Going in front of a judge...has anyone been at this point and won?

[mylife]

We are at the end of our rope and the last point before we decide whether to convert to a 7. Our Trustee has been difficult and keep asking for more and more, information and money and our attorney sees no problem with complying. Now we're at the point where we know we cannot afford the extra money and have said that we would like to go in front of a judge. We had proven that my husbands income decreased which the atty estimated at $600 a month but, he said mine increased by $800. I do not know how this figure was calculated but he included my commission which is not guaranteed and flucuates with the market. My ytd income is also the same now as it was a year ago. So instead of going with the increased payment as the atty suggested, we said no, we'll go in front of a judge. I don't know what else to do as I really don't want to convert to a 7. Was this a wise decision?

Any advice is appreciated.

Thanks

[justbroke]

Yes, sometimes you need to fight the Trustee and go before the judge. You will live or die by that decision. The Judge will want evidence that your income didn't go up, but you are talking about your commissions. Remember, Chapter 13 is more "forward" looking especially after the Lanning decision.

Best of luck to you.

[despritfreya]

Why is your attorney not suggesting a compromise?

You state that the way your attny has calculated your Schedule I (income), he has included commissions thus increasing your average income by $800.00 per month. You state that those commissions are not guaranteed and fluctuate. Ok, so why don't you calculate your income without the commissions and agree to turnover any commission you receive in the future? This would keep your monthly payment at a level you can "afford" while providing your creditors with compensation should you get any windfalls that are not reflected in the budget. I have used this approach with my clients very successfully.

If this suggestion is not to your liking you are missing the point of a 13. You are required to turn over your disposable income and that is typically based upon your average earnings less your average “allowed” expenses. This necessarily includes commissions, bonuses, etc.

I see that you have numerous posts relating to the 7 so why have you not already converted? Is it due to the lien strip? Since it appears you have disposable income I have to wonder if you can convert.

Des.

[mylife]

The atty is going along with whatever the trustee is suggesting, why I don't know. The commission was included initially and has not changed since filing except by a few dollars, nothing significant. As for not including the commission and turning over anything in the future, I did not know that was an option.

We have not yet converted because our atty wanted to give it another try before we do. He also says that we will be in a better position financially at the the end of the 5 years if we remain with the 13. We have the lien strip, a car we crammed down and a past due mortgage balance.

I apologize if there are too many posts but I'm seeking answers to help us make the best decision for us and I'm not as knowledgable about this as some.

[mylife]

Thanks justbroke, we're hoping for the best!!!

Yes, sometimes you need to fight the Trustee and go before the judge. You will live or die by that decision. The Judge will want evidence that your income didn't go up, but you are talking about your commissions. Remember, Chapter 13 is more "forward" looking especially after the Lanning decision.

Best of luck to you.

[despritfreya]

The atty is going along with whatever the trustee is suggesting, why I don't know. . . As for not including the commission and turning over anything in the future, I did not know that was an option.

Your attorney needs to think "outside the box". If this suggestion is something you would like to explore, mention it to him.

The lien strip and cram down may be reasons to stay in the 13 if you can get to a monthly payment you are ok with.

Des.

[mylife]

Thanks Des, I'll mention to my husband first. Sounds like a good idea.

I just sent an e-mail to the atty so we'll see!

[BnkrptcyLwyr]

A 13 can indeed be more beneficial long term than a 7. If your normal expenses exceed your normal income, then a Chapter 7 doesn't necessarily help because you're in the red each month, and you'll be struggling even with all your other debt discharged. A 13 will allow you to get rid of the second mortgage and modify your car payment. At the end, you're finances should be better. I have had some clients where it turned out to make better sense to do a 13 than a 7 - because of the monthly cash flow, they needed to restructure.

Of course, with the housing market as it is (especially here in Michigan), I advise ALL clients to seriously consider dumping their existing home, and to rent and ride it out and purchase a much cheaper home in the future. The housing deals are too good to pass up around here ... and it will be like this for a long time I think. Live rent free in your current house for about a year around here (or more) and save your money for a potential down payment.

[mylife]

Hi BK Lawyer,

Thank you for the useful information here. Our lawyer said the same thing that the 13 will be more beneficial financially in the end. We have a lot to consider even with giving up our home. We're expecting a baby in March so we need some stability. We're in the midst of a modification so once we find out about that we'll see.

[mylife]

Update. I finally spoke with my attorney about this option of not including my commission and was advised that he did not want to open that can of worms yet, he wanted to keep it as an ace in the hole for when we go to court. But, he does not see our payment going down, he wants to prove why it should not increase. This I do not understand when my husband's income is about $600 less per month now than when we filed. How can he say my income increased, due to the commission, by $800 per month when neither the amount nor frequency increased? He's supposed to call me Monday to discuss but does this make any sense? In looking at income is it more involved than what we're doing by just looking at our ytd earnings?

[lrprn]

In looking at income is it more involved than what we're doing by just looking at our ytd earnings?

It can be. The lookback for six months to calculate "income" can include many types of income (from http://www.mwortmanlaw.com/chapter7-means-test.htm):
- Gross (before tax and deductions) wages, salary, tips bonuses, overtime, and commissions (my emphasis)
- Business income (net of expenses)
- Rental and other real property income
- Interest, dividends, and royalties
- Pension and retirement income
- Any amount paid by another person for the household expenses of the debtor, including child or spousal support
- Unemployment compensation that is not a social security benefit
- Any other income" as defined by your local court and/or other case law decisions in other districts around income

Note the first bullet point includes commissions. This is why working with your lawyer to figure out how your commission is going to count *in your local court* matters so much. Recent case law decisions are pointing courts toward not counting temporary income like commisions and bonuses when calculating total income for the Means Test, but some courts still count them.

[karm43]

If your having a baby, you could probaly remodify the plan. Your allowance will be bigger. Just have to stick it out until Mar.

[mylife]

As far as modifying the plan the atty said no. They will not allow us to skip any payments, make lower payments or modify because the unsecureds are already getting very little. We'll basically have to deal with it.

I live in MD and I don't know if it's the ttee or atty who is being most difficult.

[IamOld]

I'm so sorry to hear that mylife...but like karm43 said - once you have the baby you have an additional person so would that allow you to change your plan by definition???

[Pandora]

As far as modifying the plan the atty said no. They will not allow us to skip any payments, make lower payments or modify because the unsecureds are already getting very little. We'll basically have to deal with it.

This bothers me immensely - under what law are they saying your plan cannot be modified due to "unsecureds getting very little" ? There are Ch. 13 plans that have 0% being paid to unsecured creditors, moreover BK law specifically states otherwise:

Section 1329: http://www.law.cornell.edu/uscode/us...9----000-.html

To me, this sounds like your attorney just doesnt want to actually do his/her job...