Not trusting any Lawyer

[dukedog]

Went to my third free consult today. We never get to the point where they say "all your numbers look good lets get started''. All I get is "when you bring be the $1900 we will begin to process the paperwork and we will know more.

I do not want to file 13. I will do debt settlement before 13.


I am over median

Gross monthly $7712
Keeping home $1881
Family of 4

My question is that I was going to turn over my truck with a payment of $589 Im thinking that this might not be a good idea because it will raise my DMI??

If I do not plan to reafferm, can I still claim operating expence on two vehicles?

And I am confused on some of the expences I can claim. On lawyer started crossing out stuff like birthday gifts and household supplies. He crossed out tything to the church.

I just want to make sure I have a solid DMI before I give $1900 to one of these guys to tell me I have to go to CHP 13.

I use my gross bring home pay right? Then can take out health insurance, life and accident insurance for expences? Are Taxes expences (payroll)?

Scratching my head!!!

[btbeme]

Which state are you in?

When you are over median income, expenses get scrutinized closely. From a trustee's point of view, it is too easy to fudge the numbers to be able to qualify for a Ch 7. Think about it - Congress passed a law in 2005 to make it more difficult to do exactly what you are trying to do. Any attorney in this current market has the opportunity to "turn and burn" as many easy cases as possible without spending the time, effort, and resources trying to justify birthday gifts to a trustee.

I am not saying your expenses are not legit. I am saying that you need to keep looking for an attorney that can help you pre-plan a Ch 7. Remember, though, a square peg cannot get pounded through a round hole without a lot of effort. And effort = $$$

Tithing in most states is pretty much an acceptable expense as long as it can be somewhat proven as consistent. Actually, that rule applies to most expenses, so long as they are at either state levels or federal levels. Allowable expenses vary greatly from jurisdiction to jurisdiction, and from trustee to trustee. Find an attorney that can help you understand the variables and then YOU can make the choices you need to make in order to fit the template (if possible).

Where you are can make a big difference.

[ccsjoe]

duke...are you talking about the means test or schedule J? The best way to determine your chances of success at filing a 7 is to do the numbers yourself....multiple times...run them by here, ask for more help. But when looking at it this way, your questions can not be vague. In order for everyone to pitch in and help you figure this out, we need you to post real numbers...so post your means test, for example. Tell us which state, you already said household of 4. What are the other numbers? Once you feel reasonably certain of a 7, then you can pay one of them...final thought-I'd urge you to interview a couple more, maybe with more refined numbers-of the three I interviewed, two told me during the interview that I likely qualified for a 7 based on the numbers I presented, with the caveat that we would not know for sure blah blah blah.

[nc73]

Did you come prepared with all the numbers for your lawyer to see? If not there isn't much they can do during the free consult. They can usually punch the numbers in during the consult and tell you what they think. At least that's how i did it.

[tcreegan]

attorney shopping

Hello dukedog,

Don't get discouraged, keep shopping for attorneys. Some folks on the forum have gone through a half dozen or more before finding a good fit; you know the old saying...you have to kiss a lot of frogs....

In the meantime, ask questions here and search the forum to narrow down the questions for your attorney-to-be

Your expense questions have to be split into two places:

A. the means test which looks back over the last 6 months of your financial condition.

B. Sched J which looks forward to life after BK

Generally for the means test, you either use an online version or you download the actual form from your BK court. The means test uses IRS standards/local standards for expenses, you can vary from these, but you need to be able to document/explain why you have greater expenses. The means test will give you a DMI (first one)

Sched J is going to be actual expenses, what you anticipate you will have during/after the BK. Sched I (income) - Sched J = DMI (second one)

There is also a great resource, affectionately known as the NOLO book. Basically it will walk you through a BK, check out www.nolo.com

As to your specific questions....

Post your state and area if a big state, folks need this to check exemptions, etc

Tithing is OK if you have a record of regular giving

Two vehicle operating expense is completely OK, need one of the gurus to weigh in on the loan expense if you aren't keeping the vehicle...

Gross income is what you use, both means and Sched J

I don't think the taxes are expenses, but I am not sure

Birthday gifts probably not OK, house supplies definitely yes as an expense

Good luck with all this, hang in there, it is a long process but eventually you get through,

Tom in Colo

[dukedog]

I am in Georgia.
Yes, I have filled out the schedule J three times. The one lawyer crossed most the stuff on the schedule J.

Congress passed a law in 2005 to make it more difficult to do exactly what you are trying to do.

Im not trying to get out easy, but right now with my unsecured debt, DMI is -$1200. Im very happy to have income, but I have lost about $40000 compared to three years ago.

[stillstandin]

I just joined the forum yesterday and haven't posted or asked questions until now--too busy absorbing information, but your post caught my eye and mind, so I wanted to share.... I am 2-3 days from discharge now, and I just wanted to tell you to keep interviewing attorneys. When I knew that this was probably my irreversible fate, and that my 750 score was about to be flushed down the toilet soon, I really started to do my homework on the atty side and what my 7/13 options were, and it was confusing. The first 'free' consult was disappointing. The guy told me that I would absolutely not qualify for chapter 7 and that 13 was the only solution, and mind you, I had come to that meeting with an organized picture of my personal and business affairs for the previous year (self employed). I got really lucky on my second consult which was not free--$25. This atty explained to me that I definitely DID qualify for chapter 7 and was shocked and troubled that I had been told otherwise. I learned that if I had filed 13, then the atty gets a portion of what I pay monthly for the 5 years that I would have been in re-payment. He did disclose this, but his charges were still $900 up front. And he lied to me. When I did the math, he would have made more than three times what I ended up paying in the end for the atty that I decided to hire. I learned that the attys can make more money from 13. In 7 they cannot--the fee is what they get. I hired this atty and paid around $2000, but she then waived the consult fee, in the end when she offered to represent me. Atty's who charge a fee, in my experience are trying to weed out people who want EVERYTHING for free, which is reasonable in my mind in this situation. In a nutshell, the first guy did NOT have my (THE CLIENT) best interests in mind, but his bottom line. Our cases are different, but I urge you to keep interviewing until you feel that you have found someone who will fight for you and your best interests going forward. Good luck!

[dukedog]

What am I missing? If I take out my payroll deductions and Card payments I am sunk.

Mortgage 1881
Electricity 230
Water 32
Telephone 300
Garbage 30
Pest Control 28
Home upkeep 100
Clothing 100
Food 500
med &dent 240
transportation 420
recreation 200
Charitable cont 400
Life ins 114
auto ins 150
Childrens school & church activities 100
Truck Payment 598

[Dougie011]

Don't forget to figure in supplies such as shampoo, tooth paste, hair cuts, dog/cat food, vet bills, car repairs, gas for the car, car wash, there are many things that I had forgotten until my attorney went over everything with me.

[btbeme]

Duke, keep talking to attorneys. On the balance, the trustee is interested in only a small number of things. First, do you qualify under federal guidelines? This sounds like your biggest question. Qualification over median income basically comes down to whether your expenses are reasonable. "Reasonable" means different things to different people, but the more common definitions of "reasonable" mean that you do not exceed federal or state allowances for everyday expenses without a very good explanation. "Reasonable" also will likely mean that you have a track record of such expenses AND that the continuance of those expenses is in your best interest. This is a judgement call on the part of the Trustee, and depends a lot on how it is presented by the attorney. I interviewed no fewer than a dozen attorneys, settled on one, then switched after a couple of weeks to an attorney who was more aggressive in making sure my numbers made sense.

Second, the Trustee will want to know if your file passes the "smell test." Believe me, whether new or experienced, a Trustee can smell things that don't add up. As my attorney explained to me, a polished turd still smells like a turd, so it is critical that you come clean with your attorney on everything. That means having your numbers BEFORE you go in to talk.

Third, a Trustee will look for consistency in your file. Again, a good attorney makes the difference here. The WRONG place to try to explain something in detail is in the 341 meeting. The other wrong place to try to explain something is in a 2004 meeting should your file, story, paperwork, etc not "add up." A good ol' plain vanilla filing is what you are after. Even if you don't think you fit that mold right now, a good attorney can get you there. It might mean that you have to concede a few points to their judgement, but a clean, fast 341 meeting based on a clean, organized filing makes a lot of difference.

I can recommend a great blog to you. This is an Arizona attorney, and he is very much a "black and white" person who goes by the letter of the law. He is also very, very good at helping his clients through a BK, as long as they are willing to be honest with him AND follow his advice. I found his blog to be more helpful than anything else I read. You will get the gist of what this is like after doing a couple hours of reading. http://www.arizonabankruptcyblog.info/

Take some time on your state BK website to punch in your numbers so they pass the means test. Print it out and make sure that you can back up your numbers. Bring that printout and your documentation to your attorney meeting. If you don't pass, don't panic - just be able to explain your situation clearly. If the attorney takes time to look over your homework, he/she is aimed the right direction, and so are you.

Last advice i can give - if you are a "borderline" case or feel that your case would require some explanation, take your time to find a good attorney who can help you plan a BK filing. It took me 9 months to line up my ducks. My attorney was worth his weight in gold.

[Pandora]

What am I missing? If I take out my payroll deductions and Card payments I am sunk.

Mortgage 1881
Electricity 230
Water 32
Telephone 300
Garbage 30
Pest Control 28
Home upkeep 100
Clothing 100
Food 500
med &dent 240
transportation 420
recreation 200
Charitable cont 400
Life ins 114
auto ins 150
Childrens school & church activities 100
Truck Payment 598

I see quite a few issues with your budget that a trustee will more than likely balk at.

300 for telephone - very excessive
500 for food - too low for a family of 4. We have 500 allocated for food and its sometimes not enough and we're 3.
420 transportation - is this just for gas or does it include maintenance? for how many vehicles? Seems very high.
200 recreation - high
400 charitable contrib - bet the trustee makes you cut this amount back, $100 a week is high even if 10-15% of income
230 for electric - is this a budget amount? Will it ever go up?
32 water - same thing as electric... what is the highest bill you've had on a reg. basis? If this is it..then thats fine.
150 auto ins - if you file BK - thats going to go up by at least 15-20% easily (ours did - no accidents/tickets ever.. )


Your mortgage - does that include escrow for taxes, ins., HOA and any PMI you may have? If not, you need to add those in.

Medical & Dental - is this in addition to your health insurance/dental insurance - or is this what you pay for those? medical /dental should be in addition for like copays, RX's, etc.

ETA: We have Christmas and birthdays in ours - as do many others, so it is an allowable expense. If your lawyer doesnt like it, then "pad" your budget elsewhere for them. Also dont forget you are allowed to contribute to a 401K, 457, etc.

Everything else looks okay - and yes, dont forget about any pets you may have We are allowed $40 a month for pet needs (food, vet, etc).


As far as the debt settlement/management vs. filing BK either way your credit is trashed but it seems to be the standard opinion on here that you will recover alot quicker with a BK vs. debt settlement.

[HHM]

As for the attorney issue, no attorney (or very few attorneys) are going to do actual legal work without getting paid at a consultation, so you have a somewhat unrealistic expectation of what is supposed to happen at a consult.

Based on the numbers you posted and how much over median you are, you really are a long shot for chapter 7, there are no special circumstances or expenses that are obvious. In an over median case, the difference between 7 and 13 is a matter of inches (which is a bad thing), because the U.S. trustee doesn't need but a few hundred dollars. I am not sure why you are so dead set against a chapter 13. Chapter 13's are about getting back in control of your debt. Unless you have the money available or can pull it together in 12 months or less (about 40% of the balances owed), debt settlement isn't really that good of an option. Your financial life will spiral too far out of control. Most of the time, if the money isn't immediately available to settle, you are probably better off in a 13.

[tobee43]

duke do not get discouraged at all. you need to continue to interview atty's until you find the one you feel most comfortable with as far as handling your situation.

secondly...

people have made suggestions as far as your expenses....panda's right on with the FOOD....please...i'm am the most penny pinching shopper for food there is and WE WERE actually questioned BECAUSE I CLAIMED TOO LOW FOR FOOD COST!!
(i claimed $300 for food...which was actually the TRUTH when we lived in the other state...i had just done an "average"). well down south here holy cow...well actually a cow is holly...because it's so darn expensive we now never EAT cow...

anyway....re visit your food and maintenance costs...as well as medical and dental... you have KIDS...i know when i buy my grandchildren cold meds or whatever i can't BELIEVE the cost!

pandora's correct about the contributions...even tithing....for religious reasons that's too high. the general rule, is approx. and NO more than 10% of your GROSS....

does your phone bill include your dsl....your cable ect???? you need to SPELL that out...since no one nowadays has a $300 "just" phone bill....that will be a flag. etc. etc. go through like a fine tooth comb and then over again.....only YOU can do this. but remember the TRUTH never changes so it's much easier to remember...keep the numbers in check.

[gman]

Dukedog....welcome to bkforum

I too am in Georgia (Northern District/Metro Atlanta) specifically - am also over the median income - have no desire to do a Chapter 13 (5 years debtors prison where 80% of people have a single hiccup throw them into a 7 anyway) - am currently unemployed after making $100k+ - and have had to wait while my "last 6 months income" dipped to where I passed the Means Test.

In a nut - we have a lot in common...

You are getting good advice here so far. In your case, you need to first concentrate on passing the Means Test for your county in Georgia. IF YOU DO NOT PASS THE MEANS TEST IT WILL BE VERY DIFFICULT FOR YOU TO GET A CHAPTER 7 REGARDLESS OF WHAT SCHEDULE I & J HAVE.

You can do scenarios of the Means Test online for free here:

http://www.legalconsumer.com/bankruptcy/means-test/

Now - one thing for you that is different for me is that you have a home. As such you can enter that amount into the Means Test EVEN IF THE "ALLOWABLE" AMOUNT IS LESS. As a renter - I cannot put down my actual rent and am forced to do the "allowed" amount - making it tougher for me to qualify.

The online test has the exact amounts 'allowed' by the courts per your zip code for many expenses. As an example: If you spend $1,000/mo on food, clothing and homekeeping supplies but the allowable amount is $800, you can only enter $800.

Do yourself a favor right now - FOCUS ON PASSING THE MEANS TEST AND THEN COME BACK HERE AND LET US KNOW IF YOU PASS OR NOT - AND BY HOW MUCH.

OK?

Now - as far as trusting lawyers - I hear you loud and clear. In the last 2 months I have received better information here than from lawyers. Even worse, I have had lawyers simply give me incorrect information period. Here's my take on the lawyers handling bankruptcies after speaking with about 10 of them:

1. They make little to no money on Chapter 7 cases. They make good money on Chapter 13s (and are guaranteed they will get paid on these as well.) I always fear they just want to get me in the boat and then push me into a 13 after the fact - a classic bait and switch.

2. The ones who are general purpose lawyers are not up to speed on changes in the BK courts. Stay away from the lawyers who also handle DUIs, divorces, etc. You go to a heart specialist for a reason...do the same with BK lawyers. Find one who ONLY does BKs. There are a few firms like this in metro Atlanta - assuming you are here.

3. If you are a do it yourself kind of person - you can save about $1,700 by filing on your own.

Finally - and this is a side note - give some serious thought as to keeping your home. IF YOUR HOME IS WORTH LESS THAN THE MORTGAGE - THIS IS YOUR ONE CHANCE IN THE NEXT 8 YEARS TO GET OUT OF IT WITHOUT HAVING TO CUT ONE HECK OF A BIG CHECK TO UNLOAD IT. DON'T LET EMOTIONS TO BRICKS AND STICKS SADDLE YOU WITH HAVING TO WRITE A CHECK FOR $1000s JUST TO HAVE THE RIGHT TO MOVE. 8 YEARS CAN BE AN ETERNITY. YOU CAN GET ONE HELL OF A RENTAL DEAL FOR MUCH LESS IN METRO ATLANTA. THE SAME CAN BE SAID OF "UPSIDE DOWN" CARS/TRUCKS.

Keep your chin up....you will have lots of support here. We are all in the same boat and no one is judgmental. Think of this as hitting CTRL-ALT-DEL on your financial picture.

[tobee43]

Finally - and this is a side note - give some serious thought as to keeping your home. IF YOUR HOME IS WORTH LESS THAN THE MORTGAGE - THIS IS YOUR ONE CHANCE IN THE NEXT 8 YEARS TO GET OUT OF IT WITHOUT HAVING TO CUT ONE HECK OF A BIG CHECK TO UNLOAD IT. DON'T LET EMOTIONS TO BRICKS AND STICKS SADDLE YOU WITH HAVING TO WRITE A CHECK FOR $1000s JUST TO HAVE THE RIGHT TO MOVE. 8 YEARS CAN BE AN ETERNITY. YOU CAN GET ONE HELL OF A RENTAL DEAL FOR MUCH LESS IN METRO ATLANTA. THE SAME CAN BE SAID OF "UPSIDE DOWN" CARS/TRUCKS.

Keep your chin up....you will have lots of support here. We are all in the same boat and no one is judgmental. Think of this as hitting CTRL-ALT-DEL on your financial picture

.

great advise!! yes, indeed we are all in this together...whether our immediate path is just considering and dealing with our present financial situation...asseting our situations...going to a 341...or celebrating a confirmation or a discharge, many times this place is a better stress reliever than a double shot!