Groundbreaking (?) 341 Meeting Soon

[ramone]

First, a thank you to all that post on this board. Your advice turned my life around.

My 341 meeting is in 10 days. My lawyer made some comments at our appointment yesterday that has me concerned. He thinks that our case will be somewhat "ground breaking" in that our income is rather high but our proposed payment is quite low. We actually fit the means test to file for a chapter 7 but he thought that the district bankruptcy court may challenge a chapter 7 in our case because of the new laws that allow for a challenge based upon "sunstantial abuse" of the system. I make about $130,000 annually but pay almost $46,000 annually in first & second mortgages and a time share mortgage (we owe several thousand more on the timeshare than it is worth). I also pay roughly $5,000 annually on a vehicle. Through in taxes, ssi, supporting a family of four, maintaining a home and vehicles, medical costs, etc and that doesn't leave much left to pay into the plan. Our proposed payment is $300 monthly on a roughly $90,000 case.

Our lawyer hasn't really expressed much concern about our plan until our last meeting. So, I'm getting pretty tense about this meeting.... I understand that there is negotiating back and forth but he left me with the impression that he didn't have much bargaining power in this case. I thought that we did the right thing by going for a chapter 13 but am having second thoughts about that now. We really don't have that much room left to negotiate. Time will tell...

Thanks again all....

[aa06a47]

It appears your lawyer is getting cold feet on it as well. Best thing for you to do is go through the petition and take proof of your expenses to the 341 meeting with you. They may ask specifics...and if you can pull the information out, they may let it go. There is nothing in the new law that says you can't owe an expensive car. The judge / trustee may frown on them, but legally, I don't think there is nothing that say's they can make you down size. Good luck with it, and don't lose any sleep over it (easy to say, I already lost sleep before my 341 meeting). The 341 won't be adversarial in nature, so don't worry about it. It is the negotiations after the fact you need to watch carefully, and don't believe your attorney saying they don't have any bargaining power if you can prove the expenses!!!

[bobby125]

ramone, I think you are going to be fine......

My case was for $90,000 in credit cards

My wife and I earned just under $100,000 last year ($85,000 to me)

My payment is $743 (almost confirmed, dont jinx it!) and that includes my car payment of $350, so really my payment is just under $400

It doesnt sound groundbreaking to me (and I dont mean that to be offensive, sometimes things that are typed dont come across how they are suppossed to mean)

I also have 2 children, and my mortgages are $2100 on my primary and $1300 on a rental, and another $800 on an additional rental (but that is in my wifes name)

I even had another rental where I was actually losing $200 a month on and that I owed more than it was worth

***I decided to give that rental back, which I would like to inquire that if that timeshare is a bad deal, then you should be able to give it back****

??Can I ask, is that an option for you?


It truly is amazing, but if you get a good lawyer and come up with a bunch of expenses (my wife is in real estate, so a lot of write offs) you can come off with a lower payment

Heck, I was losing $200 on that property and paying $350 to my car and now I am paying $743 so it is only about $200 net out of my pocket

Now, it does kill your credit, but if you are set up on your house and cars then that is a small price to pay


Let me know about the timeshare, I am interested to know, I am almost posititive you can add that to the 341

And you know what is even crazier???

If you are say, losing $200 or paying $200 a month for the timeshare....and you decide to add it to the list of creditors and give it back

THEY STILL CALCULATE THE $200 LOSS ON THE MEANS TEST, SO YOUR PAYMENT WOULD NOT GO UP THAT $200

LIKE THEY FIGURED MY PAYMENT LOSING THE $200 ON THE RENTAL, AND I WONT BE LOSING IT ANYMORE BC I NO LONGER OWN IT....?!?!?!?

[bobby125]

get rid of that timeshare

now is your best chance

otherwise you will pay it for 5 years and probably wont make it back anyways

just dump it now.....

your payment is scheduled to be $300 and you pay $5000 annually (what, $400 a month) so that is $700 total

you will be fine

oh, btw, you will have objections to deal with, but your lawyer will handle those as well

look at me, I am probably gonna get my payment raised before it confirms now!

[lrprn]

It appears your lawyer is getting cold feet on it as well. Best thing for you to do is go through the petition and take proof of your expenses to the 341 meeting with you. They may ask specifics...and if you can pull the information out, they may let it go. There is nothing in the new law that says you can't owe an expensive car. The judge / trustee may frown on them, but legally, I don't think there is nothing that say's they can make you down size. Good luck with it, and don't lose any sleep over it (easy to say, I already lost sleep before my 341 meeting). The 341 won't be adversarial in nature, so don't worry about it. It is the negotiations after the fact you need to watch carefully, and don't believe your attorney saying they don't have any bargaining power if you can prove the expenses!!!

Agree with aa. I would also go over your forms sitting at your lawyer's side line by line asking him if what you have listed for assets, living expenses, and monthly payments have been accepted by your trustee as reasonable for your community for other Ch 13 filers in your district. In a "ground-breaking" case with far-above-median income and a relatively low monthly payment like yours, the trustee is very likely to be looking at everything with a fine-tooth comb. Good luck - please keep us posted on what happens!

[ramone]

Thanks for your replies. I'm on the fence about the timeshare. We do own more than it is worth and we probably won't be able to use it for a while due to not being able to afford airfare, etc. But, if were to let it go, it would be a foreclosure and, despite the BK, I really would like to avoid that on our credit. Not to mention, since most our debt is only in my name, I am the only one who has filed for BK-- my wife has not and the timeshare is in both of our names.

I'm also wondering about our home equity line of credit. Our LOC is such that we are only required to pay interest so our "minimum payment" listed on loan statements is misleading. Our budget calls for us to pay ~$250 more than the minimum so that we can at least pay some principal. Do you think the trustee will allow that? In retrospect, I wonder if we should have made that amount higher on our budget- especially if interest rates were to rise (it is a variable rate LOC).

[lrprn]

Thanks for your replies. I'm on the fence about the timeshare. We do own more than it is worth and we probably won't be able to use it for a while due to not being able to afford airfare, etc. But, if were to let it go, it would be a foreclosure and, despite the BK, I really would like to avoid that on our credit. Not to mention, since most our debt is only in my name, I am the only one who has filed for BK-- my wife has not and the timeshare is in both of our names.

I'm also wondering about our home equity line of credit. Our LOC is such that we are only required to pay interest so our "minimum payment" listed on loan statements is misleading. Our budget calls for us to pay ~$250 more than the minimum so that we can at least pay some principal. Do you think the trustee will allow that? In retrospect, I wonder if we should have made that amount higher on our budget- especially if interest rates were to rise (it is a variable rate LOC).

Ramone, I noticed you said "most" of the family debt is in your name. Be certain that every debt you place in your bk is in your name only, because if any have her name on it as well, the creditors will go after your wife for the money owed on that debt and they will be ruthless and relentless.

About giving up your timeshare - there's varying opinions about whether having a foreclosure AND a bankruptcy on your credit record is worse than having just the bankruptcy. Again, this depends on your local community and how the lenders there see both.

We don't know the details of your circumstances, Ramone, and whether you can wait to file or not. If you are upside on the timeshare anyway, have you asked your attorney about the possibility of trying to sell it and wait 6 months to file?

Another thing to think about - you said you are upside down on the timeshare and aren't likely to visit it in the next few years anyway. You are filing bk to get a fresh start, but at least one of the assets you have now is bleeding you - the timeshare - because what you owe is more than it's worth and I assume what you will be paying will continue after your bk is discharged. As hard as it is, think hard about whether it's time to lighten your family's financial responsibilities and let it go. Others have survived and after a few years thrived having both a bk and a foreclosure on their credit records - you can too.

Best of luck and please keep us posted on how your case goes. We're here for questions or support any time!