Chapter 13 Scam

[Penny Less]

If you think you are a chapter 7 or are borderline be sure to see several different attorneys before going 13.

My first consult ended up being with a mill that did 13's. I didn't know this. Apparently the scam is to get money from you for doing the 13 then when your plan fails (they want it to fail) get even more $$ from you to convert to a 7.

Pretty sick, huh?

[Flamingo]

A trustee will not confirm a Chapter 13 plan if he/she thinks it will fail. Chapter 13 plans mostly fail because the the filers cannot learn or refuse to budget and cannot cope withi the huge lifestyle change that a Chapter 13 payment plan brings.

[Penny Less]

I was told that I should get a higher paying job just so I would qualify for a 13, then come back. I qualify for a no-asset 7 right now. Basically they were willing to prop me up as far as it took to get past the trustee. Their major selling point was that I would be able to re-declare bankruptcy sooner with a 13 - yeah like I want to do this more then once!

I decided on a different lawyer who told me that there are an inflated number of 13's in my area and that it's a problem here.

[sassiebaz]

What is the usual fee to convert from a ch13 to a 7?

[maddog2112]

I`m converting right now, previous and current lawyer quoted $1200.

[rrockinggramma]

report the attorney to the ethics board in your state. But I am glad you found an attorney that will convert to a chapter 7 for you.

[Penny Less]

I didn't go with the 13 - that was just during my "free" consultation. So no harm no foul but I wanted to warn people here. The offer was $500 down and they were "sure" they could get me into a $100 - $150 a month plan for 3 years. If I didn't have the money saved and I didn't have this forum it would almost seem like a better deal as they wanted 3k up front for a chapter 7.

The attorney I finally chose is charging me $1700 + the $299 filing fee for a 7 and will be present at my 341.

Penny Less
// Slinking back over to the Chapter 7 forum

[justbroke]

It's a real shame that debtors are starting to believe that the attorneys are running scams. I'm not defending the mills, as I believe that they are just in it for the money... in the purely capitalistic sense of the word.

One thing is for sure... the collective "we" on this forum will continue to encourage debtors to shop at least 3-5 attorneys before settling in on one. This is precisely why you need to shop around. Many "mills" just want you to file and are more than happy to do "conversions" for you as part of their business model. Yes, they take advantage of the person who thinks they need to file "tomorrow", but they do provide a service.

Believe it or not, there are attorneys and/or firms that "specialize" in one particular part of Title 11 and will always push people into that part of their specialty. There are Chapter 7 and Chapter 13 bankruptcy mills alike. This is why you need to shop around.

As already posted, if you feel like the attorney may have crossed a line or appears unethical, there are appropriate channels to report that person.

[lillybell]

My attorney was soooo friendly at first and told me he would handle my case persoanlly and would allow me to pay his services in the "plan"--then when I came back it was suppose to be already for me to look over--he was a different person. He was mean, rude, kept telling me you make a lot of money--treated me really awful. I asked himabout the disposable income-on my schedule J, and 22C that I didn't see the allowable deductions..my long term care, my son's out of pockets expenses, my FEGLI and mandatory retirement, etc. His paralegal put them into line 55--I knew about this schedules, because I was going to file pro se and decided to get an attorney--he wants $3,000--to be paid out in the plan. I'm going to go pro se--I've waited long enough-I guess now I need to send him a certified letter firing him-my $300 bucks is out the window. WOW-what a horrible experience with anattorney.

[kym]

We converted from a 13 to a 7 and it was $500 to convert it... Our lawyer wanted us to do a 7 in the beginning...and we wanted a 13... so in the end we did both...

[lrprn]

I was going to file pro se and decided to get an attorney--he wants $3,000--to be paid out in the plan. I'm going to go pro se--I've waited long enough-I guess now I need to send him a certified letter firing him-my $300 bucks is out the window. WOW-what a horrible experience with anattorney.

Before you kick him to the curb, go back and tell him exactly what you told us. Have him explain why he left off expenses you thought were allowable. Don't leave until he explains why to your satisfaction. He may have very good reasons for putting your plan together the way he did....or he might not. You need to find out for sure before you fire him.

You are taking a HUGE RISK trying to file a Ch 13 on your own. There are so many gray areas in how the Ch 13 portion of the bk law is interpreted. It's so incredibly easy to make an innocent mistake and find yourself in serious trouble.....trouble that's going to cost a lot more than $3,000 for a lawyer to fix.

I responded to your similar questions on another thread asking if you have to file Ch 13 because you want to keep an asset, or if you could, would you rather file Ch 7?

[lillybell]

great advice

OK-I have to put my emotions on the shelf. I got myself into this dilema-your right -I will. I can't file Cptr 7-I make too much money on paper. I was paying everything until I received notices that my CC tripled their interest rates and they wouldn't change them back. The principle never went down. Thank you so much for your repsonse.