Just back from 341 Meeting...didn't go so well

[albacore44]

Some of these trustees must really be smoking some good dope.
What's the point of doing a ch13 if you're going to lose your house AND car??
Might as well just quit working and file a chapter7.
Just remember, this is just a prelude to negotiation.
In the ranking of things i'd like my plan payments to go towards, I'd still rather spend money on the lawyer than the unsecured creditors. Adversary proceeding? Bring it on. My lawyer gets paid out of plan assets also, correct? Meaning the BK estate is paying for the lawyer ultimately (he says, hoping to hear someone say this is true).

the guy I consulted also said I should miss a couple of mortgage payments to throw those into the plan so there was less for the unsecured. I almost messed my pants, since I have never been late on the mortgage, and the thought of that floored me. I can understand the strategy now

[justbroke]

Some of these trustees must really be smoking some good dope. What's the point of doing a ch13 if you're going to lose your house AND car??

Some are smoking something, but the majority are operating within the Bankruptcy code and their charter from the U.S. Bankruptcy Court. There is nothing in the Bankruptcy Code that you can keep all your worldly possessions at all. A Chapter 13 presents an opportunity to keep those things, but, in reality, most people can't afford to keep all those things. It's the reality of it.

Might as well just quit working and file a chapter7.

That's why pre-Bankruptcy planning is essential. In some cases, it makes sense to wait it out to file Chapter 7. However, not every debtor is so easily satisfied by a Chapter 7 Liquidation.

In the ranking of things i'd like my plan payments to go towards, I'd still rather spend money on the lawyer than the unsecured creditors. Adversary proceeding? Bring it on. My lawyer gets paid out of plan assets also, correct? Meaning the BK estate is paying for the lawyer ultimately (he says, hoping to hear someone say this is true).

What lawyer told you that?

A lawyer's payments come out of your Plan. However, he generally has to apply for all his fees prior to or at confirmation. Adversary Proceedings can be very very costly (more than filing Bankruptcy itself). If your plan cannot afford to pay the lawyer for APs, then your plan won't be confirmed. It's a vicious circle!

Worse, is that they aren't just being "paid" in your Plan. They are being as a priority unsecured debt and are paid at the same priority as the Trustee. This just means the lawyer gets his money before everyone else. However, if you can't afford the plan, which does happen, then it can't be confirmed.

If it was as easy as just using your plan assets to pay a lawyer to fight everyone, every lawyer would be advocating this! It's just not that simple. In the end, it comes out of your POCKET, not out of "plan assets". Remembering that the money in your Plan is your money, just distributed to creditors.

[justbroke]

the guy I consulted also said I should miss a couple of mortgage payments to throw those into the plan so there was less for the unsecured. I almost messed my pants, since I have never been late on the mortgage, and the thought of that floored me. I can understand the strategy now

It's all about strategy. Plus, those two "missed" payments, you can use for other "necessities" like stocking up on food, getting medical work done, getting new clothing, fixing a car, etc.

He's smart, but I've never heard of a lawyer actually giving "constructive" ways to save money in your Chapter 13. Most skirt around the issues.

[albacore44]

It's all about strategy. Plus, those two "missed" payments, you can use for other "necessities" like stocking up on food, getting medical work done, getting new clothing, fixing a car, etc.

He's smart, but I've never heard of a lawyer actually giving "constructive" ways to save money in your Chapter 13. Most skirt around the issues.

well he was an interesting guy. if you read his website he talks a lot about pre-planning within the law. his wife runs his front desk, and kept telling me he was an ethical Att, and some people don't like that but he gets many referals direct from the judges. gave me the impression he probably works well with them . All he does is Bk, 30 years same location.

[justbroke]

well he was an interesting guy. if you read his website he talks a lot about pre-planning within the law. his wife runs his front desk, and kept telling me he was an ethical Att, and some people don't like that but he gets many referals direct from the judges. gave me the impression he probably works well with them . All he does is Bk, 30 years same location.

I don't think he's unethical at all. There is nothing which could probably come of some things that he suggests, other than bad faith objections, but even that is hard to "prove".

I like him. He is operating within the law and is nice enough to actually offer "advice" to his clients. Some BK lawyers just don't want to offer any advice and only make limited suggestions and tend to just get through with that particular bankruptcy. I don't even think it's a question of rocking the boat... I think it's a question of there are lawyers there to advise and counsel their clients on the full benefit and things you can do with pre-bankruptcy planning and in the bankruptcy, and the others that are just BK mills who just churn out debtors, trying to do as little as possible and earn a sizable fee.

(No, this isn't lawyer bashing, just a perspective on the types of BK lawyers out there.)

How can you tell if you're in a BK mill? They never even suggest you get a new car or miss some mortgage payments since you're filing... or anything like that.

(On the other hand, with regard to missing two mortgage payments... if your BK is dismissed, then you'll have to make up those two payments, or be ready for an NOD and foreclosure. Yes, it's a strategy, but is it a winning strategy, I'm unsure. Great lawyer though!!!)

[TooMuchCredit]

Ok, my objections are out on Pacer...all 10 of them. The trustee did move to deny confirmation and dismiss the case.

It seems several are due to the trustee looking at a district specific "Chapter 13 Plan" document. It was originally sent in the original filing in error - it had some other plan's info on it. My attorney sent in an updated form. It still had a couple mistakes on it. It lists the $ amount to be paid to unsecureds and what that % is. Well the $ was filled out, but the % was 0. An easy to fix thing.

The trustee argued that since the car was the only creditor paid in a 0% plan it was an attempt to refinance it and to pay it and none to unsecureds was not in good faith. The car, 401K, and entertainment expense were all argued that I was not providing all of my DMI to the plan.
The doc also left off the mortgage payments outside the plan.

However, the official schedules were correct or close to it.

The negative equity in the house was mentioned as being not in good faith either. I recall reading that a large house payment may not be considered a good faith objection. I think that was in a California district though. Something about if Congress didn't intend to allow the actual house payment B22C would not allow the actual payment to be entered.

So it looks like it might just be a matter of correcting the plan doc, and Sched. I & J. B22C needs one slight adjustment as well. My plan is actually in the 20-30% range so just making those corrections might drop several of the objections.

B22C is SUPPOSED to govern the DMI in above median cases, so probably can fight whatever they argue about on sched. J.

[woeisme]

My lawyer told me flat out that it was against the new BK laws for a lawyer to recommend that a client take on any new debt while considering a BK filing. So while this lawyer may be doing something in his client's best interests, it's my understanding that he is also doing something prohibited by law if advising clients to increase their debts, even if it is to their advantage, like buying a car would be.

[justbroke]

My lawyer told me flat out that it was against the new BK laws for a lawyer to recommend that a client take on any new debt while considering a BK filing.

Your lawyer is misinformed or not up to date on the BAPCPA.

The questionable part was whether an attorney or firm was a debt relief agency or not. This has been hashed out and was found to a.) never have been Congress' intent to make your attorney or a BK firm a debt relief agency and b.) never meant to apply to attorneys. It was found to be unconstitutional when applied to attorneys or law firms.

Your lawyer is not up on the law or you are remembering something he told you 2 years ago! Most Districts found those "Debt Relief Agency" provisions to be unconstitutional when applied to a BK lawyer and/or his firm.

Yes, I read all that caselaw because it was interesting. Have your lawyer look at this citation...

If BAPCPA’s debt relief agency sections apply to attorneys, it means Congress has taken upon itself the authority to determine the advice attorneys can give their clients and what attorney advertisements must say, thereby infringing on the state’s traditional role of regulating attorneys. See Leis v. Flynt, 439 U.S. 438, 442 (1979) (“Since the founding of the Republic, the licensing and regulation of lawyers has been left exclusively to the States.”)
.
.
.


(Milavetz, Gallop & Milavetz v. United States, Case No. 05-cv-2626 (D. Minn. December 7, 2006))

[catleg]

Some of these trustees must really be smoking some good dope.
What's the point of doing a ch13 if you're going to lose your house AND car??
Might as well just quit working and file a chapter7.
Just remember, this is just a prelude to negotiation.
In the ranking of things i'd like my plan payments to go towards, I'd still rather spend money on the lawyer than the unsecured creditors. Adversary proceeding? Bring it on. My lawyer gets paid out of plan assets also, correct? Meaning the BK estate is paying for the lawyer ultimately (he says, hoping to hear someone say this is true).

I learned last night that what I thought about lawyers fees is not really true.
In particular, if you have an upside-down car loan, the attorney has to get in line behind the car lender, so if you don't complete the plan he doesn't get paid!
Interesting reading, might come into play for some of you if you are in that situation.

[catleg]

the guy I consulted also said I should miss a couple of mortgage payments to throw those into the plan so there was less for the unsecured. I almost messed my pants, since I have never been late on the mortgage, and the thought of that floored me. I can understand the strategy now

I can see where this would make sense, but this whole thing already has my wife stressed out to the max, if I skipped the mortgage payment she would have kittens! :-)

[TooMuchCredit]

Update:
Had my motion to value hearing today. 2nd mortgage had filed responses to the motion and Objection to discharge, but did not show up at the hearing so the Motion was granted. So it is essentially on the way to being stripped when I finish my 5 year plan.

Yippie!!

[justbroke]

Update:
Had my motion to value hearing today. 2nd mortgage had filed responses to the motion and Objection to discharge, but did not show up at the hearing so the Motion was granted. So it is essentially on the way to being stripped when I finish my 5 year plan.

Yippie!!

Congratulations on your lien strip!

[woeisme]

Well, this is what my attorney told me in 2007 when we were filing, so I guess it hadn't been hashed out yet, I thought at the time it was horrible that the attorneys couldn't give good advice to clients, glad to know it got fixed since then!

Your lawyer is misinformed or not up to date on the BAPCPA.

Your lawyer is not up on the law or you are remembering something he told you 2 years ago!

[justbroke]

Well, this is what my attorney told me in 2007 when we were filing, so I guess it hadn't been hashed out yet, I thought at the time it was horrible that the attorneys couldn't give good advice to clients, glad to know it got fixed since then!

Excellent. That's what I figured and wrote...

Your lawyer is not up on the law or you are remembering something he told you 2 years ago!

Most attorneys ignored that dumb "debt relief agency" stuff anyhow. However, much of this was "fixed" (litigated) in 2007, although the wording int he Code is still there... it was found to be unconstitutional if applied to attorneys.

[f86sabjf]

definitely get a new appraisal . My house is now worth 80,000 .A year ago it was sitting at 195,000