?? for Help! or others.. CH7 may go to CH13...

[welovedis]

Short version:
Filed 11/18, 341 on 12/11 was continued to 1/6 because BKT wanted some further CC statements and the statement showing how much in our son's savings account was missing from his file. Also UST has been involved asking about deposits made to acct that are not attributable to paychecks. These are checks that I got for my son's school fundraiser, a couple of reiumbursement checks from our insurance company (we bought something, they reimbursed us for 80%), things like that. Luckily we have documentation for everything to show that this is not extra income.

Fast forward: Talked to our attorney yesterday, he said he spoke with UST and they are thinking of petitioning to have this converted to a CH13 because they think we can pay back "something". He has asked us if we want to set up a preemptive type of meeting to sit down with the UST to go over our Schedule J. He said in the meantime I need to pick apart my Schedule J and see if there are, indeed, areas that can be trimmed, OR if I can back up the expenses and show that if some areas are high, how those are justified.

Our case is all unsecured CC debt ($83K), we are keeping our home (very affordable pymts and worth keeping), and reaffirmed our car loan (Toyota Camry, 3/4 paid for and worth keeping IMO). Our means test was -563 a month, but on our Schedule J we show a net income of 199.00.

If I post my Schedule J here can someone show me where we might be really above the standards, or are there standards for each category I can look up? I found the housing, food, clothing ones and each category is different for us. For housing we are above the average (by over $300) d/t high home maintenance costs--we have a large inground pool so chemicals and pool stuff adds up. Then we have septic tank maintenance, and other maintenance because we have 1.5 acres to upkeep. We live in Monroe County, NY.

Our clothing amt is $40/mth (family of 3), groceries are $550 a month.

I'm just not sure why the UST is thinking we can meet a payment plan for CH13. DH's employer eliminated his OT in Sept, that is why we ended up filing, because we were (stupidly) relying on that lifeline to keep us afloat.

Any help or suggestions are appreciated!

[welovedis]

Here's our Schedule J

1) Home mortgage (inc taxes & property insurance): $1251.18
2) Utilities: Elec/Gas $275.00; Water $20.00; Telephone (includes DSL and telephone) $84.61; Other (Cable, Trash, 2 cell phones) $112.00
3) Home Maintenance: $200.00
4) Food: $550.00
5) Clothing: $40.00
6) Laundry & dry cleaning: $10.00
7) Medical/dental expenses: $45.00
8) Transportation (not inc car pymt): $425.00
9) Recreation: $75.00
10) Charitable: $200.00
11) Insurance: Life $103.00; Auto $90.00
13) Installment pymts (car) $297.79
17) Other: Misc personal care $100.00; School expenses for son $60.00; Pet expenses $50.00; Wife College expenses $239.25

Grand total is 4227.83, average monthly income is 4426.83

[welovedis]

http://www.irs.gov/businesses/small/article/0,,id=104627,00.html

Here's where I found some national standards for us--based on 3 person HH:
Food: $626
Apparel & services: $209
Personal care products/services: $58
Miscellaneous: $197.00 (so what does this cover?)

http://www.irs.gov/businesses/small/article/0,,id=104623,00.html

Ownership cost (1 car w/loan) $489.00
Operating costs (2 cars) $560.00

http://www.irs.gov/businesses/small/article/0,,id=104830,00.html

Local standards/housing & utilities: $1586.00

http://www.irs.gov/businesses/small/article/0,,id=173385,00.html

Out of pocket health care : $57 X 3 = $171.00

[Help!]

If the UST is going to go through your schedule J, you might as well also. DEFINITELY add in that higher food cost - you are entitled to $626. This puts you at +123 on schedule J. Clothing sounds low. We had $200/mo. for a family of 5. In addition to those standards, you are allowed any reasonable expense necessary for you and your family to live. Think of every possible expense you and your husband have. You can exceed the standards if you have receipts or an explanation. After you've done this, by all means get your attorney talking to the attorney for the UST, but be aware that these attorneys are the best of the best.

If schedule J looks like your net income is only going to be about $100/month, there's only going to be about $6K repaid to creditors over 5 years. If your attorney is unable to convince the UST that you belong in a Ch. 7, consider liquidating assets you previously covered with exemptions. For example, if a Ch. 13 plan pays out only $6K but you can come up with $12K you may be able to convince the UST that creditors would benefit more from a Ch. 7 with liquidation than a Ch. 13. The case trustee and UST can not do anything that would be detrimental to creditors, so if you can make your Ch. 7 a better deal for creditors than a lousy $100/month Ch. 13 your chances are good.

The best advice I can give you is to work WITH the UST and not against. Don't give up!

[welovedis]

Thanks Help!

Our attorney said he has a "very good working relationship with the UST attorney" (his exact words) and that he felt if we approached them BEFORE they actual file presumed abuse and show them how the monies have been spent it would benefit us in the long run. He felt strongly that a CH 7 was the most appropriate for us considering our circumstances.

So I can adjust my schedule J and add in costs? Our food budget is closer to $600-625 because I have tons of food allergies and need to buy things at the natural food store or in the organic section (allergic to eggs, nuts, bananas, pineapple which are in lots of regular foods). Also our DS is autistic and there are additional costs that we put under personal care that extend towards his needs.

We really don't have assets to liquidate at all. We have one car that we paid cash for and it is worth less than $3K book value plus the one that we reaffirmed. Our house contents is nothing fancy, unless we get rid of 1 computer but that was exempted under the BK paperwork. Our debt was incurred not by purchasing "things" but by improving our home and also living off CCs for a bit when I wasn't working, plus 2 short trips we took before we knew how bad our situation was getting.

I was talking with DH and he agreed that we should work to try to stick with the CH 7. Depending on how the UST responds to our meeting, we'll recheck after that. If we HAD to, we could really cut corners for the next year pay $200 a month, then I graduate in Dec 09 w/ my RN degree so my income will drastically increase and we'll be ok.

Guess I need to start reading up on 13s just in case. I have no idea if they get your income tax return, if the amt changes if your income changes or what.

Thanks again!

[Help!]

Excellent working relationship or not, you are likely in for a battle.

The UST is picking apart your petition and you should too, so don't hesitate to add in real numbers - just be prepared to document them.

The UST will want documentation supporting DS's diagnosis. If the statement of presumed abuse is filed you'll have only a 30 day window to get everything together. I don't have much faith in BK attorneys (sorry), so if I were you I'd start gathering documentation now.

$3K is substantial, so don't assume the car is worthless. If you set aside the money that would have normally gone toward debt payments would that give you more to offer?

[CatsInTrouble]

.. then I graduate in Dec 09 w/ my RN degree so my income will drastically increase and we'll be ok.

Five years of repeating almost this exact mantra while I was in school is what got me into debt. Don't count your chickens, etc, etc. Hospitals are starting to hurt.


edited to add: I'm not trying to be mean, but I swear to god I said that same sentence a million times and reading it made my heart race.

[welovedis]

Five years of repeating almost this exact mantra while I was in school is what got me into debt. Don't count your chickens, etc, etc. Hospitals are starting to hurt.


edited to add: I'm not trying to be mean, but I swear to god I said that same sentence a million times and reading it made my heart race.

Cats I'm sorry that is what added to your troubles-yikes!

I have 2 job offers pending and have FT summer employment lined up already working with a nurse preceptor on a hospice floor. I work per diem as a CNA at a hospice now and they have also offered me a FT job. Here in this part of NY the nursing jobs are plentiful, they have some nice signing bonuses and lots of vacation time from the start. I know that is no guarantee, but the likelihood of getting a good position is pretty high at this point. Also--I'm in a 2 year program and the remainder is paid by grants and scholarships-thankfully!

However, we are hoping that we will be able to stick with the original CH7 plan and not have to worry about paying something back. We are really down to a small amt left over every month and we are trying to save that for emergencies. The thinking that we'd be ok until I graduate is only if we end up having to convert to a 13 and have some sort of repayment plan.

Help!--the 3K is a car we bought after we sold a car that had a lot of equity. We took the equity and used it for mold remediation (for the house) and bought the used car. Actually the book value is $1700-2500. Plus we live in a rural area so we need 2 cars to get to work/school/transport DS to his therapies, etc... The attorney did not seem to think there was a problem with the 2 cars.

The money that we were spending on paying the minimums on the CCs is what DH's OT paid for and now that is gone. We do have supporting emails from his dept supervisor and the other dept he worked for showing when the OT was cut, and then completely taken away from the employees. Hopefully that helps to better substantiate the difference in income.

I agree--our attorney seems nice, but I am super good about docs since I ran my own business for almost 9 years and I save EVERYTHING and am pretty organized about it too! I can produce receipts to back up our home maintenance costs, our transportation costs and also, of course, give them info on DS' diagnosis and current plan of therapies and IEP for school.

I do appreciate your advice because I know you've been down this road before me and can offer your unique perspective!