Is this possible?

[jgcortese]

Looongg post from a newbie! Sorry!

Ok, I'm so confused. Filed with lawyer #1 3 weeks ago (who during pre-consultation said we could file chpt. 7) paid $550 down. Last week dropped a bombshell and said we're $1000 over on our Schedule (I or J not sure) with our income so we won't qualify to file chpt. 7. Had 2 choices...wait until we qualify (our income is going to reduce slightly in July moving forward) OR seperate "on paper" from spouse to qualify (which we aren't willing to go down a dishonest road see previous post). Met with lawyer # 2 today who said where's your mean's test...said lawyer #1 never ran one b/c we were over our allowed surpluss...lawyer said nonsense, ran a preliminary means test and said no problem...you pass once you factor in allowable deductions (didn't even get into all allowed deductions available we are currently at $98K combined income before all allowed deductions... family of 4 Median Income in MI is $71K).

Question 1...how is this possible? Is lawyer # 1 incompetent?
Lawyer #2 said to wait until August to file because our income is going to become more reduced by then even though we qualify today...guess that makes sense...less red flags for trustees??

Question 2...Lawyer #2 said his fee is $1900 paid upfront before we file...is this within a normal range and upfront? Said these are his fees plus court costs and counseling sessions. Lawyer #1 was $1100 out the door. I'm not so concerned about the cost if he can make this happen as I've read on this forum a good lawyer is worth his weight in gold...(we are in MI btw.) Said it won't be a problem.

Thanks for any advice...this process is so new to us and this forum has been so helpful so far. God Bless.

[debee]

Passing the Means Test means you are allowed to FILE a chapter 7. It doesn't mean you will be successful or get the discharge. It just means that you can at least submit the paperwork.

Once you do file, you have to 'pass' the schedule I/J. Schedule I is where you list your income and J is where you list your expenses. When you subtract your expenses from your income, you don't want to have enough money leftover (disposable monthly income) to fund a chapter 13. If you have too much DMI, the UST will move to dismiss your case.

Since you are over the median income, your case will be looked over much more closely.

The more you know about bankruptcy, your expenses, etc BEFORE YOU EVER FILE, the better.

You can do the Means Test yourself here. You enter your household size and zipcode and the test will automatically fill in certain expense values that you are allowed to take - even if they are higher than your actual expenses. You can see for yourself whether you're passing it.

Then you may want to start researching schedule I/J issues. You can do searches here at bkforum and read, read, read.

You may be showing $1000 DMI on Schedules I/J now, but there may be expenses you are overlooking and ways you can fix it.

[sunshinepa]

I would do what Debee stated before making my decision. If lawyer number 2 will fight to get the CH 7, I certainly would be willing to take the risk. I paid 1500.00 but it did not include counseling sessions and I was under median. So he may be within reason as I don't know what most have paid in MI.

Good luck and keep us posted.

[IamOld]

JG, as the others have posted, sounds like lawyer #2 is willing to delve further into your case and fight for you. One thing I can tell you , BK 7's HAVE to charge in full (sadly) upfront, because they cannot be a creditor to you as you go thru Ch 7. I REALLY wish this weren't the case!!!

[jgcortese]

Thanks everyone! I'm getting an education I never thought I'd get!

[tobee43]

agreed, shoot we had to to 5-6 atty's before hiring one. i think 4 of them insisted that we had to go chapter 13 while we did want to go no asset chapter 7. so that was FAR off. we found the right atty, and had absolutely no problem with our filing a no asset 7 as we thought we should. if we had listened to the other atty's i don't really know where we would have been today.

[tmkats]

JG, as the others have posted, sounds like lawyer #2 is willing to delve further into your case and fight for you. One thing I can tell you , BK 7's HAVE to charge in full (sadly) upfront, because they cannot be a creditor to you as you go thru Ch 7. I REALLY wish this weren't the case!!!

My attorney said the fees had to be paid before we file, but we can pay over time. He won't file until they are paid, but since we need 6 months pay stubs anyway, it's fine.

[IamOld]

tmkats - am doing the same- it's just that atty needs to be paid before he files. even if it's just paid in full the same day.

[tmkats]

tmkats - am doing the same- it's just that atty needs to be paid before he files. even if it's just paid in full the same day.

Gotcha. Same for me. he won't file unless he is paid in full. I need time to gather everything up, so it's all good.

[jeep75]

I'll just throw in an example here that may work for you on your Schedule J, you might think you spend $50 on non-insured medical, co-pays, OTA etc, but the allowance is $240 month. Put a number close to $240 as something will undoubtedly come up. Same thing with food and clothes, the allowance for food is 750 and 240 for clothes, use these on the schedule J. If you can prove you even spend more than the allowance use that.

Not sure how old the kids are but Childcare is a big expense on both the means and the Schedule J.

If you don't have two car payments (not more than $496/mo each though), it would help to have two on the means test and the schedule J. If you do end up being put into a 13 you will need two good cars for the 5 years you will be in it.

You can find the allowances here:

http://www.justice.gov/ust/eo/bapcpa/20101101/meanstesting.htm

One last thing also, even though you start at 98k further down the means test your taxes that are taken out and your health insurance is taken out too.

We're in the same boat, over median, our lawyer admittedly thought once he put our mortgage in we'd pass. He's earning his money now

[jetsfan2010]

Passing the Means Test means you are allowed to FILE a chapter 7. It doesn't mean you will be successful or get the discharge. It just means that you can at least submit the paperwork.

Once you do file, you have to 'pass' the schedule I/J. Schedule I is where you list your income and J is where you list your expenses. When you subtract your expenses from your income, you don't want to have enough money leftover (disposable monthly income) to fund a chapter 13. If you have too much DMI, the UST will move to dismiss your case.

Since you are over the median income, your case will be looked over much more closely.

The more you know about bankruptcy, your expenses, etc BEFORE YOU EVER FILE, the better.

You can do the Means Test yourself here. You enter your household size and zipcode and the test will automatically fill in certain expense values that you are allowed to take - even if they are higher than your actual expenses. You can see for yourself whether you're passing it.

Then you may want to start researching schedule I/J issues. You can do searches here at bkforum and read, read, read.

You may be showing $1000 DMI on Schedules I/J now, but there may be expenses you are overlooking and ways you can fix it.

This is great info. Also re: lawyers fees, I have also learned from experience the cost to file a case(7 or 13) can be drastic from one firm to another on the same street or (in my case) in the same office park lol.

[debee]

Excellent advice from jeep & a great link too.

The only thing about going over the allowances is that in addition to documentation, it also has to be "reasonable and necessary". So medical expenses over the allowance will be fine, but food (unless related to a medical condition) would get you an objection.

[jeep75]

Excellent advice from jeep & a great link too.

To give credit where it is due, I learned it from your posts.

[jetsfan2010]

that nolo link is invaluable. Wish I had that before I ever filed my first 13. Some of the comments in this thread are very familiar. Having the "RIGHT" attorney that will work for you is key.

[debee]

To give credit where it is due, I learned it from your posts.

LOL @ all the "love" in this thread. Group hug time. Kidding.

I didn't see your earlier post, jetsfan. Thanks for the kudos. I agree that the right attorney makes a huge difference. There've been forum members in the past who had stinky attorneys but who came out alright because they knew enough to catch their attorney's mistakes. The more a person knows the more they can 'help' their attorney.