Cannot gain confirmation, pushing a year

[TTBD]

Filed 7 in October, 2005, prior to new law;
Converted in January, 06, to a 13, court date in February;
Plan objected to in February, can't recall why, new court date in May;
Began monthly payments of $430.00;
We didn't have to go in May, only attorney, plan objected to in May;
Our second mortgage objected in May, new court date July;
Judge lifted stay on our vehicle so GMAC could reposses if we get behind on $550 payment. Court's do not like the $550 monthly payment we are making either; Attorney went in July, court wants $1940 and 2nd mortgage obj to plan again. Judge wants to know why 550 is still part of our expenses since stay was lifted (well....we're still making car payments, that's why).
New court date in October.
In August, I investigated why 2nd mortgage keeps objecting, discovered they lost 2 payments we made Pre BK, (we had taken arrears out of plan since we paid the 2 behind payments....didn't know we shouldn't have made those payments)
Attorney is now putting arrears back in. Plus attorney is showing our car payment to be on $450 instead of $550, so $100 will go into payment, along with a $100 mistake he made - he showed our $100 401K payment as an expense and it is not claimable)......proposal he is giving to Judge in Oct is to now up our payments to 2120 for the next 3 years.

Our delimna is this: We need closure. Should we dismiss our attorney and get a new bk attorny. Our current attorney wasn't/isn't a bk specialist, but he was personable, which we needed when we first applied back in 2004 (yes, 2004!). I have contacted another attorney who cannot talk to me until I dismiss my attorney and then he said he'll have to see if he takes our case, which puts us at risk of losing our attorny and this new attorney not taking us on. We need confirmation though and can't continue to have our payments keep going higher. Our attorney tells us that we have had glitlches along the way that he has never seen before! (another glitch was that our house became listed for a tax sale as the bk paperwork did not make it to the correct treasury department. Our payment will now be at almost 25% percent of our income, which is the amount creditors would be allowed to garnish if we dismissed our case! We feel we are at a crossroad and don't know what to do. I appreciate all of your opinions on this board as have been reading for quite sometime now. Thanks!

[treehugger1]

You might ask your atorney upfront if they feel comfortable continuing. If not, then certainly they can connect you with a "colleague" that can assist you. On the other hand, it could be that there were simply an awful lot of circumstances that ran together and over the top of each other. If you feel comfortable with your current legal support and they feel comfortable, and you can communicate with one another, you might ride things out until the hearing.

I have a question? Through all of this, is your "stay" still in place?

You state that your most recent plan provides for a payment of $2120 and later state this is 20% of your income. When I do a bit of math, I get your potential take-home income of $10600/month. If this is the case, I can see why the courts might have some objection to $450 - $550 payment plan. I don't know your situation, but I can see how a net income of $10600 versus payment plan as low as $450 - $550 might raise an eyebrow or two. Do you have extremely high expenses? Is it possible to substantially reduce your expenses and provide the trustee/judge with a reasonable compromise?

[treehugger1]

Oops, my apology. You stated payments of 25% of income. Assuming you meant net (take-home) income, this relates to a monthly take-home of 8480. Sorry.

[SinkingFast]

Oops, my apology. You stated payments of 25% of income. Assuming you meant net (take-home) income, this relates to a monthly take-home of 8480. Sorry.

And the $550/mo is a car payment, Tree. The Court is objecting to such a high car payment. The Court lifted Stay on the vehicle hoping TT wouldn't remain current on the payments. The car would be repo'd and the Court would have an additional $550/mo to go after in plan payment money.

I gotta go back to why, if you filed under Old Law as a Ch 7, did you ever convert to a Ch 13 in the first place??

That right there may a big part of your problems.

The Court is HUGE on accuracy the first time. They don't like it when filers amend filings to add creditors or change expenses or anything like that.

The subsequent issues you've had with the Court could all be a dominoe effect stemming from the Conversion.

[treehugger1]

Thanks, sinking. I was just estimating since the original payment plan was $430.00. Something seems a bit strange.

[TTBD]

What a good point! I wonder if this stems from the original filing of the 7. I knew from the beginning we couldn't do a 7, as I had begun my research in August 2004 when we first decided to file and all the math I did pointed to a monthly payment of $1500 to the courts, but our attorney wanted to try. We retained him in October 2004 and he was suppose to file in January, 2005, however procrastinated to the last moment one week before new law. Our income wasn't always this high either, as I was able to make a big career move in the last part of 2003 which boosted our income considerably. We didn't realize the income since the hole we had dug ourselves into was so huge, however we had every intention of paying creditors back. I had everyone "locked in" at 3.9 and 5.9% for life, or at least I thought I did, until one of them decided to raise us to 29.9%. I did not know that was legal and was certainly not anything we could afford. All the remaining creditors followed suit and within 3 months, everyone was at a 29.9% and we hadn't missed any payments prior. I didn't know we could stop making payments to them either....this has been an extremely long, exhausting, educational and very very stressful process. Do you think we should take a chance and dismiss our attorney and go with a bk attorney (who would know the reasons for all the twists and turns I'm sure) as I didn't realize that is why they lifted our stay until Sinking Fast stated so....makes sense! Then what, they think you can travel to work without a car? There was a reason too for the high car payment as we were able to get a 0% interest, which we thought was a good thing at the time (getting out of leases and back into payments was the problem and a nightmare in itself). I also get scared each time that this will never end and I just need it to end. I appreciate your thoughts.....oh, and the reason we went from $430 to $1920 is our attorney had put some things in the plan back in March that he hoped the judge would let stay in there and he wanted to try....the trustee took them out and explained to us what we needed to do, which I thought we had done and the first figure the attorney came up with for the next court date was $1500, and then when he consulted with the trustee clergy prior to going to court he told us he was pretty sure they were going to want $1920. So we began making the $1920 payments thinking that plan would get confirmed, and then it was denied. Something else he said that was strange as when we had the last court appearance, he said, I'm going to make sure I am there this time. I didn't pick up on that statement right away since I was so stressed by so many other things! Thanks!!

[SinkingFast]

You would probably be best off with an attny that specializes in BK's.

BUT,..........

You filed Old Law. As long as your case is not dismissed, Old Law rules stay in effect for you. You started Old Law, so Old Law rules hold. Which could be good in your case. Not having to deal with the Means Test and the Median Income.

Generally speaking, with BK attnys, the new one will want you to officially terminate to first one before the new one will take your case. You'd need to ask any new attny you Consult with if the change in Counsel will be seamless for your BK. ie,........ Changing attnys won't cause your current case to be dismissed. If so, what would be the ramifications.

To your CC interest rates changing,.......... Bobby's Girl just posted a link to a good article that will explain that for you.

http://www.bankruptcyforum.com/showthread.php?t=10316

As you'll see, nothing is hard and fast about the interest rates CC charge customers.

The large car payment,........ Several other posters have commented their attnys would not submit their plans or file for a reaffirmation on higher range car payments. The Court probably considers your car payment to be excessive. Why pay $550/mo for a gas guzzling SUV, or luxury sedan, or sports coupe, when you can pay $350/mo for a Soccer Mom mini van that will do the job just as well. That's the opinion of the Court. "Reasonable and necessary". Frills are not an option with the Court.

[TTBD]

Thank you SF for your great information. I will look for some other posts regarding car payments. If they don't allow high payments into a plan, how do they expect you to get a lower payment when no one will give you a loan, or it would be with a high percentage, and you'd have to get that approved too, which would delay confirmation wouldn't it??? :-)

[aa06a47]

TTBD, you need to ask your attorney to set up a meeting with the trustee to iron all the objections out and fix the paper work. You should try if at all possible to be there for the meeting. Keep the judge out of it and try and settle things with the trustee.

Another thing, call your mortgage company and see if there is a change of address to mail payments while in BK. Sometimes they have BK people send payments to there BK department. It amazes me how so many mortgage companies "lose" payments while the client is in BK, and never lose payments when they are not in BK.

Your car payment of $550. doesn't really sound excessive to me. It is secured debt and should survive the bk. I know under the new law, it is what it is.

You might (last resort) call the trustee yourself and ask them if your attorney is capable of handing this case or is he/she way over there heads. They might not answer your, but then again, they might.

[FoolAndHisMoney]

Your car payment of $550. doesn't really sound excessive to me. It is secured debt and should survive the bk. I know under the new law, it is what it is.

Old law just about everything is at the judge’s discretion which is why the judge thinks it's unreasonable. New law you may keep a Jag or Porsche and the high payments as long as it's a secured loan and no one including the judge can object as long as it wasn't purchased while contemplating bankruptcy.