filed non-consumer chap 7 this morning

[angles]

its not uncommon for a bankruptcy attorney to also be a trustee.

[URODOC]

I am in the process of doing a non-consumer Ch. 7, with now a very high income.
You cannot be forced into Ch. 13 if the unsecured debt exceeds a certain limit. If that were the case I would be immediately forced into a Ch. 13.

[chrisdfw]

That's true, never thought of that... too much debt for a 13... but don't pass means test for a 7?

I wonder what would happen then?

[jst4f]

We are currently in discussions with a lawyer, CA, getting ready to file a BK7 non-consumer even though we have a high income. After a year and half trying to work with the banks, we have given up hope of working out of this debt without help from the courts and professionals, lawyers. As explained to us, consumer and non-consumer depends on the intent of the loans and their respective amounts , in our case real estate rentals. If more than 50% of your debt (dollars not number of loans) is due to non-consumer loans, real estate mortgages, then you are a non-consumer BK. This includes the second mortgage on our house that was used to make the down payments on those mortgages and the credit cards in the rental names. Each rental is in a trust/LLC with its own bank accounts and credit cards. In our case, we are about 85% non-consumer debt. There was no question in the lawyer's mind that we were anything but non-consumer and see no problem with the trustee, at least in that matter. We have little to show for all the money we collected from rents due to the negative cash flows. We are still in the preparation phase, you know fill the freezer and fix serious problems with the house, so we won't file for another month. Clearly the message here is document, document document. (pun intended). More to follow as the next meeting with the lawyer is Wed.

[ronald65]

On a slightly different note, you said something interesting: your attorney is also a trustee. When I got my initial notice from the court after filing, it listed the name of my trustee, so I did a Google search (curious), and sure enough, she, too, is a local bankruptcy attorney.

Is this normal? I freely admit I don't know much more than what I have learned here and from my attorney, but I assumed (wrongly!!) that a trustee was just that, a trustee who worked for the court, and that was his or her job.

I guess not.

Hi: I checked out trustees online and they make 3% - 10% commission on your assets or payment

[UnlicensedDr]

I give the worst case scenario all the time to my clients; don't be a worry wart - you'll be fine. As long as your attorney is competent, and you said he is. I can tell you that in chapter 7s, my business clients skate through without problems, because the law exempts them from means testing. Reason being we want to encourage people to take business risks, to help the economy, so you get a free pass if your I and J look fairly reasonable together. The 2005 law was aimed at nailing consumers with high incomes, not movers and shakers (business starters and -runners) with high incomes.

Now, I just joined this forum, but I'm gathering it's the wrong forum for what I want. I want to share practice tips / research among attorneys, for questions on tough cases - are there a lot of practitioners on here?

my online name was supposed to be Unlicensed Dremel, but it cut me off.

Yeah, lots of chapter 7 trustees practice representing debtors as well as wearing a trustee hat.

[ronald65]

Thinking of going from chaper 7 to chapter 13

I met with the trustee and my attorney for the 341 hearing. I expected the worst but was much worse then I thought. I'm a real estate broker (myself only in the office) and have a small farm. I do finally have a couple commissions coming in, and have to sell my grain before June. My two small commission checks, plus my grain profit(can't file under 12) would be under $15,000 that would cover couple months of house and office payments, plus paying off day to day operating. Will be short but helps. He also wants me to mail him my small $45 a month commission check, I get from a network marketing company. I can't write any checks.Is this right? Plus mail him all real estate sale commissions and money from the grain.There's much more but this is the basics.

[angles]

Ronald65, how do you move forward if he takes your grain profit? I mean, don’t you need that money to buy seed for next year’s crops?

[ronald65]

Chapter 7 to 13

Hi: Thanks for the post. If Trustee takes the grain, plus 1/2 my machinery, I'm done farming. Therefore I'm requesting to change to chapter 13 so I can continue my real estate office ,I've been doing 26 years. Also farmed from 1976 to 1992, then started small, organic in 2007. Trustee sees maybe some money he can get his hands on as they get 25% of the first $5,000, plus 10% thereafter on what they sell or take from you . Commissions are the same as wages, do trustees have a claim on wages?