Took the First Step Today

We met with our attorney today around noon for the initial consultation. This guy was a bit odd but after sitting there for a bit I felt fine with him. He says our case is about as straight forward as they come. Ch.7, no assets, expenses are just about double our current income, bada bing, let's get rollin'.

He looked to be in his thirties. Wore a department store suit. Office was a bit seedy but I figured hey, this isn't "The Firm", we're dealing with bankruptcies. The odd part about him was that he rattled off info at about a mile a minute and his eyes were closed about 90% of the time, LOL. That's when I realized how thankful I am to have found this forum. I already had knowledge about everything he was saying and my wife read the "Tactical Bankruptcy Manual" start to finish so it was all good. He was cordial but didn't waste any time on small talk. He was all about business but it was Saturday afternoon and I'm sure he was geared up to get out of there.

He stopped and listened when we asked questions. He answered the questions completely and was a nice enough guy. I'll get the $100 retainer sent off on Monday so I can start answering the phone when it rings just to tell these creditors they're SOL. I told my wife that I get to answer the phone, LOL. Ok, maybe I'll let her take one call.

So now the only thing I'm left with really is the fees. Total cost should be right around $1200-$1500. Now, as i understand it they can put this into a payment plan but I have to have it paid off before everything is sent to the courts. Hmmm, interesting. I can just get by paying our current bills on my current salary. Now I get to figure out how to make attorney payments quickly so we can get going with the BK. I imagine for most people the payments are made with the money that was going to creditors. I haven't been paying any creditors other than my car payment because of lack of funds. *scratching head* I'll figure something out.

At least we'll have an attorney retained and the credit calls will stop. :yes2:

Good luck, man. The more lawyer(s) I talk to and the more research I do, the more I see that EVERYONE in BK GOES CRAZY with stress but that, really, the odds of everything working out once you make the decision is something like 99.9%. Those are good odds.

Income tax refund money?? eFile with direct deposit. You'll get the funds quick. About 3 weeks max.

Your guy sounds kinda like the first one we went to. Seedy office. K-Mart clothes. If you had your eyes closed and listened only, he sounds like Porky Pig when he talks. That guy likes simple, easy, straight forward. And, he's no risk taker. The whole time he was going thru our expenses, he kept lopping off dollars here and there. "The Court won't allow this. The Court isn't used to seeing this amount." etc, etc. He categorically wanted to throw us into a Ch 13 plan and he worked the numbers to get us there. Didn't even do a Means Test or he woulda seen we are below the Median.

Congrats on finding an attny. Our journey thru Consults hasn't been so easy.

I've read that Sinking, I feel for ya, seriously. That would suck. I'm sure there will be light at the end of your tunnel sooner or later.

Our attorney started explaining the ch. 13 to us first and I'm thinking oh great, here we go with this garbage but as soon as he finished his 13 speel he says, "However I would definately put you two into a ch. 7. It's pretty obvious that's where you need to be."

You're darn right that's where we need to be. LOL

Income tax refund money?? eFile with direct deposit. You'll get the funds quick. About 3 weeks max.

Your guy sounds kinda like the first one we went to. Seedy office. K-Mart clothes. If you had your eyes closed and listened only, he sounds like Porky Pig when he talks. That guy likes simple, easy, straight forward. And, he's no risk taker. The whole time he was going thru our expenses, he kept lopping off dollars here and there. "The Court won't allow this. The Court isn't used to seeing this amount." etc, etc. He categorically wanted to throw us into a Ch 13 plan and he worked the numbers to get us there. Didn't even do a Means Test or he woulda seen we are below the Median.

Congrats on finding an attny. Our journey thru Consults hasn't been so easy.


You sure you're not in NJ? This sounds just like the guy we talked to... he even went in to my pay stub and added in the money tha tmy company pays for my medical insurance into MY gross wages! Even though it doesn't come up as income on a W2!... then when it STILL was below the median... says, "no way you're getting a chapter 7, it'll be a chapter 13 with a 500-750/month payment. My fees are $2500, how would you like to pay the $1000 retainer?"

I'd be looking for a new attorney.

The first attorney I contacted for our 13 was a real winner...

He said "how much is your house payment? OK, well - don't pay them, and just give that money to me, my fee is $3000 and I need that before you file"

So glad I didn't even get to the in office consult with him.

went with the 2nd choice...he tried to put me into a 13 but I threw a fit & made him stop adding my boyfriend's income on to mine....as fate would have it...BF was out of work on/off during this whole bk procedure & I did not have any income but my own to depend on...this board saved what was left of my mind...do all these attorney's take the same fashion class?

The way that first guy kept saying, "The Court! The Court!", I'd swear he was pimping for them.

He never did a Means Test, or he woulda saw we are under the Median. He just took Hubby's pay stubs, added up our Net, and started deducting from there. At the end, he gleefully announced we would be a Ch 13, with a payment of only $197/mo for 5 years. That's $11,820 total in payments. That's not even 10% of our total CC debt. Take out expenses and he has us in a Ch 13 plan to pay the Court their money and maybe, MAYBE, pay back 6% of our debt. And, at 8.5% administration fee here, plus an extra $1K coming out for the remainder of his fee, I'd bet that we aren't even paying back $10,000 toward the actual debt.

Excuse me, but I thought, under the new law, between $6000 and $10000, that would have to be equal to 25% of your debt??!! Am I missing something or was that attny terribly wrong??

He's pimping for the Court. Grease their palms and his filings go thru without a hitch.

Actually, if you're going into a 13, this isn't a bad idea. The arrearage would go into the plan, so this would be a way to get the fee & file sooner rather than later.

The first attorney I contacted for our 13 was a real winner...

He said "how much is your house payment? OK, well - don't pay them, and just give that money to me, my fee is $3000 and I need that before you file"

So glad I didn't even get to the in office consult with him.

I don't think there is a minimum % of debt that HAS to get repaid in a 13, unless you have non-exempt assets. THere may be some states with minimums though. I've read about quite a few cases that paid back priority debts (taxes, arrears on house, etc.) and 0% to unsecured.

I don't think there is a minimum % of debt that HAS to get repaid in a 13, unless you have non-exempt assets. THere may be some states with minimums though. I've read about quite a few cases that paid back priority debts (taxes, arrears on house, etc.) and 0% to unsecured.

im late in this thread and not sure if im getting it right but there is a 25% of unsecured, i think, credit owed for a chap 13 to be excepted right?

im thinking that if you cant pay 25% of it then you will be going chapter 7. these new rules are tough lol

I don't think there is a minimum % of debt that HAS to get repaid in a 13, unless you have non-exempt assets. THere may be some states with minimums though. I've read about quite a few cases that paid back priority debts (taxes, arrears on house, etc.) and 0% to unsecured.

That's what we were told today, Staci. The 25% is a function of the Means Test only. Sched's I and J are the real indicators. And there is no set % to debt repayment in Ch 13. It's totally based on disposable income when I and J are compared. If you can only pay back 5%, you only pay back 5%. Because the whole time you're paying, the attny and the Court make money. The Court is paid their fee, the attny get's the remainder of their fee, and then Priority and Secured debts get theirs. Unsecured is at the bottom of the list.

And a Trustee/Judge can look at anyone's J and think to themselves, "I can squeeze more out of this budget", and start lopping amounts off here and there. Their mindset, Trustee and/or Judge, is that their life does not have to conform, the debtor's does. And it doesn't matter to them if they cut you too low on food, or clothes, or gasoline, or eliminate what you spend on firewood to heat your home. It's not their problem. It's yours, the debtor's.

According to the pre-recorded message I had to sit through today in my 341 meeting - it is the trustee's job to make sure you succeed by making you put the proper amounts for your budget. It said that if you are a family of 1 - 500/month on food may be too much and if you are a family of 5 --- 200 isn't enough.
I'm an optomist by nature and I feel like they want us to succeed. I've been given a fair budget - and I think I can do ok...

if they squeeze you - you will fail, and I'm not sure that's the impression I've gotten YET

The first attorney I contacted for our 13 was a real winner...

He said "how much is your house payment? OK, well - don't pay them, and just give that money to me, my fee is $3000 and I need that before you file"

So glad I didn't even get to the in office consult with him.

nice lol. what an A**! hahaha what a great business model!

That's what we were told today, Staci. The 25% is a function of the Means Test only. Sched's I and J are the real indicators. And there is no set % to debt repayment in Ch 13. It's totally based on disposable income when I and J are compared. If you can only pay back 5%, you only pay back 5%. Because the whole time you're paying, the attny and the Court make money. The Court is paid their fee, the attny get's the remainder of their fee, and then Priority and Secured debts get theirs. Unsecured is at the bottom of the list.

And a Trustee/Judge can look at anyone's J and think to themselves, "I can squeeze more out of this budget", and start lopping amounts off here and there. Their mindset, Trustee and/or Judge, is that their life does not have to conform, the debtor's does. And it doesn't matter to them if they cut you too low on food, or clothes, or gasoline, or eliminate what you spend on firewood to heat your home. It's not their problem. It's yours, the debtor's.

well it will be good to figure this out. its all very complex as to how much you have to pay back.

as for lopping off amounts, they trustee has to object to the case and win the battle if he is wrong. its not just a matter of him slicing it down on a whim.

In going thru our expenses sheet, rent is at the top. And that's the first thing he hit on. He said our rent is too high. He already knew I'd been researching so he asked me what the "allowable" was. I said $969/mo for rent AND utilities. So he wanted to know why our rent was so high. Why had we selected this particular house. I told him about Mom living with us. No we can't consider her as a dependent. That we needed something with more room than the smaller houses. We were down to 2. This one and another one. We chose this one because the other one was a 2 story. All the bedrooms were upstairs and Mom could not climb the stairs. Stairs was not an issue for her in this house. He was satisfied with our explanation. But he also said, the Trustee could look at that and reduce it. Tell us we will have to find another place to live that is within the Living Standards amount/month.

I wrote down $1100 for food. That's what I spent last month and I have grocery receipts to back it up. I told him that. And I told him that lined up with my CC charges from months before. But the attny lopped our food expense yesterday. He said that would never fly in the court. So he changed it to $700. Which I completely don't understand at all. I've seen several of his cases where he filed $400/mo for 2 people. Wouldn't 5 people spend 2.5 times as much?? or $1000???

We went thru the 3 big shopping trips we could remember and knew we'd spent $750 on clothes last year for sure. Not counting tossing in socks, underwear, and such. Or picking up an item here and there. I had put down $100/mo for clothes. He doubled that to $200. He said no way do 5 people, especially with 3 teens, only spend $100/mo on clothes.

He questioned $200/mo for medicals. I explained how I got there. He was satisfied with that. Suggested that we might actually up that dollar amount.

He told us he would argue that our insurance rates are higher due to teens. That is understandable. All families go thru that 3-5 year, whatever period of time when their kids are driving and their rates are higher. That's justifyable. But he also wanted us to get a break down price as well. How much it actually cost to insure Hubby's and my car, without the kids vehicles as that may be what he might be forced into by the Trustee.

He also said cell phones are not a necessity. That one may get knocked off as an expense. I said for the "health, welfare, and safety of your dependents". Went thru the whole speil about kids breaking down, etc. He said we (talking about himself, hubby, and I we are all about the same age) broke down w/o cell phones and we survived. Just cause it's an allowed expense on the Means Test doesn't mean the Trustee will allow it on Sched J. Even tho he fussed about it, he did leave it on our sheet.

At the bottom of the sheet, he had a misc catch all section for expenses not itemized above. I wrote down $100/mo for gifts. We have 5 birtdays and 5 people each to buy for for Christmas just in our own family. Not counting Hubby's parents and no one else. He said that might get taken out all together. He said OK to school lunches, hair cuts, licenses. Suggested we move firewood expense into the household electric and heating category. Then he asked, "Do you really spend $100/mo on firewood?" We said yep. He said we needed to rephrase "Work and College lunches".

When he got to cigarettes, that's when he launched into the whole "You're the debtor. I'm not. Your lifestyle has to conform. Mine doesn't." litany. Even tho they all smoke. Judges and Trustees. They have a room inside the Court House where they open the window and stand in there and smoke. Inside a "smoke free" building. He said the Judges and the Trustee will go thru the filer's expenses with a fine toothed comb. Looking for anything to toss or trim. To get money for a Ch 13 payment plan.

He also said that first attny, who wanted us to pay $197/mo,........... If we had gone in with him, the Court probably woulda went thru cutting expenses here and there until we were paying $400-$500/month. $197/mo is not worth the time and expense associated with a Ch 13 plan.

It was depressing. Like we weren't beat down enough. Now the Court is gonna beat us up some more??