case. If you search the forums, you will find info on the decision. I think there may also be a sticky about it.

I don't agree that an attorney necessarily makes more money from a Chap 13. The fee may be higher, but a Chap 13 requires more work. That's why courts that set "no-look" limits for attorney fees, including New Hampshire, allow higher limits for Chap 13 than for Chap 7.

[StartinOver]

what are "no look" limits?

Sherri, if you need another attorney to consult, I can offer contact info for mine. I'm very happy with how much he's been willing to answer questions even before we retained him, went over our numbers, gave us two free consults, because I consulted him way early before I was convinced we were going to have to go BK... etc...

Now, we've retained him and the creditors are told to call him and he's helping us do a strategic planning of our filing. We haven't filed yet, but the stress is largely already gone, because he's so responsive.

[LadyInTheRed]

what are "no look" limits?

I knew I should have explained that! It's the maximum fee a lawyer can charge a debtor for a BK without having to petition the court for approval. Some courts have it, some don't. In NH, it's Administrative Order No. AO 2016-1 which can be found in the following PDF: http://www.nhb.uscourts.gov/OrdersRu...F_Redlined.pdf See page 62 of the document, which is page 69 of the PDF file.

[BKAttyMI]

Yes, I make more overall on a Chapter 13 than on a Chapter 7, but do I want more 13s versus Chapter 7s? Probably not. Chapter 13s require far more paperwork, at minimum two court appearances, a wait of several months to get paid and the chance of not being paid at all. I'd much rather squeeze someone into a 7 if possible and have it over and done with.