Getting ready to file - sacred to death!!!

[Napoli1986]

I lost my part time job 2 weeks ago and we realized that paying all our unsecured debts ($60000) plus a mortgage and a HELOC was impossible (leaving $40 to live on/month). Talked to a bankruptcy attorney and decided to file Ch13. My income, however, for the last 6 months goes into the means test resulting in a payment of $1544/month for 5 year. The attorney will propose a payment plan with a payment of $750/month based on me not having any income (I am not even eligible for unemployment!!!). Also, since we are underwater with the mortgage and HELOC the attorney will file to strip the HELOC.
Does anybody have any experience with this payment plan situation?? We are filing in Tampa next week!!!

[catleg]

The means test is irrelevant for you, it will go strictly based on schedule I/J and whether it looks like you've got enough income to support a plan payment.

[Pandora]

talk to another attorney before you sign with this one. You have alot of information missing so lets start from the beginning:

Yearly income?
Debts?
Arrears on house?
Value of house to HELOC?
Owe taxes?

Just because you are above the median doesnt mean you must file CH. 13 (gosh I am so tired of attorney's who tell clients "above the median..automatic Ch. 13") just not true. You can be above median but have negative DMI, thus resulting in a Ch. 7 filing. If your goal is to simply strip the HELOC, then CH. 13 is the only way to do so. BUT... I question your attorney because you state you only have $40 to live on, are you behind on your mortgage, HELOC, etc...? so where exactly does the $1544 / $750 payment proposed come from in addition to all other bills??

As catleg pointed out, your Schedules is the 2nd part of the means test equation. Do you have positive DMI when it comes to your Schedules? If so, then the other scenario applies: you can also be qualified for a Ch. 7 (i.e., means test=pass) however due to +DMI on Schedules, you could become a Ch. 13 case (which is what we did)....

Have you actually taken the means test yourself, and entered all information (debts, expenses, etc) to see what's what?

[frogger]

(gosh I am so tired of attorney's who tell clients "above the median..automatic Ch. 13")

Tell me about it. Bunch of either lazy or ill-informed attorneys out there!

[Pandora]

Tell me about it. Bunch of either lazy or ill-informed attorneys out there!

aint that the truth my green friend! I think for every great attorney, there are 3 incompetent ones *sighs* at a minimum. I believe that some just tell people that because they're overbooked with BK filings and dont want the hassle / headache.

Should be tied out in the desert, buried up to their necks LOL!

[tmkats]

aint that the truth my green friend! I think for every great attorney, there are 3 incompetent ones *sighs* at a minimum. I believe that some just tell people that because they're overbooked with BK filings and dont want the hassle / headache.

Should be tied out in the desert, buried up to their necks LOL!

LOL. The more I read on here, the more I'm glad I hired the attorney I did. He heard our combined income and intially said "WHOA". But after he ran the means test for us and included all of our expenses, we came out with -$1,500 DMI and qualified me for CH 7. I'm paying through the nose for him, but I'd rather do that than take a chance with anything.

[sunshinepa]

aint that the truth my green friend! I think for every great attorney, there are 3 incompetent ones *sighs* at a minimum. I believe that some just tell people that because they're overbooked with BK filings and dont want the hassle / headache.

Should be tied out in the desert, buried up to their necks LOL!

And I think some just want the extra money a 13 pays them. After all, they get almost double, once they confirm the plan they do very little work but get paid monthly for the 3 or 5 year plan. Pretty nice to just sit back and be the priority payment with nothing to do.

[Napoli1986]

talk to another attorney before you sign with this one. You have alot of information missing so lets start from the beginning:

Yearly income? After taxes $4918/month
Debts? $60000
Arrears on house? No
Value of house to HELOC? 1. Mortgage $159000, HELOC $50000, Value of House $98666
Owe taxes? No

Just because you are above the median doesnt mean you must file CH. 13 (gosh I am so tired of attorney's who tell clients "above the median..automatic Ch. 13") just not true. You can be above median but have negative DMI, thus resulting in a Ch. 7 filing. If your goal is to simply strip the HELOC, then CH. 13 is the only way to do so. BUT... I question your attorney because you state you only have $40 to live on, are you behind on your mortgage, HELOC, etc...? so where exactly does the $1544 / $750 payment proposed come from in addition to all other bills??

As catleg pointed out, your Schedules is the 2nd part of the means test equation. Do you have positive DMI when it comes to your Schedules? If so, then the other scenario applies: you can also be qualified for a Ch. 7 (i.e., means test=pass) however due to +DMI on Schedules, you could become a Ch. 13 case (which is what we did)....

Have you actually taken the means test yourself, and entered all information (debts, expenses, etc) to see what's what?

Yes , I did teh means test myself and also came up with teh $1544/month payment with my income for teh last 6 month, without that it would be about$750/month.

My attorney is actually pretty good and took her time to go over things. She used to work for the Ch13 trustee here and knows how this guy thinks.

[Pandora]

Yes , I did teh means test myself and also came up with teh $1544/month payment with my income for teh last 6 month, without that it would be about$750/month.

My attorney is actually pretty good and took her time to go over things. She used to work for the Ch13 trustee here and knows how this guy thinks.

Not to doubt if your attorney is good or not... but - did your attorney advise you to hold off on filing until your 6 month income is lower?? That should be the first thing advised to any client, especially if there was overtime and/or bonus's during that timeframe. I'm assuming that amount is based off the part time job....so if it were me, I'd wait to file until that part time income drops off the radar.

You're attorney, as it stands, has you pegged to possibly pay 100% to unsecured creditors, yet you are under median for your family on a 44K salary; he/she should be doing all they can to get as little to unsecured creditors as possible. Your schedules is whats giving you such a high DMI (hubby's SSD) however you need to claim EVERYTHING you can in order to get that DMI down...

[jetsfan2010]

Not to doubt if your attorney is good or not... but - did your attorney advise you to hold off on filing until your 6 month income is lower?? That should be the first thing advised to any client, especially if there was overtime and/or bonus's during that timeframe. I'm assuming that amount is based off the part time job....so if it were me, I'd wait to file until that part time income drops off the radar.

You're attorney, as it stands, has you pegged to possibly pay 100% to unsecured creditors, yet you are under median for your family on a 44K salary; he/she should be doing all they can to get as little to unsecured creditors as possible. Your schedules is whats giving you such a high DMI (hubby's SSD) however you need to claim EVERYTHING you can in order to get that DMI down...

I agree with Pandora. Unless you are in a situation where you are losing your house/cars/ etc and have to file now, wait till your 6 month look back is lower

[Napoli1986]

My attorney mentioned waiting 6 months to file but that is not an option since my husband could loose his job (security clearance) over unpaid bills and collection attempts. Also, we could not handle the constant calls from creditors - miss one payemnt and the calls start immediately up to 6 - 10 times/day!!!
The idea of filing bankruptcy scares us to death but it seems to be the only way to get a handle on things. We even tried debt consolidation but they want too much money and debt settlement is as rippoff that hardly ever works (your debt continues to increase with late fees and highter interest). Also, we may be able to strip the second mortgage - 1rst mortgage balance $159,000, 2nd mortgage $50,000, house value $98,666!!! - which will certainly be a relief!!!!

[LadyInTheRed]

You're attorney, as it stands, has you pegged to possibly pay 100% to unsecured creditors, yet you are under median for your family on a 44K salary;

Where are you getting $44k? OP said $4918/mo after taxes. That's over $59,016 a year after taxes. I also don't see anything about OP's family size.

[Pandora]

Where are you getting $44k? OP said $4918/mo after taxes. That's over $59,016 a year after taxes. I also don't see anything about OP's family size.

Ya know what? You're right... I must've confused this poster with another one when I posted the 44K; had previously posted that day to another person in the same situation. To the OP..my apologies

Keep me on my toes there LITR!

[LadyInTheRed]

LOL. Pandora, I've come very close to doing the same thing when there were two people with similar issues.

[Pandora]

Well at least I'm not the only one then eh? Must'a had too many of those yummy strawberry "refreshments" you made LOL!