Almost Ready to Throw in the Towel

[KeepHopeAlive]

I haven't posted in a while. So much has happened, with so few (positive) results. Only posting now as this may be my last sane act...

I apologize for the long post but the details, I think, are important, or at least it was healthy to vent before hurting myself, an attorney, or a trustee :-)

Background: (Filed under old law)

I run a Real estate business. I have rental properties in C-corps and LLC. I filed Chp 7 in a RUSH, to get in under the old law. I told my attorney that I wanted to file a Chp. 7 to eliminate my huge personal credit card debt without affecting my business. He said the trustee may try to attack my businesses, but he gave me no backup plans. I asked him if she would ask about cash in my BUSINESS bank accounts, and personal bank accounts after filing. He said she would only ask up to the filing date.

Of course in the 341 meeting, she (the trustee) inquired about my businesses, the properties they owned. My attorney sat silent as I was totally baffled as to how to respond. I felt like I may has well have walked in court and handed her the keys to my properties. Oh and, of course, she asked how much money I had in my business bank acounts RIGHT NOW. Again, my attorney said nothing... he was TOTALLY intimidated by the trustee. That will be $200/hr. please, thank you very much...

Response to Panic

Tried to back out voluntarily of Chp 7, and take my chances with creditors. Another trustee and my attorney said the trustee won't let me back out without a fight since she is trying to attack my business assets.

I asked my attorney repeatedly about Chp 13, and if there were any books he suggested I read about converting. He repeatedly ignored my desire to convert, and said he knew of no books I could read.

I finally convinced him to convert me to Chp 13, rather than turn all my companies over to the trustee and... of course... went to the library and got a BUNCH of books on Chp 13...

1st Dilemma: Plan Due NOW, Bad Attorney, Weak Data

Yada, yada, yada... my plan is due to be filed in a couple of days... TUESDAY 3/14/2006, and I'm TOTALLY CONFUSED... self employed, no taxes filed for the last 3 years, and coming off a computer crash where data has to be (is in the process of being) reconstructed... I will need to throw some numbers together, but I am scared to death... I think I can submit SOMETHING and modify it later...

2nd Dilemma: Changing Attorneys

Meanwhile... I FINALLY got an "audience" with the attorney I wanted to hire from the "git go". Let's call her, Chp 7 Queen. She is a Chp 7 trustee herself (20 yrs. experience), as well as a BK attorney. She is clearly NOT intimidated by my Chp 7 trustee, and is aggressive just like me :-) She said the Chp 7 trustee could NOT get my corp assets, but the LLC assets very POSSIBLY... also rolled her eyes and called my attorney an idiot... said he should have challenged the trustee on several issues... BUT now that my case is converted to Chp 13, she ONLY does Chp. 7 work... hence referall to her Chp 13 buddy...

NOTE: Chp 7 Queen says I have been overcharged by my 1st Attorney, and NOT TO PAY HIM the $3,000 bill sitting on my desk (I have already paid him $2,500). She said she could have done my case, with businesses for $1,500. She told me 3x not to pay him! But if she ain't representin' me, I'm scared to fight with him too ????

Meeting with Chp 13 buddy... this lady ALSO thought my corp assets were available to the Chp 7 trustee... hence we call Chp 7 Queen, and Queen explains to Buddy.

Now I have to decide the following:

1. File Chp 13 papers with current BAD attorney, just to get the work in. We HAVE to file Monday or Tuesday this week (3/13, or 3/14).

2. TRY to squeeze in schedule with Chp 13 Buddy, to the tune of an additional legal bill of $3,000 (standard for Chp 13 cases in our area).

3. Use Chp 13 to buy time, until I can go back to Chp 7, and hire the best attorney available, even if it means I have to sell some properties just to get the darned thing over with... I don't know if I can take 3-5 years of the BK court looking over my shoulder and telling me what to do...?

Of course the moment I convert to Chp 7, my ex-wife will try to foreclose on my residence (she has a 2nd mortgage payable to her from the divorce). At least the residence is up for sale now, so I can try to pay her off and stop some of the madness...

[SinkingFast]

Where is the "Fresh Start" in all the madness I'm reading lately??!!

I've been questioning our choice of attny. He seemed very knowledgeable in the Consult. Even got on the phone with me when I called for a follow up question. Scored points there.

We get a threatening letter from our Mortgage Lender. Sure he'll handle it. Bring him the letter and $350 and he'll get started right away. That was 3 weeks ago. So far, all he's done is order our Title work and a copy of the sale contract we have on our house. The rest of the time, he's been in Court.

Our deadline is Friday!!

I think at this point, maybe you should go the Ch 13 route, just to get thru this point. Not get dismissed and not be able to file again for, what is it?? 2 years?? Then convert to Ch 7 down the road with a really good attny.

Salvage what you can of your assets and move on with your life.

[KeepHopeAlive]

SinkingFast:

Thanks for taking time to read my LONG post, and thanks for your input. My gut feel is to do as you said: hang out in Chp 13 for a while, get my head on straight, and then go back to Chp 7 with a better attorney (and a STRATEGY other than losing my assets, sanity, and my last few bucks to legal bills).

I was out of town for a week... surprise, my legal bill is now over $4,000 after filing for the Chp 13, and that doesn't include the bills he has built into the Chp 13 plan...

SinkingFast:

As I said, I've been out of town. Is your house sold yet? Did you get your mortgage company calmed down? Did you fire your attorney?

I feel like I was watching an old Batman TV episode that went off as Batman was about to be drowned in a giant milkshake... and of course I was told to tune in next week... what happened next? :-)

[Minnymouth]

Both of your cases are fine examples of things that can GO WRONG in filing bankruptcy.
A lot of it is due to:
1. Lack of advice from a ATTORNEY on what can happen.
2. Business and personal assets intertwined.
3. Attorney not having a game plan in case something should come up.

[Minnymouth]

I agree with doing the Chapter 13 on a temp basis, then start sorting out and deciding what you REALLY NEED TO DO.... and how to go about it....
The trustee is not going to let you get this case dimissed because he see's $$$$$$$ and he's going after it......

Right now its stay in the running, salvage what you can, and try to get the mess cleaned up with a decent attorney on your side............

[SinkingFast]

SinkingFast:

Thanks for taking time to read my LONG post, and thanks for your input. My gut feel is to do as you said: hang out in Chp 13 for a while, get my head on straight, and then go back to Chp 7 with a better attorney (and a STRATEGY other than losing my assets, sanity, and my last few bucks to legal bills).

I was out of town for a week... surprise, my legal bill is now over $4,000 after filing for the Chp 13, and that doesn't include the bills he has built into the Chp 13 plan...

SinkingFast:

As I said, I've been out of town. Is your house sold yet? Did you get your mortgage company calmed down? Did you fire your attorney?

I feel like I was watching an old Batman TV episode that went off as Batman was about to be drowned in a giant milkshake... and of course I was told to tune in next week... what happened next? :-)

Well, we haven't fired the attny yet. We decided not to fire him until we had another one lined up. An attny, all be it bad, is better than no attny at all for now I think.

I did an on-line interview process for one attny. The program is called Rapid Response. Clients go to a website called StopMyBills.com and complete a rather lengthy questionaire. The attny gets emailed, opens the file, it automatically interfaces with the Rapid Response program and the attny has all your info right in front of them. No wasted time for a Consult where the attny says, "I'll have to see what the Means Test has to say." Submitted that late Monday nite. Haven't heard from her yet. May call her tomorrow just to touch base.

Called one back from the first round. We had 2 phone interviews with his office. 1st one was with one of his paralegals. 2nd one was with him. Both phone calls were over an hour in length. Lots of info given both times. But it was odd. When I asked him to schedule a face to face Consult, the attny said, "You get your tax situation settled. Get your papers together, and call me when you're ready." So I called him back. I've emailed him our pre-BK Certs and we have an appt set up for next week.

The house,.........UGH!! I got to talk to a very nice customer service rep a week before our date to Cure. That's pay up or else time. She told me to fax a letter of hardship to the Work Out Dept and see if they would move us to Forebearance to give us a chance for our buyer to close. We do that. Send the letter. Had our realtor fax our title work and the offer in as well. I called back to follow up and make sure the Work Out dept got all that stuff. Turns out, another Rep tells me she was all wrong. We don't meet the criteria to move forward to Forebearance. So I guess we're on the road to Foreclosure.

Talk about cutting it close!! If we get another attny out of these 2 contacts, we may be filing an emergency petition to stop the Foreclosure. UGH!!

[KeepHopeAlive]

Minnymouth:

Thanks for the input. I'm presuming by your timeline, that your case was a Chp 7, and for some reason has dragged on indefinitely?

SinkingFast:

If you have a buyer for your house, when is your buyer scheduled to close? In my state, Ohio, foreclosure usually takes a few months from filing to auction. If your state is similar, you should probably be able to sell your house long before foreclosure?

If your state has faster foreclosures, then hopefully you can talk to the RIGHT person at your mortgage co. and get an extension. My business actually deals with buying foreclosures on a regular basis, and almost daily I'm amazed at how these banks function so inefficiently when someone is actually trying to PREVENT their foreclosure, or sell it beforehand. So we persistently call until we get through to a decision maker and/or the right department/person, etc.

This is one of the many reasons why the foreclosure rate is so high in this country, because the banks are so hard to deal with in loss mitigation.

[Minnymouth]

KeepHopeAlive,

Stay on top of what your attorney is doing........... and yes protect your assets if you can.....

Yes, my Chapter 7 turned into a "nasty Chapter 7" and still is..... I tried to do a Chapter 13 and my payments were at 100% payback and so HIGH that nobody could have made them.............. Thus resulting in the Trustee seizing my home and selling it..... (the mortgage company failed to record their lien on a title thus making it a free asset to me for the Trustee to seize - which no one knew about for 8 years)...

SinkingFast is also experiencing some of those UNUSUAL things that pop-up and take place during bankruptcy that no-one expects but does happen.....

So anyone that goes thru a simple Chapter 7 - no problems from start to finish - COUNT YOUR BLESSINGS!