Some Questions

[needarest]

Hello all! I am new on here and had a few questions and figured you all may have some valuable information here.

Went to speak with a Bankruptcy Attorney today. He told us we could go with either the 7 or the 13 based on our income. He said it would be easier on us to go with the 13 because they look into things less with that. Our income is very low compared to our expenses. My husband brings home about 500 a week and I am unable to work because of health issues but I do not qualify for SS disablility. Our mortgage with Taxes and insurance included is about 1,700 a month and we only have one car and the payment on that is 211 a month. So as you can see we really have no money to pay back to them. I am worried if I go with the 13 that I might not be able to keep up with the agreed payments.

Another issue I am wondering about I received a settlement about a year ago from a personal injury I sustained. That money I had put in a savings account after I got it. But my husband was taking money out without me knowing and was gambling with it. He even flew to NJ and I am in Florida to go to Atlantic City to gamble. I also owed money to my mother and his father who were helping us out. My husband had two surgeries this year one that we had no income at all coming in for four months and the other he collected about 400 a week from WC which lasted for 6 months. So most of that money is gone. The account has been closed because I did not have anything left in it. Are they going to ask me about that? Do I have to disclose it since the account has been closed and there is no money left from it?

Also the attorney said to stop paying the CC bills but I read some place that you should pay up to 60 or 90 days after your last charge. Is that correct?

Well Thanks in advance for your help. I belong to a few other forums so I am looking forward to posting on here through my whole ordeal.

[keepmine]

First of all, you can't afford a $1700 mortgage and a car payment on $500/week salary. I'd let the house go in the bk as well.
Why does your lawyer worry about an investigation into your finances?
Did you pay any money to insiders from that savings account?

[needarest]

Thanks for the reply Keep. We did not always have a 1,700 dollar mortgage. We actually started with a 65,000 dollar mortgage 6 years ago. Now we owe 155,000. We refinanced our home three times . The last time with a adjustable rate mortgage. We were planning on selling but then the housing market took a dive here in Florida. So we were unable to sell and now our mortgage is up to 1,700 which includes home owners insurance, flood insurance and taxes. My mother and father-in-law has helped us alot in being able to keep the home. So we cashed out 90,ooo dollars in 6 years. The lawyer asked were all this money went. Well the whole refinance process usually costs about 5,ooo. Add in prepayment penalties which was on my first payoff etc...alot of the money went to that. Plus after the second refinance I paid off most of our credit card debt. Which at that time was about ten thousand. Plus I needed repairs on my roof.

As far as the lawyer worrying about our finances he is not. LOL He just seemed to say that based on our income we could go either way. But after I add up the numbers I think he will be surprised at how little we have.

[CindyLou]

You should see another attorney. If this attorney is suggesting a 13 given the information you have given us here on the forum then it is not adding up. You should seek additional advice.

[keepmine]

Thanks for the reply Keep. We did not always have a 1,700 dollar mortgage. We actually started with a 65,000 dollar mortgage 6 years ago. Now we owe 155,000. We refinanced our home three times . The last time with a adjustable rate mortgage. We were planning on selling but then the housing market took a dive here in Florida. So we were unable to sell and now our mortgage is up to 1,700 which includes home owners insurance, flood insurance and taxes. My mother and father-in-law has helped us alot in being able to keep the home. So we cashed out 90,ooo dollars in 6 years. The lawyer asked were all this money went. Well the whole refinance process usually costs about 5,ooo. Add in prepayment penalties which was on my first payoff etc...alot of the money went to that. Plus after the second refinance I paid off most of our credit card debt. Which at that time was about ten thousand. Plus I needed repairs on my roof.

As far as the lawyer worrying about our finances he is not. LOL He just seemed to say that based on our income we could go either way. But after I add up the numbers I think he will be surprised at how little we have.

Good lord! Part of a successful bk is refraining from making bad decisions post bk. You can't be serious about keeping a home with negative equity and a $1700/month mortgage on $500/week income.
Heck yes see another lawyer. There should be no question about a Chapter 7 here.

[whatamess]

Woah!!!

YOU are a clear Chapter 7 I'd bet. We are in NJ, and our median income is above yours I *think*, but your income is very close to ours. We make about $2,000-$3,500/month and have no mortgage or rent and are in chapter 7, no questions asked. We do have two children and are considered a family of five (for expenses) due to my elderly mother, but I doubt that makes a big difference. Like you, I have an injury & I cant collect disability but I also cant stand for more than 15-20 minutes or lift due to disc issues and a neck injury from an auto accident. I perm. nerve damage. The Dr the insurance company hired argued against my Dr and they won, I got a settlement for continued care. That was one year and five months before I filed. The lawyer said if was over a year I didnt have to disclose it. Personal injury I think is exempt up to $18,500 anyhow. See another lawyer.
Thant stinks he gambled that money away!! I would be irate.
Is it possible to give up the house? I know you need a car in FL, but can you rent cheaper or move in with family after the BK until you guys can get ahead? Thats what we did. In return I help care for and clean/cook for my mother who has her own share of health/personality issues. Its not fun, its quite awful actually but thats life.
Good luck, please let us know what happens!
WAM

[needarest]

Thanks for the replys I think I might take your advice and speak with another attorney. Right now my mother moved out of her apartment and is stayng in one of our spare bedrooms. She is giving us about a 1,ooo of her SS check every month so we can stay here. But even with that amount we still fall below the median. Plus I hate living with her. I hate to give the house up because I did dump about 30g into the home if you add in the down payment we put down plus a new roof etc.... We were hoping to be able to stay in till the real estate picks up and maybe be able to walk out with a little money. I hate to have to rent again plus with three animals it is going to be hard to find a place.

I was thinking about the 13 because of that money from my personal injury case. I wonder if I even need to diclose that since it is already closed and empty. But one of the questions asks have you closed any accounts. I hate to have my case dismissed becuase of that. Plus I think the attorney likes the 13 because it is about 1,000 dollars more to apply for that. He gave us a quote of 1,500 for Chapter 7 plus a filing fee of 300 and 2,500 for the Chapter 13 plus a 274 filing fee. Does that sound about right for what they charge?

WhataMess we used to live in NJ too. Nice state. Even though some don't think so. LOL I see you understand my dilema with my back. I did find a job working from home but I only worked for about 3 months with them. I am trying to get back in with them now. That would help also if I was making a little extra money. Working from home helped because I could rest when I needed to. I also can not stand for long periods of time. I have scoliosis, DDD, Spinal Stenosis, and Flat Back brought on by my surgery on the scoliosis. My husband makes more then 500 a week but we pay health insurance which we need. Between my back and his knee and wrist surgery. We are a mess. LOL

I will continue reading the board looking for more info. Thanks all.

[freshstart06]

Okay, are you sure you are not leaving anything out??? there is no way you could have made it with those expenses even if it just happened within a year. I don'e see how you can affore the lawyer. I know it is hard to reveal all your info on the board but if there is anything left out let us know.

but if did not leave anything out, I can see the red flags that the trustee will have. Bk has to make some sense. That is important to keep the red flags away, This situation will call in the US trustee to ask questions. Chapter 13 does not require as much investigations because base on what you said your case has a high chance of being investigated. However, you have to consider can you afford the payments. If you give up your home you will have better luck with the chapter 7 then if you keep it.

[needarest]

Well my mortgage in the first year was only 551 I believe. My husband also got annuity payments for the first like three years we were here that he had cashed out on. We recieved about 400 a month for about three years with that. Plus we refinanced several times. Plus my father in law sends us sporadic checks for 500 bucks and with my mother moving in we have some how made it. Actually right before my personal injury case went through I had to take a personal loan for 5g otherwise we were broke. Plus don't forget the credit cards that I have been using. I actually was able to pay off a majority of our credit card debt in 2003 after refinancing but we wind up running them up again. Honestly I don't know how we have made it thus far.

My mother says money always comes to me. When I only have a few dollars left something comes threw for me.

If the housing market had not increased soooo much from 2001 to 2005 and we had not been able to cash out on that equity we would have definately lost our home.

I just don't know if it would be a good idea to give up our house. I mean we have to pay to live some place and now with my mom here we are all contributing. I have a adjustable rate motgage which means I could pay a minimum payment of $979.17 or the interest only payment of $1530.93 or the fully amortized payment of 1,674.32.I have been paying the highest number. I just started doing that a few months back because my mortgage went from 145,000 to 155,000 from just paying a minimum.

So many people are losing there homes in my town it is unbelievable. Very sad actually.

But I don't see the red flags you are seeing FreshStart. I see one with me getting a settlement about a year ago and not having anything to show for it. But other then that we were just lucky to have a home that we bought for 83,000 in 2001 and by 2005 it was worth 250,000. We were able to get alot of money from our home. Which my husband used to call the cash cow. But now the cow has dried up. LOL

[freshstart06]

needarest, I completely understand what you are going through but the trustees sometimes just don't care and with all the money coming and going is going to raise a red flag. Even though it makes sense to use, the don't like to see low income people with very high debt, that can also get your case dismissed. With all that money coming and going, like the settlement and the three refinance total of $90k plus you family helping out and your mom moving in and with her help, trust me the will raise a red flag. however, you can get lucky and nothing happens too. try going to a few more lawyer and see what they say.

I know in our case I thougt we had some red flags issues but everything including the meeting we smooth so far. You just never know. Just make sure you can account for everything. YOu should have seen our final paperwork that I sent to the trustee, I had cover letters for each section with a very brief explaination for certain things I felt he my question. My info was in pink paper clips my husbands was in blue. I had lables for each section. My trustee had nothing to question by the time I finished. I even gave a brief explaination in regards to my medical condition and our high medical bills. I just use bullet format like lawyers do and kept it brief. I really think all that helped. If he needed to look for something he could just look for the tab and he would be right there. I made sure he would not have to search through my files to find anything, each section was marked by tabs. This shows you have nothing to hide.

But I hate to say this, this worked for us, it all depends on your trustee and your district