Lawyer says I can't file chpt 7, I think he's wrong...

[justbroke]

Anything you are contractually obligated to pay on date of filing can be claimed as expense. One strategy is to state you intend to reaffirm both cars and the house but you are not obligated to ever sign an agreement and even if you do, you can cancel it. This could end you in a Ch13 anyway but may be worth a try. JMO.

This is true. It has been found time and time again that what's on the Means Test (Form B22A) is everything that you have contractually due, regardless of whether you are surrendering it.

However, the Trustee can pull the old "totality of circumstances" (11 USC 707(b)(3)) motion to dismiss out of their bag of tricks. In any case, if you do note a reaffirmation of those secured items (car and home) and are actually current at the time of filing... you could do as described.

I think the issue with johnnyp26 is that when they surrender the car and home, they show an actual positive DMI!

[aljohnson007]

Anything you are contractually obligated to pay on date of filing can be claimed as expense. One strategy is to state you intend to reaffirm both cars and the house but you are not obligated to ever sign an agreement and even if you do, you can cancel it. This could end you in a Ch13 anyway but may be worth a try. JMO.

[johnnyp26]

You need a really good consult with a very experienced attorney. I don't have all your financials so can't tell you what your hypothetical "disposable monthly income" (DMI) is or should be.

Are you keeping your home? If you are, then the "standard allowance" means nothing.

We've decided we will not be keeping our home. It doesn't make sense with it so far upside down, and considering how far we travel to both work and my son's school, it just doesn't make sense.

[justbroke]

You need a really good consult with a very experienced attorney. I don't have all your financials so can't tell you what your hypothetical "disposable monthly income" (DMI) is or should be.

Are you keeping your home? If you are, then the "standard allowance" means nothing.

[johnnyp26]

I wanted to update the situation a bit and get some more opinions.

When we started thinking about bk I was in line to start making a lot less money (I am in the mortgage business), and I think we used a lower number than my 6 month average for the means test assuming that once it was time to file my income would have decreased significantly.

Well I have been out of work on disability for a while now, and with my tenure they were forced to pay me a 6 month average of my commissions before I left work, which is about $2,500 a month more than I would be making if I was still at work now.

Also when we did the means test, I had planned to keep our house and both of our vehicles. After meeting with the attorney a few times, and explaining our situation with both cars and the house, he advised we let one car go in the bk, keep one and let the house go (we are about $80K upside down, and have an adjustable rate starting in 3 years on the first, and a fully adjustable equity line). So knowing that it is unlikely that we would be able to refinance the house once the 1st mortgage was ready to adjust, we just decided we'd walk away from the home, as quite frankly we don't like the location of it at all. My son has special needs that require him to go to school a good deal away from our home, and it's become very difficult transportation wise with our house.

Fast forward to now, and I just did a mock means test online again, and it says we have about $2,500 in dmi. 2 of the biggest differences are we decided to let the one car go (570 a month for 5 more years) and the difference between our actual house payment and the standard allowance is about $1,000. We have no assets at all, but it seems like we are going to have to go chapter 13 because of our dmi. The problem is, if this means test shows we have $2,500 a month in disposable income, which we won't, then we're back to paying just about the same as we were before we started this process and not any better off. I just have no idea what to do at this point. I have no problem with doing the chapter 13, I don't expect a free pass, but just looking at this filing wouldn't solve anything. I am just so frustrated right now, I really wish my attorney had taken the time to look at the paperwork we gave him a month ago and tell us this. Any suggestions? I did send an email to a friend of a friend who is a bk attorney here for some advice, but haven't heard back yet.

[aces67]

I would get a second opinion also. That's not right.

[aljohnson007]

If you have done your research and know the facts, keep looking for the right attorney. I filed pro se because three attorneys told me I couldn't exempt assets under Tenancy by Entirety and they were all wrong.

[OhioFiler]

Rather than starting to lawyer shop why don't you sit down with the attorney and see what you can work out? As an informed consumer he may be willing to listen to your viewpoint more than he might listen to an uninformed client. I'm thinking of the investment you've already made with him. I'd hate to see you throw that money away.

[pcn]

Keep looking. We had one atty tell us that we could lien strip in a ch7... There are good and bad out there, just like any profession.

[want2save]

The fees quoted for a Chapter 7 is astonishing. I guess I used a "mill" lawyer, as BK is all he does. BUT...his fee was $1,000.00 and he saved me $500. each on the two vehicles I repurchased from the Trustee, giving me excellent advice as to what to offer, $1,000 less than I planned. I also paid him the $299 filing fee in addition to the $1,000. He was astonished that I had not talked to him in person or on the phone, just filled out his online questionaire . So, he did not charge extra for working with the Trustee on my vehicles. My emails were always answered within 24 hours.

My 341 and discharge went without a hitch and I was way over $100 k in unsecured debt. I kept my home as the exemption and costs of sale exceeded the equity. Since I am an asset case, I still await closing.

There are some fair lawyers out there.....keep looking!!!!!

[BobMango]

I can't believe your attorney talked to you on a Sunday!

[signal]

I can't believe your lawyer told you that. Ill-advising someone about bankruptcy, especially by misrepresenting the federal law and thus their options, should be actionable in itself! I mean, had you not had this forum, or other information you could be making a less than ideal decision, all because of misguided legal information. Negligence on the attorneys part.......

[johnnyp26]

I agree with everyone here and I might add that the DMI max to qualify for Chapter 7 is actually now around $180.00, providing that paying that amount monthly for five years would not pay 25% of your unsecured debt.

My attorney told me that in our district, above mendian filers get so much scrutiny from the local trustee, even before a UST sees anything that his firm does not deal much with above median cases because they simply do not have the time. I think that is honest, rather than just trying to shove people into 13s because it is easier that way and he could make a buck.

LOTS of above median people get 7's. It is just a little more work is all.

First off thank you for all of your replies. Everyone seems to for the most part agree that I need another opinion, and that's what I was leaning towards anyway. The attorney was encouraging me to send him a check first thing tomorrow for the extra $1,400 to file the chapter 13, so I think he was in a hurry to reel me in. I did question him over the phone today about the means test, and he simply replied that it's federal law that if I pass over that median income I can't file 7, period. Clearly that isn't the case, and I think the majority of you are right, he doesn't want to get involved with the extra work since the trustee probably will go through our case a lot more thoroughly given our income. If the trustee tells us we have to go chapter 13 so be it, because we are certainly reducing our debts by quite a bit, but that initial means test I took does show us at about $190 deficit a month.

To justbroke, I certainly agree that there are other things that could be factoring into him telling me I have to go 13, but when I called him on it today he should have taken that opportunity to tell me that. Instead he stuck to his story with our income being the ONLY factor. He flat out said our debts have nothing to do with it. My attorney is a 1 man show, and I wanted to think the best of him just being overwhelmed, but clearly he doesn't have our best interest in mind.

I guess I'll be calling around tomorrow for a new attorney. I have a feeling it's going to be an issue getting my money back from my current attorney at this point, but it would be worth it if I am right.

[justbroke]

Not to be in defense of the attorney, but you may have other issues causing you to not be qualified to receive a discharge under Chapter 7.

First, there is no connection between being over the median or under the median when it comes to qualifying for a discharge under Chapter 7. An attorney should tell you that you don't qualify because you don't have enough expenses to reduce your disposable income below the $182.50 or $109.00 thresholds. Or, they can just be open and honest and say that they don't like to do over the median Chapter 7 cases. (They can cost more for the attorney to deal with since they get more scrutiny.)

There are plenty of people on this forum, from Florida even, that have received Chapter 7 discharges while being over the median by varying and sometimes huge amounts!

As previously posted by others, please shop around for another attorney who specilizes in Chapter 7s. You may want to ask the attorneys that you consult with, if they are willing and able to handle over-the-median Chapter 7 cases.

[leena]

I agree with everyone here and I might add that the DMI max to qualify for Chapter 7 is actually now around $180.00, providing that paying that amount monthly for five years would not pay 25% of your unsecured debt.

My attorney told me that in our district, above mendian filers get so much scrutiny from the local trustee, even before a UST sees anything that his firm does not deal much with above median cases because they simply do not have the time. I think that is honest, rather than just trying to shove people into 13s because it is easier that way and he could make a buck.

LOTS of above median people get 7's. It is just a little more work is all.