Bad, bad, bad news

[Kingxray]

Hi all,

Thanks for all your responses in my previous threads. UST filed a presumption of abuse in our case after our 341 (unfortunatly I found this site after that). I checked Pacer today and they filed a motion to dismiss pursuant to 707! I can't talk to my lawyer until Friday afternoon so we are freaking out.

I printed the document and this is what their problem with my case is:

1. Ownership and operating expenses for vehicles. Lawyer said we are allowed 2 cars. We only have one, hubby's company owns and pays for his vehicle (but that could change at anytime). They are allowing one car and reduce our deduction for that car by more than $200.
2. Mandatory payroll deduction for a 401K loan. Some BK court in WI has held that 401K loan is not a mandatory payroll deduction, so they removed $544 payroll deduction (BTW this is mandatory deduction taken out my husbands check each pay period)
3. To date the debtors have not come forward with any evidence to rebut the presumption of abuse. (I supplied everything the UST asked for)
4. In re Lamanna (a. does debtor have stable source of income, b. is debtor eligible for C13, c. can debtors budget be reduce) They said yes to all in our case. And they disallowed our second home on the means test becaus we are surrendering it.

They said we could pay our debts under C13 36 mos listed a plan (which I cannot make sense of)

At the end it asks that the case be dismissed and grant such other relief that the court deems just.

They redid our means test and are entering it as exhibit 1 and you bet we did not pass when they took away our second home, utiliities on that home and our 401K loan.

What are our options here? Are they pushing us into 13 or booting us all together? What are some of the things that can happen now? I wish I didn't not have to wait until Friday to hear from the lawyer. I am sooooo freakin! I could just be sick.

[blankslate]

I am so sorry to hear this. I'm going through a little nightmare of my own (case closed without discharge) on what should be a VERY simple no asset ch 7.

I have no advice for you but we're all here for you.

[2Stressed]

wisconsin dude checkn in, good luck

[Help!]

Hi all,

Thanks for all your responses in my previous threads. UST filed a presumption of abuse in our case after our 341 (unfortunatly I found this site after that). I checked Pacer today and they filed a motion to dismiss pursuant to 707! I can't talk to my lawyer until Friday afternoon so we are freaking out.

I printed the document and this is what their problem with my case is:

1. Ownership and operating expenses for vehicles. Lawyer said we are allowed 2 cars. We only have one, hubby's company owns and pays for his vehicle (but that could change at anytime). They are allowing one car and reduce our deduction for that car by more than $200.
2. Mandatory payroll deduction for a 401K loan. Some BK court in WI has held that 401K loan is not a mandatory payroll deduction, so they removed $544 payroll deduction (BTW this is mandatory deduction taken out my husbands check each pay period)
3. To date the debtors have not come forward with any evidence to rebut the presumption of abuse. (I supplied everything the UST asked for)
4. In re Lamanna (a. does debtor have stable source of income, b. is debtor eligible for C13, c. can debtors budget be reduce) They said yes to all in our case. And they disallowed our second home on the means test becaus we are surrendering it.

They said we could pay our debts under C13 36 mos listed a plan (which I cannot make sense of)

At the end it asks that the case be dismissed and grant such other relief that the court deems just.

They redid our means test and are entering it as exhibit 1 and you bet we did not pass when they took away our second home, utiliities on that home and our 401K loan.

What are our options here? Are they pushing us into 13 or booting us all together? What are some of the things that can happen now? I wish I didn't not have to wait until Friday to hear from the lawyer. I am sooooo freakin! I could just be sick.

Your options are to (1) convert to 13 and accept the 36 month repayment plan - not so bad considering most above median debtors have to pay for 60 months or (2) go into litigation to challenge the UST's motion to dismiss - unlikely to go well as there is plenty of case law supporting the UST's modifications of your means test, especially the second home. You are only entitled to expenses which are "reasonably necessary" to live.

In my opinion, unless you have some other expenses (medical, dental, childcare, anything?) that can offset the income the UST added in it sounds to me as though you're headed for Ch. 13.

And, I'm sorry - that really is lousy news. Life is going to change in a very big way for you, but try to think positive. Is the worst case scenario really the end of the world, or is it better than being slowly suffocated by debt?

[jessegirl]

Hi all,

Thanks for all your responses in my previous threads. UST filed a presumption of abuse in our case after our 341 (unfortunatly I found this site after that). I checked Pacer today and they filed a motion to dismiss pursuant to 707! I can't talk to my lawyer until Friday afternoon so we are freaking out.

I printed the document and this is what their problem with my case is:

1. Ownership and operating expenses for vehicles. Lawyer said we are allowed 2 cars. We only have one, hubby's company owns and pays for his vehicle (but that could change at anytime). They are allowing one car and reduce our deduction for that car by more than $200.
2. Mandatory payroll deduction for a 401K loan. Some BK court in WI has held that 401K loan is not a mandatory payroll deduction, so they removed $544 payroll deduction (BTW this is mandatory deduction taken out my husbands check each pay period)
3. To date the debtors have not come forward with any evidence to rebut the presumption of abuse. (I supplied everything the UST asked for)
4. In re Lamanna (a. does debtor have stable source of income, b. is debtor eligible for C13, c. can debtors budget be reduce) They said yes to all in our case. And they disallowed our second home on the means test becaus we are surrendering it.

They said we could pay our debts under C13 36 mos listed a plan (which I cannot make sense of)

At the end it asks that the case be dismissed and grant such other relief that the court deems just.

They redid our means test and are entering it as exhibit 1 and you bet we did not pass when they took away our second home, utiliities on that home and our 401K loan.

What are our options here? Are they pushing us into 13 or booting us all together? What are some of the things that can happen now? I wish I didn't not have to wait until Friday to hear from the lawyer. I am sooooo freakin! I could just be sick.

I am so so sorry to here this. I have ALOT of problems to with the UST... I am sure you have read them.

Does your attorney have a paralegal that you can talk to?

Don't just freak out yet, if you complied with all the information that the trustee requested to back up your BK7, then why would he put you in a chapter 13? or dismiss? Your attorney needs to fight for you now.

I truly wish you luck...

[Kingxray]

Thanks again. I'm dying here. Paralegal isn't in until Sat but can talk to lawyer Fri.

Can I let the case dismiss and refile?

Why would my lawyer (or his staff) include things on the means test if he knows they won't allow them? He said we should be allowed the deduction for a second car.

Also the only reason we have a second home is because we moved and couldn't sell the first home. That was the home we were going to surrender that has the equity in it to pay our creditors. Why wouldn't the trustee want that?

In C13 plan it listed both 36 and 60 months but it suggested 36. I don't get how much they want. Maybe someone on here can help me figure out these figures? Also on C13 will they take our tax refund, husbands bonuses, etc.? Do they garnish his wages or do we pay the trustee ourselves? Do we still surrender our second home or just foreclose? Too bad about all that equity.

Too bad about this whole thing. I'm just sick about it and blame my dad for putting us through all this grief.

[biotechsolution]

Your best bet is probably converting to the 13 if you are above the median income. Because if you dismiss and refile again later you will be still in the same boat because your expenses will not have increased.

Perhaps your attorney knew the 13 was in the works the whole time.

[Help!]

Thanks again. I'm dying here. Paralegal isn't in until Sat but can talk to lawyer Fri.

Can I let the case dismiss and refile?

Why would my lawyer (or his staff) include things on the means test if he knows they won't allow them? He said we should be allowed the deduction for a second car.

Also the only reason we have a second home is because we moved and couldn't sell the first home. That was the home we were going to surrender that has the equity in it to pay our creditors. Why wouldn't the trustee want that?

In C13 plan it listed both 36 and 60 months but it suggested 36. I don't get how much they want. Maybe someone on here can help me figure out these figures? Also on C13 will they take our tax refund, husbands bonuses, etc.? Do they garnish his wages or do we pay the trustee ourselves? Do we still surrender our second home or just foreclose? Too bad about all that equity.

Too bad about this whole thing. I'm just sick about it and blame my dad for putting us through all this grief.

Your lawyer did exactly what mine did - he included expenses that were in grey areas, knowing they could be challenged but hoping they would not be.

Unless your income is much lower now than it was on your means test, I think refiling can be prolonging the inevitable and can make things worse. I watched the couple ahead of us in court in this position go through absolute hell at two 341 hearings (even worse than our hell) and they ended up in a 13 anyway. To make matters worse, they're going through their 13 with the trustee and UST suspicious and aggressive. It is a much worse situation than if they had converted the first time they filed.

To try to answer your questions:

(1) The repayment plan is negotiated between your attorney and the UST - your attorney calls the UST and indicates that you will be filing a motion to convert. The UST will either suggest to your attorney what they feel is a reasonable payment or will wait and see what your attorney files for a repayment plan.

(2) There is no way of predicting what you will be allowed to keep and what assets you will have to surrender. It depends on the trustee. Tax refund will likely be a goner.

[Kingxray]

Those expenses that they disallowed should be allowed. They allow them for other people, 401K loan and 2nd car.

Lawyer wants us in a 7 (so he says). Our other home has equity in it that can be used to pay our creditors and should also be included in our means test IMO.

[arkienurse]

Those expenses that they disallowed should be allowed. They allow them for other people, 401K loan and 2nd car.

I believe others here have been allowed 401k loan paybacks, I would really be wanting to fight that one.
But just because you are allowed to have a car for each adult I don't think it should not entitle you to take the deduction for one that you don't have.

[Kingxray]

Your lawyer did exactly what mine did - he included expenses that were in grey areas, knowing they could be challenged but hoping they would not be.

Unless your income is much lower now than it was on your means test, I think refiling can be prolonging the inevitable and can make things worse. I watched the couple ahead of us in court in this position go through absolute hell at two 341 hearings (even worse than our hell) and they ended up in a 13 anyway. To make matters worse, they're going through their 13 with the trustee and UST suspicious and aggressive. It is a much worse situation than if they had converted the first time they filed.

To try to answer your questions:

(1) The repayment plan is negotiated between your attorney and the UST - your attorney calls the UST and indicates that you will be filing a motion to convert. The UST will either suggest to your attorney what they feel is a reasonable payment or will wait and see what your attorney files for a repayment plan.

(2) There is no way of predicting what you will be allowed to keep and what assets you will have to surrender. It depends on the trustee. Tax refund will likely be a goner.

Thanks Help. Sounds like we are screwed. I guess my lawyer will fill me in on Friday.

[Kingxray]

Oops, one more thing Help. Can we rebut the presumption of abuse at this point? Thx.

I agree arkienurse, the 401K loan should be allowed and that is what is putting us over the means, otherwise we would be okay.

[catleg]

I think your problem is you filed too soon and appeared to have assets and ability to pay. Might have been better to let the lender foreclose on the first house, meanwhile buy another car on credit (how do they know the job provides a car right?) I feel your pain, chin up and keep fighting!

[Help!]

I think the 401K contribution is something fightable, the second home is not. To make the 401K argument, you'd have to pay your attorney to prepare a brief and argue your case to the judge. If the 401K was the only issue, I'd say go for it. Litigation is expensive, though. The only possibility of a Ch. 7 that I see is to volunteer to surrender assets. I'm not trying to be negative at all, just giving my opinion. You could try starting a thread "Has anyone won a case in litigation against UST 707(b) dismissal?" and see what the response is. I've been around the forum about 9 months and I recall only one case in which the debtor and UST went into litigation - Yankeegirl - and the judge sided with the UST.