Question Should we attend the January 13, 2012 341 meeting or delay our filing for Chapter 7?

[mauleg0615]

Okay here is our situation. My wife and I have filed for Chapter 7. We were told by our attorney that we are borderline for either a 7 or 13 but in his opinion it is about 15% the trustee will say a 13. I made quite a bit of overtime on my 6 months income but my wifes SSI does not count into the disposable income.

We have 3 cars valued $2500, $6800 and $20,000. The last two vehicles we owe combined about $5300 left on the loans. Our attorney said we will end up losing the vehicle valued at $20,000. We decided to keep the vehicle valued at $6800 because we need the second vehicle.

Our attorney said that if we didnt want to lose the large equity on the $20000 vehicle we could delay our filing for another 6 months and sell it then use the money to pay off our student loan $6600 and the IRS $2300. Then what ever is left we can use as much as we can to load up on groceries and necessities.

However, we have 2 judgements that are just waiting to garnish my wages and levy our bank accounts. Our attorney said we may buy time if we contact the creditors attorneys and see if they will accept a repayment plan and hold off on the judgements. If this can happen then we can delay our filing for another 6 months. If we dont delay and go through with the 341 meeting on Jan. 13th then we lose the $20,000, our credit score takes a farther dive because when the trustee takes the vehicle I was told it is like a repossesion. We also get stuck with the student loan and the IRS.

If we delay then I sell the vehicle, payoff the student loan and IRS, our credit score does not take a further dive and we have loads of food that can last us for awhile. Also if the creditors attorneys do not allow a repayment plan and go ahead with the judgements I may be able to use some of the money from selling the $20000 vehicle to cover the 25% they garnish from me for a few months. I am so stressed at this!!!

Anyone can help us??? What will you do? Our attorney said it was up to us. Cant decide!!! Thanks in advance to all that offer advice.

[doni49]

I'm confused. You started ythis thread by telling us that you "filed chapter 7" and if you already have a date for the 341, that gives me even more reason to believe that you've already filed.

So how do you plan to hold off on filing?

[mauleg0615]

Oh I'm sorry for not explaining that part. Our attorney said if we just don't show up at the 341 meeting then they just throw it out and we would have to start all over again in 6 months. I would have to provide him with another 6 months of income with less overtime and any other changes for the schedule I and J.

[keepsmiling]

When did your attorney tell you all this? He should have told you before you filed.

[doni49]

Also--did this atty tell you the consequences of them "just throwing it out"?

I'm pretty sure that one of them is that you lose the protection of the automatic stay (meaning that creditors will be permitted to call you after you've refiled. Plus I'd be concerned about what the trustee might think--I'd worry that they may take a closer/more thorough look at my case.

[Nicollette]

Oh I'm sorry for not explaining that part. Our attorney said if we just don't show up at the 341 meeting then they just throw it out and we would have to start all over again in 6 months. I would have to provide him with another 6 months of income with less overtime and any other changes for the schedule I and J.

I'd be scared to "not just show up" for the 341 meeting

[Drazil65]

I did not think there was an option to "not to show up" and the chp 7 is thrown out? I am thinking that maybe this decision should have beem made before the actual filing and that things might not go very smooth for you when you do actually show up for the next 341 scheduled? Good luck with this one and please let us know what happens but I think you may be buying yourself some trouble in lieu of time?

[newbie2]

Oh I'm sorry for not explaining that part. Our attorney said if we just don't show up at the 341 meeting then they just throw it out and we would have to start all over again in 6 months. I would have to provide him with another 6 months of income with less overtime and any other changes for the schedule I and J.

You need to have another talk with your attorney. The 341 meeting isn't an invitation, it's a command performance.

[despritfreya]

Your attorney, in theory, is correct and I have used this tact successfully in a few cases. If you fail to appear at the 341 the Trustee may request that the case be dismissed. However, assuming all schedules are filed, your Trustee knows that you are an asset case and that he can make a few bucks by keeping it alive. In rare instances Trustees have refused to allow the dismissal of the case if a debtor fails to attend the 341. Not likely to happen but it can.

As to the 2nd filing, the only real consequences are 1) you will have a 2nd case on your credit report (not a big deal in my book) and 2) your attorney will have to seek the extension of the automatic stay within 30 days of filing case number 2 (again, not a big deal). Of course, you still have to "qualify" for the 7.

If you believe dismissal is in your best interest than not showing up at the 341 will most likely result in that dismissal. The Trustee can also continue the hearing and if you don't show up for the next one, then seek dismissal.

Des.

[HHM]

I doubt dismissal is in your best interests, if the main issue is a means test issue, that can usually be won. It's not clear you gain any meaningful benefit by dismissing at this point...

It sounds like you were rushed to file due to judgments and garnishments, the bitter pill there is that you made that bed by letting get this bad; so the issues you have in your BK are really your own making; just let the chips fall where they may and get your fresh start.

The other problem you have with your plan is potential bad faith on the payment to the IRS and student loans. This bankruptcy filing complicates the preference issue; if you dismiss, sell the car, and pay the student loans, that is a pretty blatant act and simply waiting 3 months may not be enough to keep the trustee from getting at that money. As such, strategically, I am not sure you benefit much out of dismissal and refiling given some of the risks. Also, as desp points it, it is fairly standard practice for the trustees to dismiss for non-attendance at the 341 meeting, but they don't have too. They can keep the case open, try to administer assets, and file an Order to Show Cause for why the debtor should not be held in contempt for failure to appear.

As for the IRS, if that claim is for 2011, I would amend your current petition to include that debt (or at least a pro rated amount) so that it can be paid by the trustee. Just like how trustees go after pro rated refunds, you can claim there is a certain amount of tax debt that is owed up to the date of filing, it is a non-contingent, unliquidated claim.

[andy158]

our credit score takes a farther dive because when the trustee takes the vehicle I was told it is like a repossesion.

You will be doing a voluntary surrender of the vehicle because it is deemed an unnecessary asset since you already have two additional vehciles. I am not sure if it is viewed the same as repossession. Your credit score is tanked reguardless because of filing. Alot of people here fret about their credit score. That should be the least of your worries at this point. Your credit score will imporve over time after discharge.

[BKAttyMI]

I doubt the Trustee's here would let a case just "die" out and be dismissed when it is clear it is an asset case. Sounds like you should have thought this through a bit more before filing. The 341 is not an invitation that can be turned down in my book and a Trustee is unlikely to let an asset case go that easily.

[AngelinaCat]

You MUST attend your 341. Period. The only reasonably good excuse you can use is that you were in the hospital for emergency surgery, or you were in the Military and deployed somewhere. Someone with your Durable Family Power of Attorney, would appear on your behalf.

I once made a joke that another excuse for not attending is that you are DEAD!! While I was making a joke at the time, it really was more to drive the point home that this is A VERY IMPORTANT matter, and not to be treated lightly.

I am appalled that your attorney would advise such a thing. You need to go have a very serious talk with your attorney!

[AngelinaCat]

On further reading, as I was editing your post to make it easier to read, you have to consider the fact that you and your wife have already filed. Therefore, your property no longer belongs to you, but to the BK Estate. You have no more right to sell that vehicle now, without the trustee's blessing, than you have to over to your neighbor's yard and post a 'For Sale' sign on his car.

[tobee43]

if you do not show up, your case can be certified for dismissal. if there are assets or other questions of potential wrongdoing, the trustee could file for a Show Cause (contempt) hearing (the former is most likely). do not just skip the hearing. really, the decisions that you make now could affect your ability to get a discharge later.

you have rec'd excellent information here, i wish you the best, and do hope you have read it carefully.

again, best of luck!