Advise needed PLEASE!

[sophie]

We've been in bk for 8 months with still no outcome. Bottom line is our lawyer says we passed the means test meaning we qualify for a 7 and the trustees (both bk and US) say we didn't. At this point the trustees are asking for dismissal not a 13. Anyway, if we don't have the money for a payment plan, and the trustees won't allow us to do a 7, what's our choice? They want us dismissed 'cause they said we misrepresentated our income (so not true--they see everything so I don't know how they can say that). Also they said our debt (it's all unsecured) is due to consumer debt. Again, totally not true. It was all from me either writing out visa checks to pay our taxes or monthly bills or switching from one visa to a lower visa due to my husband's business failing. I don't think there is 2% of our (over 100,000) debt from things I actually bought.

Advise????

[HHM]

There is nothing wrong with your debt being consumer debt, that is not the issue.

Basically, if you lose in court and your case is dismissed, then you are back to square one, you still owe all your creditors the money you owe them and the creditors can take whatever legal action they like to collect it. Generally, if your case is dismissed, you must wait at least six months before you can refile.

Regarding a chapter 13, you can fail the means test if you have so little as 100$ per month in disposable income. However, if you could actually pay $100 per month in a chapter 13, that is not such a bad deal...paying $6,000 to pay back over $100,000, not bad.

[sophie]

So...

So interotherwords, we shouldn't fight and go to our lawyer and tell him, before the judge makes a decision, we want to file a 13? What if the figure our lawyer comes up with is not what the trustee wants? Is there negotiation or is it what the trustee says?

Also, do we have to start all over? Or do we just make a plan and go right into a 13?

[HHM]

The first consideration is, what does your lawyer think, he is the one that is going to court to argue this (although you will probably need to be there to offer some testimony)...what does he say your chances are?

As for conversion, in a way it's like starting over...your petition probably won't change that much, but now you must add a chapter 13 payment plan and you will have a 341 meeting with the chapter 13 trustee. The payment plan is, and is not, a negotiation. Your payment will depend on various factors (you don't just get to pull the number out of a hat), and yes, the trustee's job is to try to get the most payment he can get.