question re: filing/hiring lawyer

[sodone]

I have a basic question, does the trustee care/look at when you "hire" an atty/pay the retainer from when you actually file?

If anyone has an opinion on our strategy, please advise if we are managing this appropriately...

Due to us trying to get CH 7, it would be wise that we wait until November to file(doing the online "math" via the bankruptcy means test calculator website I found on this message board), for if we file and it includes my May income, we are over the 110/mo. and get thrown into Ch 13. If we wait another month, we are only positive 20 dollars and then can get ch 7.

We consulted with an atty in March this year(when we were considering 13, but then realized that once the baby was born we couldn't reaffirm our home and our one vehicle due to daycare/baby costs, and we have an APR on the home and would be screwed come 2008 when the interest rate would skyrocket - so the home stopped getting paid for and the car, the car just get repo'd and the house is going into foreclosure this month - figured we can get the deficiency for the car discharged in the bankruptcy. The house has no equity - the same homes are selling for 30k less on MLS, but we didn't want a trustee holding up the foreclosure process to see if they can sell the asset - figured if the house is "gone" and all that has happened its easier to get the bk done), can we pay the atty to get our paperwork "started" and have a say so when we think its best to file?

I know trustees looks at our behaviour re: charging things & expenses from when you hire an atty right? But do they care if you hire an atty and don't file for a few mos?
I don't want to look like we are abusing the system - any guidance anyone can give us here? I can't stop obsessing about this, and my DH will be calling the atty on MOnday - I feel like we keep putting him off, but I figured we should get some kind of clue on what is best for us - we haven't spoken to the atty re: our new situation in detail(not wanting to have Ch 13 happen). I am scared of being told "you have to file now" by the atty if he wants our money. I don't know what kind of advice bk atty's provide - its like telling a doctor what you think is wrong with you - don't want to tell them how to do their job, but then again if I feel that there are pro sers here who can figure this out for themselves, I want to be well armed going into this with paying an atty 3k for their services, I want it to be what we need.

Ugh, I am babbling. sorry.
Thanks.

[SinkingFast]

We hired,.......... As in paid in full,.......... Our attny in March and did not file until September. Unlike you, we were Ch 7 when we hired our attny and that did not change.

You should chat with the attny. Say you understand if you wait just a bit, you're income will move below the Median and you can file Ch 7. See what he/she says. How the attny reacts.

If the attny pushes you to go ahead and file Ch 13 I think that would tell you something. That attny is not looking to protect your best interests. It's time to look for another attny.

[sodone]

thanks Sinking.

My concern is that my husban'ds income alone is over the median, I am playing with the expenses, etc. to see if that can put us in being able to file 7. Income alone we are over the median, if that makes sense?

Right now, just not figuring out anything(looking at dh's paystubs alone) we are ch 13. Its not until we put in what we owe in IRS payments, taxes, child support payments, reaffirming our only car, and our PMSI(have to pay those -its all our home furnishings sad to say, cannot afford a figure to settle out since its almost 9k we owe on those PMSI's) court ordered payments for daycare for my Stepson that pushes us into a ch 7 scenario.

We are walking a very fine line to get ch 7, and want to increase our chances as much as possible, I know that is the atty's job to see where we fall. Our atty seems up and up, that is good to know that you hired yours and didn't file until later - I was concerned for some reason that the trustees expect you to hire an atty and didn't file immediately. didn't know that a gap of time is okay. I guess too it makes sense cause it takes awhile to organize all this mess LOL.

[keepmine]

Retaining a lawyer and filing at a later date is not the least bit unusual. It takes many people a few months to gather up the full legal fees.
Me, I paid a 50% retainer in Aug of 05 and didn't file until early Oct. A week before the bk laws changed.

[SinkingFast]

A big chunk of the delay in our filing had to do with moving.

We were renting from the Landlord from Hell. Our attny advised we find a place to go, move, establish our new living costs, and then include the Landlord and the remainder of the Lease when we filed.

We hired our attny the end of March. Looked for a new place to rent. Found our current Condo in April but it did not come available until the end of May. It took 3 months to establish our utilities costs for the new place. Then the attny had to rework our Schedule J accordingly. So we filed in September.

I did wanna add,............ We didn't use any form of Credit the whole time. So bear that in mind as well.

[lrprn]

We hired our lawyer in February and did not file until June. It's a good thing to plan your filing rather than rush things through when it's not an emergency. Your lawyer can't file your bankruptcy (7 or 13) until you sign the papers. He/she can recommend the best timing to file, but no one can force you to file if you don't want to file.

I did wanna add,............ We didn't use any form of Credit the whole time. So bear that in mind as well.

SF makes an excellent point. You might get into trouble making bk lawyer visits months before filing is if after you file (1) you have a creditor who files an objection to your case, (2) you made charges or took out a loan after you started meeting with bk lawyers but before you filed, (3) the creditor can prove you made bk lawyer visits before you started charging/loaning and so uses that to prove you had no intention of paying the creditor back and charges that you filed in bad faith. However, the chances of these three circumstances all happening are very, very small. If you make no charges and take out no loans between when you retain your lawyer and filing, then this is not a worry at all.

If your lawyer tries to push you into filing faster and you know it's not in your best interests, ask him/her directly why you must file now. If it's not a good reason, I would walk away and find another lawyer.

[sodone]

Thanks so much for your responses. My DH and I haven't touched a CC since Feb 07 for one charge(my mistake, thought it was the debit visa buying things for the baby). Other than that, we haven't touched a CC since Nov/Dec 06 for medical expenses for the pregnancy(third party billing, had to pay up front). We didn't consult with an atty till March, so we look pretty up and up - thanks to this forum, we moved and have established new living expenses for a few months now.

I feel much better now, I just hope that Dh's car lender doesn't come after us with a lawsuit for the deficiency of his car(got repo'd this week) before we file. I just hope the home foreclosure gets underway, it should be done before we file as well.

Our case looks legit I hope, so many changes so quickly, its amazing how your life can change in a year. But I will take having our baby anyday(medical costs around 60k for my treatment - all paid upfront and not covered by insurance) over having a house and perfect credit.

[lrprn]

Our case looks legit I hope, so many changes so quickly, its amazing how your life can change in a year. But I will take having our baby anyday over having a house and perfect credit.

Good for you, sodone! This is one of the most important lessons we learn from bankruptcy - you are not your credit score, and you are not what you own.

Your family is what really matters - taking care of them and doing what you have to do to have a satisfying life together for many decades to come....a life that isn't controlled by your debts any more. Congratulations and welcome to a brighter, sunnier future!

[CPO]

I hired my attorney early February this year, paid in full 1st week in April and won't file until next week. No charge activity since November 2006. No real financial activity except basic living expenses, receipt of military pension, veterans disability and unemployment insurance.

I don't like to rock the boat.

Bankruptcy planning is not unethical nor illegal. Fraud is. Running up your credit obligations before filing is fraud. As Irprn says, if those three factors can be linked, then the Trustee is likely to balk at your petition.

Hiring an attorney and then engaging in a flurry of cc charges soon after that you know you can't afford to pay is another fraud. You'll get caught.

It's not unusual to schedule specific events to meet your expectations, though. If you need to wait awhile because of recent charges, perhaps a calculated reduction in income will take a few months, a recent large payment to a creditor, etc. its typical and normal to wait until an optimum time frame arrives.

Most attorneys don't act on your case until fully paid up. That will be a delay right there. Could be a long spead between your first consult and when you pay your attorney off.

Don't forget many Trustees are BK attorneys. They fully understand the complexities of the process on both sides of the issue.

As far as telling the attorney how to do his job: you had better make damn sure you know exactly what your attorney is doing on your case and how it will affect you. Get the most concise and up-to-date education on this process. It's not hard. Much of the information you can get right here.

Buy the NOLO book. Read it, then read it again. Study the website of your local federal BK court that has jurisdiction over your case. Most if not all have significant local rules that must be followed. Some have specific documents and forms to be completed.

Attend a creditors meeting or two. Surf the web. There are pages and pages of lawyers blogs, debt collection sites, forums, consumer action sites and the like. Study them.

Make copies from the NOLO book of the applicable forms. Complete them. Correct them, over and over again.

You will learn how this process works and many if not all of the pitfalls of BK filings.

Remember, your attorney knows the societies that play this game. He knows the trustees, judges, court clerks and has seen many of the events that take place behind the curtains that you and I never see.

That's what your paying him for. His paralegal will do the forms, on the computer using any of the software programs they all purchase to do these things. You or I could do that.

It's his experience in court that we are paying for, and the nuances of playing the game that we count on as his experience.

And you know what needs to get done, for your benefit. Don't leave that up to your attorney. Your the customer, and the attorney works for you. Don't forget that. You need to monitor and be actively engaged in the process.

The more you know and understand, the better the outcome will be for you. Educate yourself.

Make it so.

Regards,

CPO

[keepmine]

Well, CPO pretty much knocked the ball right out of the park.
I'd just add one thing. When it comes time to sign the forms-don't get in a hurry.
Sit there as long as it takes and go over the schedules line by line.
For sure, get copies of your credit report from all 3 CRA's and make sure you got all creditors-right down to any 3rd party debt collectors that may be working chargedoff accounts.