Terrible News .....

[bkadvisor]

On another thread in a different sub-forum I made the statement:

The bankruptcy laws are working in the creditors favor right now due to the over median income earners having to wait out the 6 month historical income meanies testing in order to be eligile for a Chapter 7.

A regular poster replied

This isn't correct. MAny on this site are over the median and filing chapter 7's. The means test is only part one. You still must fill out schedules I and J to determine if you have disposable income to fund a Chapter 13.
In post #4 in this thread I provided a copy and paste of a recent articles showing Chapter 7 filings as a percent of bk filings is about the same today as it was prior to reform

Not EVERY over median debtor can pass the means test. Statistically the over medians with the highest secured debt passes more often than the over median with a preponderance of unsecured debt.

If one studies the means test this becomes obvious when you note the line items where you can plug in actual expenses i.e. car pmts and mortgage pmts. Therefore an over median with two high car pmts will have higher allowed expenses than their counterparts with low or no car pmts.

Additionally the majority of Circuits do not use the I & J schedules to determine disposable income. This has been the subject of much litigation throughout the Circuits, though. The majority opinions basically opined Congress in their extreme wisdom (rolling eyes here) devised the crazy means test to determine disposable income.....so therefore they can't have it both ways. If an over the median passes the means test yet shows excess income on their I & J....case law in the Circuits have opined the 'means test' rules.

The OP in this thread is the unfortunate over median with high unsecured debt and relatively low secured debt. This is the group that suffers from using historical numbers that have no basis in their present financial realities. They must wait out the numbers in order to be eligible for a 7.

Subsequently the relevant questions in a case such as this are how much debt is secured vs unsecured. If a case by case analysis was done it would show the over median bk filer with higher amounts of secured debt can pass the very unfair means test on a higher statistical basis thereby qualifying for a 7.

One suggestion I might have missed is a 13 filed then convert to a 7. This strategy would only be advisable if the debtors needed time to become eligible for a 7 PLUS desired to save a non-exempt large asset such as a home or even in some cases their cars.

The best advice I can give is to pay only those bills that are necessities. Don't fret over what you can't control. Make a budget and keep it dynamic...the more flexible the better. Remember your health and welfare and that of your loved ones come first. Lastly, you are not alone in this economy. I wish you all the best.

GL!

[debtmonster]

You need to do the whole means test bankruptcy form b22a and see if your monthly disposable income is more than 10,000 plus / 60 (I'm not sure what the current number is). You can do it at www.legalconsumer.com at no charge!

I did that already. But since I have stopped paying so many bills, I am losing what I can include as my bills now.

Lately I've paid no rent/mortgage and only 1 car payment. My bills are next to nothing, but that's only temporary, but that's not how the court looks at it.

According to them, I'd have a TON of disposable income.

Every month I have something that's new and different from the last. It could be a $250 home repair this month or a $250 visit to the vet the next, or a $250 car repair the next. They won't take "$250 misc".

I'd just rather have no means test at all and just let them let me file Ch. 7 like people were doing prior to October 2005.

[ben1381]

You need to do the whole means test bankruptcy form b22a and see if your monthly disposable income is more than 10,000 plus / 60 (I'm not sure what the current number is). You can do it at www.legalconsumer.com at no charge!

[debtmonster]

Several people have suggested the answer - talk to another Attorney - maybe several. - jb

I wish I had the option to talking to "several". Virtually everyone I tried said, "We don't do the means test. You need to make under the means for Florida or we can't help you."

The attorney I have now charged me an extra $500 for the means test paperwork. I hope they pass that law to eliminate the means test. What it is, the S-257 or something?

[jeb]

Laidoff, sounds like you have found one of those, "take the easy, quick stuff and dodge the hard, longer stuff" type Attorneys.

Several people have suggested the answer - talk to another Attorney - maybe several. - jb

[debtmonster]

Okay, if I can manage to stay here for 12 to 24 months, that should give me plenty of time to get my bankruptcy started in July and hopefully discharged by October. If I can manage to stay here until at least February or March of 2010, that should give me plenty of time to have at least $3,000 in my bank account to enable me to hire movers or a U-Haul truck to get out of this place. The thing is, if this "final judgement" shows up in the next 90 days, I will be screwed. That won't enable me enough time to stockpile cash.

There's no way to get them to speed up the process? Why does all of this take so long? Why can't they speed it up to get people out of the homes faster?

[StartingOver08]

Right!

[debtmonster]

Okay, so when they actually sell the house, I won't be here at that point, right?

I also have a homestead exemption on the house. Won't that make it take even longer to process or does that not even matter?

So the key is to keep checking the records and keep looking for the words "Final judgment"? So when I see those words, I know it's time to start calling moving companies, right?

[StartingOver08]

Usually very few people today actually buy the house on the "courthouse steps". What is typical today is the lender wins the bid - and the house goes into the bank inventory (REO property). REO = Real Estate Owned.

The bank then has a property preservation dept to phycially send someone out to look at the property, change the locks etc. The asset manager hires an agent to sell the property. This takes quite a while just getting through the banks depts. Naturally you want to be out before the bank sends someone out to change the lock.

Doesn't really matter who the lender actually is - you still have about 30 days from the date of final judgement.

Yes, people want to see the house before they bid. The bank wants to foreclose on the property and take it into ownership for two reasons (that I know of): 1) they clear off the jr liens by going all the way through foreclosure and 2) the bank collects on the mtg insurance by having a foreclosure. The mtg insurance is substantial, usually anywhere from 19% to 35% of the original mtg balance. If the loan was originated after 2000, there is mtg insurance (either lender paid or borrower paid, no matter the LTV). So now the bank has the asset (property) and the mtg insurance to mitigate the loss.

[debtmonster]

Good question debtmonster. Except there seem to be only 3 or 4 attorney's around the entire state of FL that are handling the foreclosure actions for the main mortgage servicers.

One of the largest is in the Tampa area - and they are extremely unorganized. Once you get your NOD you will know 1) who the attorney is and 2) who the actual lender is for your loan. There are no guarantees for timelines - that's why you want to monitor it in your county.

Yes, it will say Final Judgement in the public records.

I already got served in February. That's how I am seeing all of this court information showing up. I got the attorney's info. Their attorney is in Tampa.

Does it matter who the lender is or does it still take a long time for me to have to move out no matter who the lender is?

I am wondering how this will all go about. If my balance on my two mortgages is about $140,000, will they settle for a sale price of $80,000 or less from somebody else? Also, who are these people offering the money? Are these usually private individuals or just rich multi-millionaire investors who have no intentions in even living in the houses they buy?

I would think people would want to come by and look at the condition of the house first before making an offer. They have no idea if the place is trashed or not. Plus I live so far out in the boonies, it's disgusting.

[StartingOver08]

Good question debtmonster. Except there seem to be only 3 or 4 attorney's around the entire state of FL that are handling the foreclosure actions for the main mortgage servicers.

One of the largest is in the Tampa area - and they are extremely unorganized. Once you get your NOD you will know 1) who the attorney is and 2) who the actual lender is for your loan. There are no guarantees for timelines - that's why you want to monitor it in your county.

Yes, it will say Final Judgement in the public records.

[reallybroke]

Father, I pray your peace on all of us who are facing hardships and trouble in this season of our lives. I pray for your grace and mercy and most of all your peace so that we can get through these tough times. Father cover our minds and hearts so that we do not "go crazy" with worry over things that are out of our control. Thank you for loving us through this even though we sometimes don't love ourselves and we allow others opinions of us to overrule what you think of us. Keep us Lord, guide us and direct us, show us the way. AMEN

Hearts

myhearts07..what a sweet prayer and a great way to start the morning

[debtmonster]

Debtmonster - you have a long time to go - you are in Fl and we are really backed up with the foreclosures.

So far it has been 10 months for me and my attorney thinks I have at least until July to move. He says do not move until the final judgement and if they were to get a court date today, the earliest it could be heard is June and then I have 30 days to move at that point. Check with your BK attorney - if he's good he will know what the 'new' timeline is (since the foreclosure deluge).

Yeah, but doesn't it matter which court house in what county and not necessarily the state? If I live in a county with much less people, won't they be able to get through it faster than say Miami or Ft. Lauderdale?

What is the indicator I will see in the court records? Will it say the words, "Final Judgment" there or will there be something else?

I just want to know that we have thousands of dollars sitting in the bank at any given time when this time ever comes. I never want to be unprepared.

[myhearts07]

Father, I pray your peace on all of us who are facing hardships and trouble in this season of our lives. I pray for your grace and mercy and most of all your peace so that we can get through these tough times. Father cover our minds and hearts so that we do not "go crazy" with worry over things that are out of our control. Thank you for loving us through this even though we sometimes don't love ourselves and we allow others opinions of us to overrule what you think of us. Keep us Lord, guide us and direct us, show us the way. AMEN

Hearts

[StartingOver08]

Debtmonster - you have a long time to go - you are in Fl and we are really backed up with the foreclosures.

So far it has been 10 months for me and my attorney thinks I have at least until July to move. He says do not move until the final judgement and if they were to get a court date today, the earliest it could be heard is June and then I have 30 days to move at that point. Check with your BK attorney - if he's good he will know what the 'new' timeline is (since the foreclosure deluge).