HELP! Attorney's errors/Have neg. budget plan

[EastCoastVA]

Our attorney has made several mistakes which resulted in a few more mistakes which then snowballed into major problems. We now are upside down in our bankruptcy. The Judge gave us 60 days to find a new attorney and a solution - if there is one.

Is there anyone else out there with an attorney who screwed up their bankruptcy?? I would like to get some ideas/questions together to ask the next attorney on our list and hopefully we'll find a great attorney very soon. I already know what happens when you just leave it all up to the attorney and it's not fun!

Filed: Sept. 2009/Confirmed: May 2010 (delayed 4times because of attorney/paralegal mistakes)

THE ROOT OF ALL OUR PROBLEMS:
A few months ago, I began to seriously question our plan. When I calculated our income on Sched. I - the income was off significantly. I determined that the attorney and/or paralegal had miscalulated the Fed/State payroll taxes and a few other mistakes. Our income shown on Sched. I was about $1,500 more than what we actually had as income to use within the plan. We were in the negative before we even started! We explained the mistakes to our attorney. His answer, decrease our expenses to still make about the same amount of payments. That might had worked several months ago but after shuffling bills around waiting for that confirmation so we could amend.

One attorney we met said we could always dismiss this case, move out of the house and wait for things to fall apart - garnishment and/or foreclosure then refile again. WOW, what fun!

So....... keeping in mind that Virginia opted out of the Fed. Bankr. Exemptions, instead uses Statutory Exemptions and the Non-Fed. Bankr. Exemptions we are trying to figure a way out of this mess!

1) We are considering whether or not to try for Ch. 7 - might have too much income but I heard w/the right attorney and a little imagination, it's not impossible. I don't even know if it would be worth it to keep the house at this point.
-- Veteran's Disability included??
-- Military Ret. or 401k contributions included??
-- From what I read, regardless if we were to surrender the house or a vehicle we still get to claim the payments/taxes on the Ch.7 Means Test?

OR..........
2) Dismiss and try again for Ch.13 - although to come up with attorney fees again we are going to go further behind on our bills and/or mortgage - Not something the Trustee but knows the problem we are in. And, there are add'l bankr laws when you dismiss then refile - not clear on those??

[despritfreya]

Why did you file a 13 in the first place? Was it to save a home, pay taxes, pay for a vehicle or keep non-exempt property? Or was it because you "did not qualify" for a 7? Once I know the answer I might be able to give you some insight.

[tobee43]

TRUST...that's the main issue here.....it's like the church it tells you to trust your priest...and you'll be ok....or trust your rabbi...and it will be ok...NOT!!!! ( i have nothing against priest or rabbi's!!!!!...i'm just using them to make a point! LOVE THEM!)

people have a tendency to put all their trust in what they consider to persons of authority and respect...well....a difficult lesson for certain...ONLY TRUST yourself.

this, may in fact be an expensive lesson, but one must READ everything before allowing an atty to sign your life away....

chapter 13's and i say it over and over are designed for those that can honestly have a clear picture of their future and future income and count on it....for us...it was suggested and i still feel 13's are designed and i'll say it over and over again, to line the pockets of the banks and the atty's.

i think that one new atty is correct....first it takes a while before they can garnish any wages etc.....like...a judgement which will take a while...i know what fun...but i would immediately go in for a chapter 7.....now that you already filed see, if the present situation requires a dismissal and refile for 7 IF YOU CAN.

best of luck...keep us posted!

[EastCoastVA]

Despritfreya:

Back in Sept. we did want to keep the house - with the 2nd stripped it helped a lot. My husband receives about $2,400 a month in Veterans' Disability - with that not included on a Ch. 7, I am sure we would qualify but not under income alone. It would be that second test when you look at our income and expenses. In fact, when I emailed the attorney and told him there was no way we could afford the Amended Plan he wanted to propose he had asked if we wanted to convert to a Ch.7

I don't care if I do have to pay out more money, I won't convert to a 7 with that attorney. I am just nervous now because Ch. 13 has been hell for us and I have no clue what to expect from Ch.7

Thanks!

[EastCoastVA]

Tobee43:

I wish I had looked at this forum BEFORE I filed bankruptcy! You are right, we just believe that the attorney is working in our best interest - because that is what we pay them to do!! After we learn different.

Thanks for the reminder that it takes time to set up garnishments and lawsuits. Right now we are still an active Ch.13 - Until our hearing when we tell the Judge what we plan to do. I really do think Ch.7 would be best. Who knows where the housing market will be in 10 years.

Thanks!

[despritfreya]

ECVA,

While I do not know the specifics I do want to tell you how your situation typically materializes.

Client comes in and states she wants to save home. Attny says fine, how far behind in the 1st are you and is there any equity in 2nd? Client states she is 5 or 6 months behind in 1st and, no there is no equity to cover 2nd. Attny says client can file a 13, cure the arrears to the 1st over the life of the Plan and strip off the 2nd. Attny also says, client must begin servicing the 1st the month after filing. Reality, however, is client cannot afford to service th 1st and make the required plan payment but client insists she wants to keep the home. Attny works on Schedule I and J and "makes it work" so that client can afford to resume 1st and make Plan payment. Attny, in his heart, knows that client cannot do this but until client realizes she is beating a dead horse, attny goes along. Case gets filed and within a few months client realizes she cannot afford the house.

The above scenario happens all the time. I cannot tell you how many times I warn the client that trying to save the house is dumb, but client does not see the forest through the trees. Somehow, I produce a budget that shows client can afford payment. Maybe I drop the food allowance. Maybe I don't list the charity. Client is ok with that because client wants to keep the house but the reality is, client can't afford to keep the house.

Now, I am not saying that is what happened in your case. All I am saying is that I, as an outsider and as an attorney, must give deference to your attorney that he did what his client wanted and made the numbers work.

If the reasons for the 13 are no longer issues then converting may be the right choice. I understand if you are not comfortable with your current attny and, if that is correct, by all means, you should seek out the assistance of someone else. I never fault my client if he/she wishes to enlist another attorney. That is my client's right and, if he/she is not happy with my representation (for whatever reason) then he/she should fire me and hire someone else or go it on his/her own. For me, it is a business decision for the client and I never take it personally.

[tobee43]

I wish I had looked at this forum BEFORE I filed bankruptcy! You are right, we just believe that the attorney is working in our best interest - because that is what we pay them to do!! After we learn different.

Thanks for the reminder that it takes time to set up garnishments and lawsuits. Right now we are still an active Ch.13 - Until our hearing when we tell the Judge what we plan to do. I really do think Ch.7 would be best. Who knows where the housing market will be in 10 years.

Thanks!

we just all get so scared of that boogie man that we lose site of ourselves...it's understandable...

i always use an "general" rule...and try to apply it with everything...slow down...take your time..if they say you have to sign RIGHT now...it's the first sign NOT to...read everything.

you made no mistakes...we are just probably much older and been there and seen that... you will be fine...i'm certain of it.

[EastCoastVA]

Despritfraya:

We actually did go to our attorney completely open to what was best for us. My husband's company lost his government contract close to home two years before we filed and the closest job he could find was three hours away in DC. We've been paying mtg and rent plus he drives home every weekend. He's 90% disabled veteran and requires several meds and regular monthly visits to the doctor but all his problems are managed with some pain here and there. We didn't know anything about bankr. or the Means Test nor what counted where with Va Disab, Ret pay and his paycheck. We followed the attorney's advise to keep our home and my husband would continue to try to relocate back home. With the enconomy it's been tough and we have a screwed up budget. The Trustee even said to us we needed to find an attorney that would work in our best interest. I wish I would have found the mistake BEFORE we confirmed and our attorney hadn't already received his full fee from our bankr. plan. But it's done now so we are going to have to pay again.

Regardless, we might have been able to make it in the Ch.13 but again as noted, the mistakes made on our budget we were $1,500 in the hole every month and didn't even realize it because his DC rent did go up and we had a couple extra med. bills which the attorney kept telling us we needed to confirm then amend. I explain the errors made and neither him or his paralegal knew how it happened because we provided all the correct info. Again, his answer to his mistake was to reduce expense and budget a Trustee payment of about $850 w/a $200 for one year to a creditor - And, we still have over $3,000 of past due medical bills right now and missed our July's mtg payment. We are in deep deep waters!

I have been struggling w/bills since we started, shuffling bills around by holding off on this bill to pay that since Oct of 09 Not even realizing why. We have been so stressed and it's been a very rough journey! At this point, we are just hoping we can have some place to call home. What if we don't qualify for 7 and we can't afford a 13? If we have to give up the home and vehicles then that is what we have to do. We still have college kids and high school kids at home. Right now our best hope is to probably move to DC where my husband is going to switch to a larger apartment and they have public transportation.

I just don't know how Ch.7 works and I can't go through another nightmare like I have for the past 9 months. I want to be a little more prepared and actually know a bit of what my options are so that I can ask questions and understand what is best for us.

We met w/one this week attorney that said Va Disb is included on a 7 means test but not 13. He also said that Rent is not counted for on a Ch 7 or 13 means test - we have to have a mortgage to claim the exemption. If we do a 7 and give up the house we won't have the mortgage, the rent won't count and so we won't qualify for 7? We scratched him off our list. The Trustee gave us the name of an attorney that we are meeting with next week so fingers crossed!

Thanks again!

[ColoradoBell]

You asked in your OP if there was anyone else having trouble with the decisions their attorney made for them.

I'm having trouble with my attonrey, but not because she made decisions for me. It's because she isn't doing what our fee agreement stipulates that she will do and for what price.

When she realized that I wasn't going to pay for things the 10k I paid or am paying her (4k up front, 6k in the plan) included per HER contract, she said she was going to withdraw, leaving me with 30 unanswered objections/motions due last week. When I asked if she was withdrawing because she was overwhelmed with my x's onslaught of litigation, she said no. When I asked if it was because she'd agreed to 'do it all' for 10k, she said no. She said it was because I had too high expectations of her and of what I wanted the Bk to accomplish. (I've been making my payments according to the plan and all that I wanted was for her to avoid the liens that impair my homestead exemption. This doesn't seem too complicated, if you file a motion to avoid and the lien holder objects then you file a responsive argument and argue your points in the hearing. It seems that she doens't know how to do that, but she hasn't even tried, so I don't see where it is me having too high of expectations since the plan included avoiding the liens from the get go.

Sorry to go on, but I wanted you to know that I've found very few attonreys who have a sense of honor or ethics. Strong words I know, but to take my money and then withdraw with motions due in two days is just not reasonable and shouldn't be allowed. It sounds as if in your case, your attorney made errors in the calculations which should be corrected by amending the plan. Has he offered to do that? I guess I don't quite understand what happened, but it sounds as if the trustee is trying to help you which is also a bit unusual and seems to imply that the trustee felt you weren't getting a fair shake from your attorney too.