Ok guys..Need a little help from my bk friends

[sophie]

I posted my situation yesterday but here's another question. We're in a 7 with another court hearing next month. They want to dismiss or convert us. If we are converted what happens next? Do we have to start all over? Is it automatic? Is there another meeting? Also, what happens if you can't make payments? I will be going into the 13 with $$$$$ of debt already owed to my lawyer and come April 15, to the IRS. I guess after almost 8 months I feel as if they just want us to be bankrupt!

[HHM]

I don't know for sure, but I would suspect the following happens upon conversion.

1. A new trustee assigned to your case (the chapter 13 trustee)
2. You will have to file a Chapter 13 payment plan.
3. There will be another 341 meeting, with the chapter 13 trustee.

Don't worry about the money owed to your lawyer, if you end up in a 13, his fees are paid by your payments into the chapter 13 plan.

Incidentally, in the motion to convert, what is the trustee citing as the reasons.

[sophie]

Actually the papers say dismissal cause of abuse!!! I think they just want us in a 13 so the trustee can get some money. Here are some of the reasons: We didn't declare all monies we made (totally false). We spend too much on monthly expenses (we're within the law), I contribute to my 401k (no one told me I couldn't), etc. etc. Says we have $$$$ left over every month (like I'd ever file bk if I did)! Stuff like that. Didn't know about the lawyer fees going into the payment plan. That would be nice. If I do fight this and win, and I am able to file a 7, are we then liable for the lawyer's bills?

[HHM]

If I do fight this and win, and I am able to file a 7, are we then liable for the lawyer's bills?

Yes

[FoolAndHisMoney]

Actually the papers say dismissal cause of abuse!!! I think they just want us in a 13 so the trustee can get some money. Here are some of the reasons: We didn't declare all monies we made (totally false). We spend too much on monthly expenses (we're within the law), I contribute to my 401k (no one told me I couldn't), etc. etc. Says we have $$$$ left over every month (like I'd ever file bk if I did)! Stuff like that. Didn't know about the lawyer fees going into the payment plan. That would be nice. If I do fight this and win, and I am able to file a 7, are we then liable for the lawyer's bills?

Was the 401k contribution a substantial amount or just a small percentage? The US Trustee doesn't get money if they win. They just get "brownie points" for their annual report on all their accomplishments. Do you have receipts, canceled checks, etc. to backup your actual expenses? Even though you may spend the exact amount they allow you still need to prove you spend what you listed on the schedules. You will be liable for the legal bills win or lose. What do they have to prove you have more income then what was listed? If a creditor loses either an adversary or a motion 707b case then they would have to pay you for your legal fees. Unfortunately that's not the case here.

If they cannot prove their case and you strongly feel that they don't have one then fight this all the way!

[sophie]

40k is 10% so it's a good amount. I have every paper and have given them everything they wanted for 6 months now. The income situation is that our lawyer says we didn't pass the means test and the trustee says we did. It seems to be a matter of interpretation??? They also are saying we pay too much for food, and pet care a month. My husband is most upset 'cause they are saying we lied and therefore the judge has to grant the dismissal. And we didn't lie. So we will probably fight this especially because they are accusing us of something we didn't do. But say the judge doesn't see it that way and we lose. Does that mean automatic dismissal or at that point can we turn around and say we'll convert? Do we have that option?

[sophie]

BTW. What did you mean If a creditor loses either an adversary or a motion 707b case then they would have to pay you for your legal fees. But that's not the case here?

If we fight this and lose why wouldn't they have to pay?

[HHM]

BTW. What did you mean If a creditor loses either an adversary or a motion 707b case then they would have to pay you for your legal fees. But that's not the case here?

If we fight this and lose why wouldn't they have to pay?

Because it is the trustee who is bringing the action, not a creditor.

[SinkingFast]

I looked back to your earlier posts. Part of the reason may be you are over the Median. Trustees may be getting a nudge from above to push as many over the Median filers as possible into Ch 13. And, just a guess here, but your 401K contributions may be part of the hitch in your case too.

We met with our attny in March and Hubby became eligible to contribute to his 401K the first of April. We asked the attny about signing up for the 401K. Our attny asked how much we were planning to contribute. We told our attny that hubby's company matches dollar for dollar on the first 2%, so we'd planned on 2%-3%. Our attny said that would be fine. Just keep our contributions below 5%.

Several other posters here from various parts of the Country have also reported they were told 5% by their attnys as well. That may be some sort of unwritten rule the Courts are going by. A "Rule of Thumb" if you will.

So you possibly have a combination of things working against you, on paper at least. Could by why your case is getting the extra scrutiny.

[sophie]

Thanks sinkingfast. Our attorney never even mentioned the 401k. I still think we are going to fight this mainly because what the trustee has written is not the truth. Even if we have to do a 13, at least I would have gotten to tell the judge the truth.

Another thing is that it doesn't even suggest the possibility of doing a 13. Just says the trustee prays that the judge will dismiss our case. Do you know if at the time of the court hearing the judge could say I won't dismiss but I will rule that they have to do a 13?