Could Lawyers be abusing the new BK law?

[justbroke]

You can look up the case conversion rates yourself. The Department of Justice and several other sources (I think including the Yale Law School), publish statistics.

I think we're talking past each other at this point. If you don't qualify for a Chapter 7, you don't qualify. Now, if you're borderline and want to fight with the United State's Trustee (UST), that's fine and I'm all for that.

However, I can't sit here and say that just because several attorney say that a debtor doesn't qualify for a Chapter 7 discharge, means that they are all lying and that the debtor does qualify. In most cases, qualification is subjective, not objective.

[HHM]

No offense, you starting to sound like someone who believes the earth is flat despite the evidence to the contrary.

The fact is, most bankruptcy attorney's are conscientious and are not going to throw you under the bus. If every BK attorney in Oregon says you should be a chapter 13, then what? Or, maybe you find one that says, "no problem, you can go chapter 7", to bait and switch you (those are the attorney's that you have to watch out for). As I mentioned in your prior post, you will want an attorney that is at least honest with and says, "look, as it stands right now, you are 'probably' a chapter 13, but once we do a full analysis (not just the means test) of your case, and if it is legally feasible to file you as a chapter 7, we will."

The problem, now, however is that you seem to have your mind made up. You haven't even shared your expenses (that I am aware) on this forum to have us give a critique.

Also, give a little respect for these attorneys, they are talking to you FOR FREE. Attorney's make money based on their time and expertise. No attorney is going to do "work" for free, which seems to be what you are expecting from these "FREE" consultations. If you want a more complete analysis of your case, you will need to pay for it. Some firms will do a full case prep for a certain fee and then you pay the balance of the fee to file, but if you decide not to go through with the BK, you will out the case prep fee. I won't hazard a guess on the fee range since I am not familiar with Oregon avg. BK rates, but you can expect an attorney to charge about half his total fee to do a full prep.

[Meatstick]

HMM and Justbroke could either or both of you critic my posts in this thread.....

http://www.bkforum.com/showthread.php?t=48739

Just looking for any input either of you would care to offer.

Thanks;

Meatstick

[PacificBlue]

HHM,

I don't expect a full work up on my situation for the free visit. Only one of the lawyers out of 10 said he would champion our case for a 7, but it still may end up a 13. That is the lawyer I'm going to hire. The fact that he said he would try is good enough for me. Now, is that a bait and switch? Maybe, but I'm not so brain dead that I couldn't tell the difference.

I have used the search on here and have not found one case like mine. I have posted in other area's about a serious medical condition and how it effects the means test. There were no answers. Congress put in a clause for service men, and serious medical conditions that you can rebut the test. It warrants special conditions. When asking 9 out of 10 lawyers what that means, I got about the same lame reply. "If your too sick to work, and can't pay your bills". The truth is, they didn't know. IF they didn't know they should have just said so.

There are a couple of factors that come into play with my situation. Nine out of 10 lawyers have never filed a case with a situation like mine, but instead of actually knowing the law, and how to use it, nine of them said "got to go 13".

We are about 50k in unsecured debt. (some came from broken marriage on my wife's part and mine) The rest we used in good faith and never missed or was even late on payments. The CC companies raised the interests rate so high, it was not possible to even meet the min payment with our income.

Loss of income due to mandatory days off is cutting our pay about $800 a month. Before those two factors (CC rates going up and this) we were making it, and still had some fun money. We chose to put half of the fun money for our "nest egg", so when we retire we don't have scrape by. Not too bad of the American dream huh?

Now added to the mix I have recurring cancer. (came back about 3 months ago). According to my doctor and I quote "It's going to get you". The shots I'm on are $2,800 each and I need them every 3 months, until well.. the end. The pills I'm on are over $700 a month. And again I need them til the end. Right now we have insurance (through work) that is paying most of that. BUT, in January 1 we are forced to change health plans. (Ever shop for a health plan and use the term cancer?)

In addition to that, every 3 months I go into the hospital for a CT scan, and blood tests. Every 6 months a bone scan, and will have to til the end. If something is found I go into either radiation right away, or back into surgery. Right now I have a co-pay on all this, that is livable. In January I don't know.

should I go on, or do you already feel I have a serious medical condition that would warrant at least a hearing for a CH 7? (only being 10K over right now, but that dollar amount drops from this point on).

Are you thinking I should wait a few months and then file? I need the stress out of my life as much as I can right now. Also, my health could turn for the worst in just days. That would leave all this on my wife to do. We have no life insurance. We need to start this now get it out of the way, so we need to enjoy the life we have left together.

[PacificBlue]

I forgot to mention our assets. A 1996 chevy truck paid for. A 1987 mobile home (owning 19k on) in a retirement park. We don't own the land, we pay space rent. (non movable home, worth about 25k) That it's. Everything else we owe more then what's it's worth. (2007 SUV, and a camp trailer)

Broken marriages of years ago took all other assets. (both my wife's and mine).

[justbroke]

I have used the search on here and have not found one case like mine. I have posted in other area's about a serious medical condition and how it effects the means test. There were no answers.

I would have answered it if I saw it.

Congress put in a clause for service men, and serious medical conditions that you can rebut the test. It warrants special conditions. When asking 9 out of 10 lawyers what that means, I got about the same lame reply. "If your too sick to work, and can't pay your bills". The truth is, they didn't know. IF they didn't know they should have just said so.

I don't think you understand the Presumption of Abuse and Rebuttal! You can only rebut the presumption of abuse for medical reasons, if you have expenses that are not normally allowed in the Means Test. The attorneys you spoke to do know the law. They were trying to simplify the response for you. If they started quoting 11 USC 707(b)(2)(B)(i),

11 USC 707(b)(2)(B)(i)... to the extent such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.

So, it's not just for medical. You still have to qualify. It only allows "additional expense", not allowing you to file just because you have a medical condition.

There are a couple of factors that come into play with my situation. Nine out of 10 lawyers have never filed a case with a situation like mine, but instead of actually knowing the law, and how to use it, nine of them said "got to go 13".

I disagree, see above.

Now added to the mix I have recurring cancer. (came back about 3 months ago). According to my doctor and I quote "It's going to get you". The shots I'm on are $2,800 each and I need them every 3 months, until well.. the end. The pills I'm on are over $700 a month. And again I need them til the end. Right now we have insurance (through work) that is paying most of that. BUT, in January 1 we are forced to change health plans. (Ever shop for a health plan and use the term cancer?)

Then you can ad the cost of the medical care as a legitimate expense. If you still do not qualify (e.g. you have more than $182.50/month in disposable monthly income), then you don't qualify.

Are you thinking I should wait a few months and then file?

If that will allow any excess income to roll off, and put you under-the-median, it may be easier to glide through the process. If your income isn't changing, then I don't know why you would wait.

[fooked]

I met with 5 lawyers here in NV... the first 4 said I HAD to go 13... ummmm yeah, my 7 was filed two weeks ago

[justbroke]

I met with 5 lawyers here in NV... the first 4 said I HAD to go 13... ummmm yeah, my 7 was filed two weeks ago

Yes, you still have to find a lawyer willing to file your case (or tell them you're willing to pay their fees). Some don't want hassles, and if you go to the BK Mills, they will quickly assess you based on your income.

[momisery]

When I worked at a small care facilty doing staffing they were trying to cut their insurance costs to employees. What everyone found out was that the new care they were offering covered about nothing. People were scrabbling to find coverage and of those with existing it was impossible or too expensive. My friend an LVN found out that she could get coverage for 1800 per month but it would not cover anything that her pre-existing diabetes could cause.. l guess if she broke her leg she was safe unless they could prove her vision was going due to diabetes or she was dizzy from it?? My point is your are right.. there is nothing affordable out there ...

[PacificBlue]

So the bottom line is............... most or there are attorneys that ARE taking advantage of the new laws. I know some disagree, but in the real world "it is what it is" and putting a sugar coat on it doesn't change the meaning. You can not say with 100% certainty all Ch 13 filed HAD to be a 13. It was just easier (and more money) for the attorney to file it that way. Those attorneys should be held accountable (If caught) But then again.... who's watching them?

[justbroke]

So the bottom line is............... most or there are attorneys that ARE taking advantage of the new laws.

Prove it. There is no bottom line. Attorneys, doctors, even your plumber "takes" advantage of you. The attorneys are not taking advantage of the BAPCPA. It actually handcuffs them, as far as the law goes. Before they could put most of their clients in a Chapter 7 and have little argument and be done quickly. Now, they get a fight.

It can only be taking advantage if they make more profit from "pushing" everyone to Chapter 13s, but that's just not the case. Chatper 13s require a lot more work, and can require many more hearings. So, they work harder to make more money... so that's taking advantage?

Chapter 7 cases are usually done after the 341 Meeting!!!

I know some disagree, but in the real world "it is what it is" and putting a sugar coat on it doesn't change the meaning.

You can not say with 100% certainty all Ch 13 filed HAD to be a 13.

No one did. There are many reasons to go into Chapter 13 even though you don't "have" to. I'm a perfect example.

It was just easier (and more money) for the attorney to file it that way. Those attorneys should be held accountable (If caught) But then again.... who's watching them?

You are equating the fees to "earning" more money. An attorney's fee schedule can actually make him lose money in a Chapter 13.

Since there's no reason to keep taking about this otherwise, you should just keep finding solace in believing that the attorneys are out to gouge you. Did you know that in most Districts, the attorney fee for a Chapter 13 is called a no-look fee and is preset? That even in Chapter 7 (and Chapter 13), attorneys may need to submit fee applications to have them approved? No oversight? Hmmm...

[HHM]

Actually, many attorney's simply won't file chapter 13's because of the extra time involved. Keep in mind, in a chapter 13 (and in a chapter 7), the attorney must disclose the fee the client paid. In a chapter 13, if the attorney want's more in fees then the court typically allows (known as the no-look fee), the attorney must submit detailed billing statements. As Justbroke points out, attorney's can "charge" more for chapter 13's, but that doesn't mean a chapter 13 is more profitable. Think about it for a second, in a chapter 13, you are a client for 3-5 years, in a chapter 7, you are client for about 4 months. Alot happens in a chapter 13 after the case is filed, but any money the attorney makes in a chapter 13 is related to his time invested in the case.

Chapter 7's tend to be more profitable for attorneys, they can do more of them in a shorter period of time. However, chpa 7's are closed ended. Meaning, if anything were to happen after the case is filed, the attorney can't always opt out, so they are stuck with case. So a "difficult" chapter 7, if not charged properly, can end up not being profitable. Many attorney's are not very good business people, so I think some of the attorneys you talked too simply don't know what to charge for a difficult chapter 7 or are simply not interestred in doing a borderline chapter 7.

As justbroke points out, I think you are missing the point that chapter 13's cost more becuase MORE is actually done in a chapter 13 than in a 7. (a lot more).

[momisery]

Sorry, but are lawyers abusing the new BK laws makes me laugh.. of course some are...we have Washington full of them and look what we have going on up there all the time. There are good in bad in every profession.. more good than bad in most with maybe politics being the one exception..lol

[PacificBlue]

Okay, I'm not missing the point. I get it! There is more time put into a 13 so they can charge more. And they have to show what they charge, so they have to be some what reasonable.

You have intelligent posts, yet you come across as totally naive if you really believe that attorneys are not taking advantage of people in this situation. Either every thing you have ever come across is cut and dry, or you have no real experience in the real world.

If lawyers need to charge more for a 7 or 13 or what ever, then so be it. To push a client in the least path of resistance because there is more to do, is WRONG! You can not slice it any other way. It's wrong, it's wrong it's wrong. This is not your local butcher cutting you a roast, or giving you the more fat in your hamburger then you ordered. This is some one you are putting your well being and future into.

Personally, I think the government at this point should remove all lawyers from any kind of bankruptcy, and let each local state and city do them. The less $$$ motivated bottom feeding snakes in the grass there are, the better it is for all of us.

[DuncanLaw]

Wow, I think it is unfortunate that you have developed such a disdain for attorneys. Maybe the attorneys you have met with created that in you, maybe not. All I know is I deal with attorneys every day that do things the right way. Are there some that don't...absolutely. I'm not sure you can find a profession in the world where someone isn't trying to make an extra buck or two at the expense of the "customer".

You are right, some attorneys do take advantage of their clients. However, I can tell you that in my experience that is an incredibly small percentage. HHM and justbroke are giving you good feedback.

I wish you the best of luck with your bankruptcy and with your treatments. I understand its a lot of stress on you right now and I hope you can get beyond the financial situation to spend time with your family. Best of luck!