waiting to file a chapter 13?

[AtWitsEnd]

Hi, I have lurked here for a month and I've learned so much from all of you. I do have a few questions and would appreciate any opinions you can give me.

My husband and I met with an attorney for a consultation and were given a list of documents to bring back for a second meeting with the paralegal, and we also were asked to bring along a check for $774. I gathered the documents and brought the check and she filled out a bunch of papers for us to file. Over the past 6 months my husband worked tons of overtime as he was the only person to cover a territory and for call outs. When the paralegal figured his income she added 190.00 for
1/12th of our past income tax and also added his 401k contribtions as in PA they are not allowed. This totally inflated his actual net income therefore making our monthly payments quoted at $968/month to the Trustee. (I know the paralegal is correct and her figures are right) We are current on our mortgage, car and secureds..the filing is all for credit card debt.
Anyway, getting back on track In October the overtime was cut back as they hired a new employee to help cover the area. Wouldn't it be in our best interest to wait a few months to file when it shows our income as being "true" to average? Our income will be about $500-600 less a month during the next year. We stopped paying our credit cards Oct 23rd...how much trouble will we be in by the end of March? Our meeting was just last Thursday and of course when I called Friday to inquire, they were not in. She seemed to want us to file by the end of November but we are really not comfortable with the numbers. Are we obligated to file by the end of the month because we gave them $774?

Thanks in advance for your comments, I know I was a tad long-winded

[CATCHMEIFYOUCAN]

I wouldn't think you are obligated to file until YOU are ready (don't let them pressure you!) Its a safe bet to file later and show "less," income and not all that overtime he did. All that overtime does inflate your income and possible "payback," if you were to file now. When you file, you have to show 6 paystubs prior to filing (at least thats what I had to do). I filed for Ch13 and I had two full time jobs. So I had to show 6 paystubs from each job. I was able to convert to ch7 couple months later simply to get out of having to pay $800 a month in a ch13.

Best of Luck to you!

Catchmeifyoucan

[CindyLou]

wait wait wait!

[lrprn]

Are we obligated to file by the end of the month because we gave them $774?

Your lawyer works for you, not the other way around.

In this situation, it makes far more sense to wait until your husband's income returns to its normal level and not file until you absolutely have to.

If you file now with his inflated income, you are setting yourselves up to end up dismissed or having to file an amended plan (which typically means you pay the lawyer more) down the road.

Hold firm. File when the time is right for you, not for your lawyer.

[Skouris]

What district of PA are you in? I am in the Western District.

[AboutToBK13]

We are in western PA as well. Anyone with info/advice on the western district would be helpful.

[Skouris]

I can tell you what my experience has been, although I did file under the old laws. My 341 was very easy. One creditor showed up, the attorney for the company that I leased my car from, and they requested a higher payment because they wanted the lease to be paid off before the end of the plan term. I was asked if I could make the higher payment, I said yes, and the plan was confirmed. Since then, I have hardly heard from the Trustee at all. As long as you make your payments on time, it is smooth sailing (in my experience). The Trustee has never asked for my tax returns, and doesn't seem to care about raises or promotions. Like you said, you're not allowed to contribute to a 401K. Not contributing to my retirement for three years made me a little uncomfortable. My discharge is being delayed by the fact that my plan term was increased last year due to higher mortgage payments. I have now paid all of my unsecured creditors and I have resumed paying my secured creditors myself. I am just waiting on a hearing that is scheduled for December 6th to decrease my plan term back to 36 months. Hopefully there won't be any snags and I will get my discharge soon. Let me know if you have any other questions.

Skouris

[AboutToBK13]

Skouris, who did you use as your lawyer? I have heard that Ms. Winnecour the western district trustee can be "challenging" at times. Having a lawyer that has a good relationship with her is going to be important I think.

We are currently making payments to our lawyer and plan on filing BK13 in the Feb. or March time frame. We have about 116K in unsecured debt and because my wife just finished grad school, we finally have a decent income (with three kids, we fail the means test miserably).

Had we filed earlier (before the wife graduated), we may have been ok for a CH7 but most likely we would have lost our house because for the last year we were living out of state and renting (she had a required internship). We tried to sell the house but it didn't sell. We used all of our savings to keep it above water but at the expense of our unsecured creditors. Now, we are in a position where we could work with them, but they won't work with us. They all wanted large payments now and we couldn't cut it. We haven't paid the CC's sense February. They have all CO by now and are with CA's.

[lrprn]

Skouris and AboutToBK, please take this personal conversation to IM - thanks!