I am contemplating filing for bankruptcy because I am being sued by a loan company. I have about $50,000 in unsecured debt, a mortgage and another property in another state free and clear (family pass down to me years ago). Anyway to make a long story short, bills starting piling up earlier this year - 2008 and I had to let this loan from a bank go into arrears. The loan on my credit report went all the way to being more than 120 days late and finally sent to the loan co's third party attorney here in California. They then filed a complaint, I hired an attorney to file the answer 30 days later and 2 months went by and now we are in the "Discovery Phase." I just answered an interrogatories with my attorney. There is a first meeting at the court in late January 2009. We have tried to settle, but the plaintiff atty. did not want to accept my offer. They countered with something ridiculous that I could not afford which is why I am thinking of just filing for BK - more than likely a Ch 13 so I can keep my property. My attorney told me if they went all the way to a trial - the judge may schedule it way into next summer 2009! (Could it take that long from the time they first filed their complaint in July 2008? Seems like a long time for a trial.) 
Personally, I know I will lose this case since there is no way I can accept their counteroffer at this point and I know it was a breach of contract. My only option to to file and get rid of the case and a possible judgement - which would lead to possible garnishments or a lien on my bank accounts. If that happened, I am SOL.
I've already spoken to 2 bk attys. and they told me when I am ready to come back and they can start the bk process. My question here then is:
I am waiting to go to the first meeting in the superior court in my town in Jan 2009, and see when the judge sets a trial date or if we will mediate first.
Q: Should I let this case drag on and risk me paying more for "their" atty fees or should I just bite the bullet and file ASAP to stop the lawsuit and let the bk court decide how much they will get paid.
One other question: Are plaintiff atty. fees in my lawsuit added to my bk papers? OR will the bk judge tell me all I have to pay is the actual loan I owed?
Thanks in advance.
***I just got my pre-bankruptcy certificate (good for 6 months) from the co. I signed up with online. I did speak with a bk counselor as well. He just said to take this certificate to my atty when it is time to dive in to bk.
Personally, I know I will lose this case since there is no way I can accept their counteroffer at this point and I know it was a breach of contract. My only option to to file and get rid of the case and a possible judgement - which would lead to possible garnishments or a lien on my bank accounts. If that happened, I am SOL.
I've already spoken to 2 bk attys. and they told me when I am ready to come back and they can start the bk process. My question here then is:
I am waiting to go to the first meeting in the superior court in my town in Jan 2009, and see when the judge sets a trial date or if we will mediate first.
Q: Should I let this case drag on and risk me paying more for "their" atty fees or should I just bite the bullet and file ASAP to stop the lawsuit and let the bk court decide how much they will get paid.
One other question: Are plaintiff atty. fees in my lawsuit added to my bk papers? OR will the bk judge tell me all I have to pay is the actual loan I owed?
Thanks in advance.
***I just got my pre-bankruptcy certificate (good for 6 months) from the co. I signed up with online. I did speak with a bk counselor as well. He just said to take this certificate to my atty when it is time to dive in to bk.
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