First Step Down!

[Tater]

Hubby and I made our decision about our lawyer last night. What a relief! It is the last we met with one Monday morning. We feel that she is the right fit for us and will fight for us as her clients. She and her staff were well prepared when we came to the appointment and took nearly two hours with us during the free consult. She doesn't BS which is what we need in our case but was very empathetic at the same time.

She pretty much gave the in's and out's of the process in our area. She did ask if we are comfortable with doing a Chapter 13 if we can't qualify for a Chapter 7. We said yes but she wants to try her best to quality for us for a 7. She said it may take a few months but they are going to do a complete income analysis on us. It costs $200 but that goes to the retainer fee. I am sending a money order out for that today.

I may have to quit taking my unemployment in order to qualify. She asked if we could afford to do that. Yes, we can and we already have the money from the tax return for her fees and filing fee. One thing she is going to try to do for us is do a redemption on our older car. She has dealt with the local lender in the past and says we owe way too much money on it.

I have to say that finally finding a lawyer is a big relief. We are on our way and know this won't be an easy process for us. We will know a lot more once the complete income analysis is done. She did mention since we are over median income, the judge or trustee will look everything over with a fine tooth comb. Either way we file, there is going to be a solution to our financial crisis.

[tobee43]

really your unemployment insurance???

it was interesting, we filed in florida, and each county treated unemployment insurance payments differently. lucky for us, our county unemployment insurance payments were protected under the social security act. i don't understand how they can't be really, and especially, since they are only temporary payments. i mean how does one count in temporary income, what then you go back to court and redo it? i'm not exactly certain what or why some jurisdictions treat these payments as "income" since as we know social security and police, fireman and teacher pensions are all exempt as well. (that was us so we virtually had no income at all after the "exempt" incomes where added together).

how about waiting until AFTER you get your umemployment insurance payments. i also understand it varies from state to state, the state we were collecting from pay out high amounts of weekly benefits, however, in that state we paid in where we found in here in florida only the employer pays in, so the amounts of benefits were substantially lower, i don't know about ohio.

best of luck to you whether it's a 7 or a 13. many successful 13 stories on this forum!

[DaisysMom]

Woot!!! I know that has to be a big relief. Good luck and I hope things go smoothly for you!!

DM

[Tater]

really your unemployment insurance???

it was interesting, we filed in florida, and each county treated unemployment insurance payments differently. lucky for us, our county unemployment insurance payments were protected under the social security act. i don't understand how they can't be really, and especially, since they are only temporary payments. i mean how does one count in temporary income, what then you go back to court and redo it? i'm not exactly certain what or why some jurisdictions treat these payments as "income" since as we know social security and police, fireman and teacher pensions are all exempt as well. (that was us so we virtually had no income at all after the "exempt" incomes where added together).

how about waiting until AFTER you get your umemployment insurance payments. i also understand it varies from state to state, the state we were collecting from pay out high amounts of weekly benefits, however, in that state we paid in where we found in here in florida only the employer pays in, so the amounts of benefits were substantially lower, i don't know about ohio.

best of luck to you whether it's a 7 or a 13. many successful 13 stories on this forum!

Tobee,

It was one suggestion at the time of the consult. My unemployment runs out in August which is a month sooner than I realized. I'm glad I double checked on it! I was a little shocked at first but she wanted to make sure we could make it without the income if need be. I guess she wanted to cover all the angles. I wish they didn't count it as income either but they do. Like you said, it's only temporary income and not a lot! Without out it though, we would be below median with hubby's income only. I get where she is coming from as hubby has a little overtime every once in awhile. He works for a cable company so it's unavoidable at times. We could wait till my unemployment is completely finished which would leave us filing around November or December. It's that trick six month look back! We'll see how the income analysis goes which should be done in a few days.

[tobee43]

i understand. with us, we left our home of over 30 years and went underground and then waited 2 years before we filed. although we still had unemployment payments coming in, under those circumstances we were fine.

you only have until aug.??? that's less then 12 weeks away so why would wait until nov or dec??? i understand about the 6 month look back, but it doesn't matter much if the present shows the decrease in income. shoot happens all the time when someone losses their job. a look back is just that, however, remember they also look at the means test of today and without that unemployment insurance coming in it would set you below the median, correct?

figure this, you submit just as an example 6 months of bank statements 4 show that you had deposited the unemployment checks and then the last 2 show they aren't there ...why because the benefits stopped. so your means test would reflex that stoppage of income while you may still have had it in previous months.

i know this, and i have NO clue how the firm we used did it, but they added in our credit card payments into our means test while we hadn't paid them in months. so the trustee asked about that ...of course! and the firm says well you have to count it because they suppose to pay it! it left our means test at almost -3000.00 monthly. go figure. i have no clue how they did that?

i'm also just thinking about your expenses to cover the unemployment benefit??? anyway to up food, or maintenance etc.?

[Tater]

Well, our area uses the IRS guidelines for expenses on the means test. It went up a little at the beginning of May which helps a little bit. You brought up some good points that I didn't think of. We can't use credit card payments on the means test. Wouldn't that be nice? lol I'm a little confused though. Wouldn't we have to wait a few months after my unemployment ends to file? That would be considered in the six month look back, right? So, if I am able to to go through August with unemployment, we couldn't file in September because that would still bring us over median with the look back period? I've played around with it a little online the last couple of days just to get my own general idea. The way I understand (and this could be way off) is that the means test of today would include the average income over the last six months? Is that right?

[tobee43]

yes, i know there were some changes made on the way the means tests is viewed...6 month totals and 1 year totals with min and max. i'm just wondering if two of those months with out your unemployment would help the average to get down? also, remember just because you are over the median does Not mean you don't qualify for a 7. many people over the median are still approved ...just like cases as yours were there is going to be a drop in income going forward. it's simply not that cut and dry all the time. if you have a great atty and a trustee that will work with you, it can still work.

[TheBajan]

Tater,
I'm so happy for you! I know what a relief it was to us when we finally found the right attorney! You're on your way.... it's great when some of the uncertainty begins to diminish.

The Bajan

[Pandora]

hang on a sec... there are more than a few questions I'd be asking if in your shoes. Giving up your unemployment seems a bit harsh - as does charging you to do an "income analysis". I've never heard of that, ever. What is there to analyze exactly other than income to debt ratio, which is a normal thing when filing either Chapter, not "in addition to."

Another area: You can be over median and still file Ch. 7. It's very annoying to still continue seeing lawyers state "over median, automatic Ch. 13." Thats not the case; you can be over median and still file Ch. 7; again debt to income ratio comes into play. On the flip side - you can be under median and STILL end up in a Ch. 13 depending on what your Schedules show (like +DMI). Remember means test is only part of the process.

If you should end up looking at a Ch. 13, you need to make sure you understand the Lanning decision; as income can be forward looking vs. "mechanical" (i.e., 6 month look back).

[LadyInTheRed]

Tater, congratulations. It sounds like you found a good attorney. I'm sure she'll figure out the best timing for your filing when she does that income analysis.

[Tater]

I decided to drop the money order off at the lawyer's office instead since I needed to make a trip to Sam's Club today. I just received a call from the paralegal at the law firm who did our income analysis, we qualify now for a Chapter 7!!!!! What a relief!!! I don't have to give up my unemployment early either :-) The income analysis is considered part of the retainer fee. The regular retainer fee is $880 so now we just have to pay the remainder of that. Next step, complete all these schedules and gather the other essential paperwork! We are on our way!!!!!!!!!!!!!!!!!

[ValleYum]

Yay!! I know you were happy to hear that.

[tobee43]

great tater!!!

but i do have to mention i thought it, but pandora pointed it out...yikes you shouldn't have been charged $200 for that...but ok. and as long as you are happy, just watch the bill!!!

so glad it worked out for you. keep posting and let us know how it's going.

[LadyInTheRed]

but i do have to mention i thought it, but pandora pointed it out...yikes you shouldn't have been charged $200 for that...but ok. and as long as you are happy, just watch the bill!!!

With respect to you and Pandora, I disagree. Tater got assurances that she qualifies for a Chap 7 before handing over the entire retainer. If she didn't qualify, she would have had an idea what her Chap 13 payment would be like and had the option to decide not to file and lose only $200 instead of a full $1,000 retainer. She already got a free nearly 2 hour consultation. Now she'll pay the additional $800 after receiving the attorney's educated opinion that she qualifies for a 7. Why should the attorney spend time doing the analysis for free? As long as the attorney is up front about what is included in the $200 and credits it to the fee to do the BK, I don't think there is any problem charging to do any work beyond a consultation.

In fact, if a BK attorney wants to charge for a consultation (some do), that is his/her perogative. Some attorneys have built a strong enough reputation and have so much work from existing clients and referrals that they don't have the time to give free consultations to people who may or may not hire them. Free consultations are a way to get business, not something most attorneys do out of the goodness of the heart.

[tobee43]

With respect to you and Pandora, I disagree. Tater got assurances that she qualifies for a Chap 7 before handing over the entire retainer. If she didn't qualify, she would have had an idea what her Chap 13 payment would be like and had the option to decide not to file and lose only $200. She already got a free nearly 2 hour consultation. Now she'll pay the additional $800 after receiving the attorney's educated opinion that she qualifies for a 7. Why should the attorney spend time doing the analysis for free? As long as the attorney is up front about what is included in the $200 and credits it to the fee to do the BK, I don't think there is any problem charging to do any work beyond a consultation.

In fact, if a BK attorney wants to charge for a consultation (some do), that is his/her perogative. Some attorneys have built a strong enough reputation and have so much work from existing clients and referrals that they don't have the time to give free consultations to people who may or may not hire them. Free consultations are a way to get business, not something most attorneys do out of the goodness of the heart.

i didn't take it as she/he got any reassurances at all, and although not speaking for pandora, i do believe we were both of the same thought as per the posting. first she/he needed to pay the $200 for the "income analysis". this is absolutely NOT the norm, but an added and extra cost to the poor BK person.

of course it is an atty's right to charge for a consultation, however, most excellent atty, will give a FREE one. you're correct some attys do, in fact build strong reputations, however, for good as well as poor reasons. and, of course usually NOT out of the goodness of their hearts, although, there are a few left in this world, perhaps not your world, but there are some out there!

hidden and added costs are absolutely a terrible sign for anyone hiring an atty!!!