UST issues Motion to Dismiss

[LJoutWest]

For those following our saga, this is what our attorney said to us. First, he has handled many (he estimated over 20 cases where it has gone this far) cases similar to ours that have gone this far and he hasn't had one convert to a 13 (yet, each case is unique). Second, there is enough precedent to argue the inclusion of the mortgage we surrendered. Next, the UST's paperwork was thrown together in his opinion cites in a couple of places the wrong statute for what they want to argue. Finally, he feels that this is the UST trying to force us into a Chapter 13, and he has successfully contested these in the past and feels confident about it. Also, he has argued the totality of circumstance last January in his last case to go this far with the same judge and on the day before the ruling was to be issued the UST here withdrew the motion and allowed the 7 to go on. They feared losing because of the precedent it could set. Our attorney says no promises since every case is different but he is highly confident we will win. If not, then we can do the 13. So, we set him loose and he sounded almost giddy about doing it . . .

[good2free]

Hello LJoutWest,

Sorry to hear about the UST motion.
If you can safely go to 13 even after loosing the fight, I think it is better to fight. Your layer is nice to take a one time fee for this process.

How many months are you behind on your mortgage before filing? In my case I am behind for 7 months and the citi bank did a loan modification and waived all the payments. I filed CH7 after the modification. I continued the payments after the modification (which is $500 lower than the original) on my mortgage only to use that expense in the CH7. I am not reaffirming the mortgage and I know I am going to stop the payments once I get my discharge. House is big time under water even after the mod. I did this just to avoid UST otherwise I could have surrender the property. Thanks to this forum otherwise I would have done the same thing you did.

I hope things will turn out OK to you in the new year.

[justbroke]

Also, he has argued the totality of circumstance last January in his last case to go this far with the same judge and on the day before the ruling was to be issued the UST here withdrew the motion and allowed the 7 to go on.

Most USTs use the motion to dismiss as a stick. Many do back off before the hearing. I like your attorney and it appears to me that you hired the right attorney for the job!!! Best of luck!

[LJoutWest]

Good2free,

Yes, I wish we had done a few things different prior to filing, the first being knowing about this forum. Having said that I found an interesting case in the Dayton District (not my district) called Philips. The UST was going after that case in a similar way but the judge took exception to the items that they did not include in the totality of circumstances looking forward (like my district does) and did not include the items they disallowed in the 7 that would be allowed in the 13. Thus if you do that we come out at a negative number and it makes no sense to dismiss or convert to a 13 (our case is different in that regard than Philips whose 401k loan will be paid off during the chapter 13, with enough income at that point to pay creditors so Philips had to convert to a 13). I think if a judge looks at a real forward look including the items disallowed and sees that we are negative the UST's case will fall apart. This seems to be a similar tact that our lawyer has taken in the past and the UST here doesn't want this to come out as precedent in this district and thus they have removed their filing and allowed the 7's to go through.

So yes, we are fighting and even if we lose perhaps some good can come out of it and in the worse case we go to a 13 that is realistic. Our lawyer really believes once they get his arguments they will back down but will see. I hope he's right but I am planning on a 13. This be sound weird to some of you, but the emotion is out of this for me. I don't see a lose lose for us in this.

BTW our old home is not in foreclosure though the stay on it was lifted, they haven't done anything. They may be waiting to see if we convert and then approach us on a modification because the house is no where near what is owed on it. At filing we were 7 months behind also. Rather weird on that issue I think.

[albacore44]

i just got off the phone with the Att I am planning to use, made my appointment for Dec. 29 (finally). His wife told me they were extreemly busy, and not taking any complicated cases, whatever that means.

[justbroke]

I think if a judge looks at a real forward look including the items disallowed and sees that we are negative the UST's case will fall apart. This seems to be a similar tact that our lawyer has taken in the past and the UST here doesn't want this to come out as precedent in this district and thus they have removed their filing and allowed the 7's to go through.

It's called a hypothetical Chapter 13 and yes, the UST should be figuring out your Hypothetical Chapter 13 to see if it would provide a dividend to unsecured creditors.