Our 341 Meeting Outcome

[lrprn]

We had our 341 meeting this morning - here's a summary of what we were asked - overall a good outcome, but some of it not so good...

* We were asked the usual opening questions - did we move after we filed, asked for our driver's licenses and SS cards and they matched

* Someone at the trustee's office had already gone through our Ch 13 plan and made notes which the trustee used to ask specific questions the rest of the meeting

*The bad news - our schedule I and J figures didn't match, so there's a chance our current $950 monthly payment may go up to $1250 (OUCH!) Our lawyer is seriously contemplating filing a brief about this because there has been no official ruling in our district about "prior 6 months income vs. future income" yet. That means we could become the local test case if we are willing. Nice thing is that our lawyer said he won't charge us any extra for all the additional legal work because he would like this problem settled once and for all in our KS bk district - it's becoming quite the issue in Ch 13 cases. Don't know whether we're willing do that or not - we'll need to consider this very carefully. Until a final decision is made by our trustee (or the judge if we decide to become a test case), we keep paying the current $950/month unless we hear otherwise.

*Why are your monthly medical costs so high ($550/month)? (answer: husband is an insulin-dependent diabetic, I have several long-term chronic illnesses that require regular medications and doctor visits. Also our lawyer threw in that I was hospitalized right after filing (trustee was briefly sympathetic about that) - trustee moved on without further comment

*Asked about the six loans my husband took out of his retirement - clarified some questions about those and that we are indeed paying the six loans back outside our plan

*Asked why we had three cars in our plan - explained our daughter still lives at home with us. How old is she? Answer: 22. Is she in school full-time? Answer: yes. Asked us if she contributes to the household - said she gives us $150/mo and it's included in our plan income. Then trustee asked us in a joking way how she ended up with the best car of the three . No challenge made to keeping all three cars (whew! dodged that bullet!)

Overall both hubby and I felt it could have been much worse. There was a case ahead of ours that was a total disaster. The couple was filing personal Ch 13 but lots of their expenses were mixed up with a business they had on the side that went under in April. A creditor and his lawyer were there because a major advance from the creditor (like $15,000) had been left off the creditor's list and wasn't mentioned at all in their plan! There were all kinds of complications with leased equipment left in a leased warehouse, warehouse owner changed locks, petitioner still had private belongings in the warehouse - what a mess! After hearing that couple being grilled by both trustee and the creditor's lawyer for 30 MINUTES topped off with the trustee speaking sternly to their lawyer about doing such a shoddy job on their plan, our 10 minute 341 felt like a walk in the park! I'm so glad it's over - on to the next bk milestone, the confirmation meeting.

[aa06a47]

What a feeling to have it over with. Sounds like there are objections in your case concerning income and your payment. Your attorney should read other ruling from other courts on the past 6 month vs future 6 months. It has already been decided future income does come in to play, not just past income. Of course, it may not have been decided yet in KS on how to handle it. I would assume the test case will make you end up with the 1250 payment.

When you check pacer, don't freak out when you see "trustee recommends to deny confirmation". It will say that pretty soon until the trustee and your attorney iron out a payment plan. If I were you, and you can swing it, it would be best to work something out between the 1250 he wants and the 950 your currently paying. From what I'm told, the trustee doesn't want to take a case to the judge and I'm surprised your attorney does.

[anonymuse]

*The bad news - our schedule I and J figures didn't match, so there's a chance our current $950 monthly payment may go up to $1250 (OUCH!) Our lawyer is seriously contemplating filing a brief about this because there has been no official ruling in our district about "prior 6 months income vs. future income" yet. That means we could become the local test case if we are willing. Nice thing is that our lawyer said he won't charge us any extra for all the additional legal work because he would like this problem settled once and for all in our KS bk district - it's becoming quite the issue in Ch 13 cases. Don't know whether we're willing do that or not - we'll need to consider this very carefully. Until a final decision is made by our trustee (or the judge if we decide to become a test case), we keep paying the current $950/month unless we hear otherwise.

Sorry to say this, but I've read plenty on this for other districts and it is looking forward, not looking back. I don't think I've seen any ruling go towards the CMI. The BK laws definitions and code are so poorly written that it contradicts itself all over the place, but what I've always read in the rulings was the intent of the law supercedes the lack of clarity of the definition. (Well, dang it, amend the code and fix it!)

If the median is $40K and someone was out of work for 4 of the past 6 months, they could conceivably file Ch 7 even if they made around $10K/month for the last 2 months. They'd be at a salary of $120K a year, but if you only look at the CMI, they're at the median income.

That's an extreme case, but that's the kind of examples they have used to defend looking forward. I'll do some homework tonight and find some stuff for you to read on it.

[lrprn]

Thanks for the advice about PACER, aa - excellent as usual!

Our lawyer is well aware of the six case law instances around the country ruled on this year regarding "prior vs future income" because we talked about them together long before our meeting today. He warned us ahead of time that our trustee would mention the difference between our I and J totals and was likely to want to raise our payment - he was right. There's a big disagreement between our Ch 13 trustee and our local bk lawyers about what to do with this issue in our district - the judge hasn't had an opportunity to make a ruling on it yet and our lawyer thinks he would jump at the chance to do it and it could well be in our favor keeping the $950 payment. If we decide not to go to court, then our lawyer wants to go through our plan carefully looking for extras that may have been left off accidentally plus he's going to pitch the new need to pay back the hospital and doctor bills from my recent hospitalization that happened after we filed. (btw, I got the figures for just the hospital portion yesterday - over $20,000 before insurance. Who knows how much the doctors' bills are going to be and there are ongoing follow up office visits happening even now. Should end up a tidy sum we will owe after insurance pays which we will have to pay in addition to our plan. Getting complicated for sure.

Personally I'm apprehensive having our case examined with a fine-tooth comb by the courts. Everything related to our bankruptcy is absolutely on the up and up - I used a year of our real downsized expenses to calculate our plan figures, got a realtor estimate for the value of our house, etc. - but I'm afraid it will be like when you get picked at random to be audited by the IRS. Who knows what they might find, and if they do find something, it doesn't matter that you made a mistake by accident because you didn't understand the rules. Have to think long and hard about this one....the current bk rules are like the shifting sands after last October.

[lrprn]

Sorry to say this, but I've read plenty on this for other districts and it is looking forward, not looking back. I don't think I've seen any ruling go towards the CMI. The BK laws definitions and code are so poorly written that it contradicts itself all over the place, but what I've always read in the rulings was the intent of the law supercedes the lack of clarity of the definition. (Well, dang it, amend the code and fix it!)

Thanks for the assist, Anon - appreciate all the help!

Our lawyer is well aware of the six recent case law instances around the country on this topic and that they aren't in our favor. We've talked about these already (see my response below).

Right now I'm leaning toward us not becoming a test case and pursuing amending our plan to include my recent hospitalization costs as costs that now must be paid and are not currently accounted for in our plan since they occurred after filing. These new payments will reduce our currently calculated disposable income somewhat which will then reduce the $1250 proposed payment that was calculated on future income. Am going to let the dust settle for a few days, then will get back with our lawyer to strategize further. (I just KNEW there was a reason to be worried, darn it anyway! )

[anonymuse]

It would be nice to have it settled--in your favor (for you and the rest of the BK filers); however, I can see how you might not want to be a guinea pig under the microscope! It's not like this lawyer won't see a case like this again.