Attorney pushing for a Chapter 13 instead of 7 !! Need advise!!

[kcfaninin]

His paralegal is working on that as of Tuesday? A B22C takes an hour or so, and why is his paralegal doing it? I don't think you qualify for Chapter 7, but until the B22C is done who can know.

I think you need a new attorney.

What is a B22C? The paralegal was going to plug the numbers in the schedule I & J and attorney was going to review them.

I do have question that maybe you can answer. Everyone is saying that we don't qualify for a Chapter 7. How would we fund a 13 if we have negative disposable income? Even the paralegal shows we have negative disposable income, but we don't pass the means test.

Also, if everyone is saying we won't qualify for a 7, why are they telling me to get a new attorney?

[JimKutkowski]

We have paid him $500 so far. At our meeting he kept talking about a Chapter 13 but, said he needs to "plug in the figures" His paralegal is supposedly working on that as of Tuesday. I was upset becasue he is the one that had us dismiss our 13 and quit our second jobs. We are now worse off because we are making less money and are having trouble just paying our living expenses. Our plan was to eventually pick up more hours after we were discharged to have a little exta income coming in.

His paralegal is working on that as of Tuesday? A B22C takes an hour or so, and why is his paralegal doing it? I don't think you qualify for Chapter 7, but until the B22C is done who can know.

I think you need a new attorney.

[maddog2112]

Hey Kc, Pm me. Maddog

[OhioFiler]

The insurance that is paid with our mortgage is for the dwelling itself if it burns down or something. The insurance paid through State Farm is for its contents and if someone gets hurt on our property, things like that.

I think you're going to have a difficult time with some of your expenses. As a high income filer you can expect the UST to get involved. I assume the gross income exceeds $100,000 annually if you net $7,100.

[kcfaninin]

$561 per month for insurance? You say the insurance on the home is included in the mortgage payment and in the $561.

The insurance that is paid with our mortgage is for the dwelling itself if it burns down or something. The insurance paid through State Farm is for its contents and if someone gets hurt on our property, things like that.

[OhioFiler]

$561 per month for insurance? You say the insurance on the home is included in the mortgage payment and in the $561.

[kcfaninin]

The $925 is for 3 car payments. Two of those are leased vehicles and we would be way upside down if we trade. Would cost us more in the long run. The other car is our daughters and we owe more then what it is worth. So, we can't do anything about that one. So if we decrease the recreation, we are still negative. Our car payments are what they are. We can't do anything about those.

[OhioFiler]

The $925 and the $208 recreation can be cut.

[kcfaninin]

How big is your household? Do you have any special expenses.

To be honest, with a mortgage of only $2325 and NET income of $7000+ per month, your attorney is right, you are not 7. There is no way you have "allowed" expenses that would eat-up that sort of income in order to qualify you for a 7 unless you are, perhaps a household of 7 or 8 people. You can get all the 2nd opinions you like, but unless there is more to this story, I don't see how you are a 7.

We are a family of 5. Nothing more to the story then what it is.

$2325 Mortgage (includes taxes, insurance and PMI)
$925 one is for daughter in college $2000 left to pay
$320 Gas Water and Electric
$297 Phone, cell phone, cable and internet
$210 Home maintenance and repairs
$600 Food
$250 Clothing
$45 Laundry Dry Cleaning
$396 Medical (2 daughters with braces, husband and myself on monthly meds and 1 daughter has heart problems)
$410 Transportation -Gas (my job is an hour away from home)
$208 Recreation
$200 Church
$561 State Farm (Life, home and auto insurance)
$150 Federal Taxes 2007 (payment plan)
$170 Student Loan
$250 Parent Plus Loan
$120 Expenses for child at college (food, gas etc)
$158 Pet care, school expenses, supplies, lunch money
$7660

Net income $7177
-7660
equals -483

Where can we cut back in order to fund a Chapter 13?!?!?

[OhioFiler]

Can you provide us with an itemization of your $7600 monthly expenses?

[BKParalegal]

Whatever you do, do not let any attorney force you into a 13. This is how attorneys make money.

Just a FYI on that, in reality, attorneys make less on a Chapter 13 than a 7. The fees in a 13 are set by the courts, and it takes a fee app to get beyond the standard fees set by the courts. 7's are much cleaner, faster, and more profitable.

In regards to the income issue, HHM, for the most part is correct. A net income of $7k+, depending on your household size, it is going to take alot of secured debt (car loan, mortgage etc.) and some high allowable expenses (medical and dental expenses, life insurance, charity etc.). You have to remember that just what you shows as expenses on Schedule J, doesn't direcly factor into expenses in the means test. For example, food, utilties, vehicle operating expenses, are all capped on the means test. It is an art and a science to get high income earners to pass part 2 of the means test. Unfortunately, most, alot, all, of attorneys I have worked with, the math part of bankruptcy is their kryptonite.

You can always refile a 13, stay in it a year, and look at converting to a 7.

Good Luck

[Walangatik]

Whatever you do, do not let any attorney force you into a 13. This is how attorneys make money.

[HHM]

How big is your household? Do you have any special expenses.

To be honest, with a mortgage of only $2325 and NET income of $7000+ per month, your attorney is right, you are not 7. There is no way you have "allowed" expenses that would eat-up that sort of income in order to qualify you for a 7 unless you are, perhaps a household of 7 or 8 people. You can get all the 2nd opinions you like, but unless there is more to this story, I don't see how you are a 7.

[southernbelle]

I would definitely get a second opinion. Good luck to you.

[aces67]

I agree. No one should have to work that much. I do hope you find a solution soon!