HELP again -- finally talking to lawyers and getting VERY different answers!

[Brokerthanbroke]

Husband and I are deeply in debt -- over $200K in unsecured debt.

Partly because of 2 failed businesses (1 ceased operations and another we just threw the money away....very long story) and 2 fledging businesses. Also layoff and medical issues. I lost my job 2 years ago. Husbands PT business wasn't doing as well as we'd like and he was getting too old for it. It had been PT so that he could be home with the kids afterschool. Long story short -- Suprise kid #3 came along and I lost my well-paying job right after maternity leave. We never offically closed the business, simply ceased operations. We acquired another company that was doing well but the owner retired. Now we think those #'s may have been fudged. But that business is doing better. After a year of job searching and getting nothing in my field, I decided to go for it and launch a business. Each month, we get closer to our goal of not losing money. Last month we took money out of 401K to make ends meet. We are 90 days out of any large balance transfer or cash advance.

Husband got hurt this summer and was unable to participate fully in business. Had to hire more staff to help...severely cut into profits. I even did more of his job...until I was hurt (not from work related injuries...just freak accidents!).

Basically, while I was working, we had debt ... but managed it. Goal was to sell house and use proceeds to pay off debt. Got layed off, and decided to keep really small house with really small mortgage. Add new debt over the next two years funding businesses and just surviving. No big trips, no major purchases (couple of things...but no big screen TV in our living room or boat in the garage!)

Spoke with lawyer #1 this morning. No problem with Chapter 7. We don't make enough to even come close to the means test. Didn't see a problem with the amt of debt we had. Biz #1 is barely making it. Biz#2 hasn't turned a profit...yet. We are sooooo close! Doesn't see us having to close either business.

Lawyer #2 immediately said we have to go 13 because of the amount of debt incurred in the last 2 years. Trustees would be all over it. Businesses would be forced to close in Chapter 7....possibly in 13.

So I've tried to research more the the 707B that lawyer #2 mentioned and I'm only finding vague legal-ease...nothing in plain English for us simpled-minded folk.

Lawyer #1 said it is up to the trustee to prove fraud -- difficult to do. Laywer #2 said it's easy for them to call fraud and hard to prove it wasn't!

Totally different viewpoints. Any feedback would be very helpful!

Truth: All charges were made with full intent to repay. Oh, we are getting sued by one creditor -- line of credit -- yippee! So that is moving up our filing plans a bit more.

Also, have 2 appts with 2 new lawyers in next 2 days. Will see what they say as well.

[FilingOnMyOwn]

Yeah, I'd talk to those other 2 lawyers and possibly more. I'm not sure how the fraud thing would come into play, its not like you're hiding anything. It seems to me you'd be just fine in a chap 7.

[gacreditguy]

totally agree with filingonmyown on this.. appears you would be ok in a ch7..

[JeepMom]

See what the next two say and go from there.

[SinkingFast]

A few people here with businesses have filed Ch 7 personal BK. One was investigated by the US Trustee.

That may happen in your case, as the one attny said. BUT, if you can document everything, you shouldn't have a thing to worry about.

Sometimes, lawyers wanna take only the easy cases, or the easy way out. Ch 13 is the easy way out, and is the most profitable for the attnys.

Definitely, as FOMO suggested, talk to more attnys. May be you haven't met your attny yet. May be that the first one you spoke with is the person for you.

[Brokerthanbroke]

Thanks for the feeback. That suggestion of investigation for fraud really worried me. He said he has 4 clients in similar situations with so much debt occurring in the past year that they were pushed to Chapter 13.

There was no way I was going to go with #2 anyway. He made me feel like slime for even being there. I met with him in his big a** office and he sat behind his enormous desk and acted like the lord of his kingdom. Ugh.

[SinkingFast]

Thanks for the feeback. That suggestion of investigation for fraud really worried me. He said he has 4 clients in similar situations with so much debt occurring in the past year that they were pushed to Chapter 13.

There was no way I was going to go with #2 anyway. He made me feel like slime for even being there. I met with him in his big a** office and he sat behind his enormous desk and acted like the lord of his kingdom. Ugh.

We met with one attny who's a fairly attractive man. Maybe early to mid 30's in age. We met with him in his conference room,........ Where the table has a VERY shiny, reflective surface. AND he sat across the table from us, where we had a rather large, ornate mirror on the wall BEHIND us.

There were times during the Consult where I thought he was pondering our situation. He'd be looking intently down at the table or over our shoulders as if staring off into space whilst thinking to himself.

We later learned from other attnys and paralegals that this guy has a thing for looking at himself. Turns out, he was really sneaking peeks at himself the whole time during our Consult!!

[JeepMom]

SF you're post makes me want start singing "if you think I'm sexy, come on over and let me know...."

[alh]

OK, so is lawyer 2 saying that since they will suspect fraud you have to file a 13. That would be crazy. If they suspect fraud they prosecute you, not put you into a 13. So far lawyer 1 makes much more sense.