Forced into 13...

[JaiJaiW]

We were over median but at the end of the form ended up being able to choose "presumption does not arise". Actual expenses ended up with the same "presumption does not arise".

BUT, got a call from the US Trustee and she said that either we need to convert to a Chapter 13 or they will dismiss. She said the anylyst went over the figures and they would not accept some of them. Her actual statement was "You can't buy a $1000.00 hat and call it a necessary expense". I have NO idea what she was alluding to as unnecessary. It reflected our true out of pocket expenses. She refused to allow me to prove the expenses.

I'm not sure what to do next. Obviously we'll have to file a 13 but I'm not sure how to handle that on my own. I guess my first step is to have them tell me exactly what they are not allowing of my expenses so when I fill out the B22C I'll know what to leave off.

How are my secured loans going to work with a 13? My camper is current and our truck loan is close to current. Mortgage and HELOC are both current.We had reafffirmation agreements filed for the truck and camper. Should I stop paying my payments on truck and camper until we convert and start the chapter 13 payments?

Sorry about all the questions but I"m at a loss and not sure where to go next.

Thanks in advance for any words of wisdom or advise!

Jaimie

[HHM]

Mistake #1, going pro se while over median. And as you can see, it is now blowing up in your face. That $2,000 you thought you were saving in attorneys fees is now either going to result in a very expensive chapter 13 or a dismissed case where you will be at the mercy of your creditors, again.

What to do now: Unfortunately, few attorneys will jump into an already filed case.

The U.S. Trustee must still FILE a motion to Dismiss and Convert with the court. You can Oppose that motion and allow the judge to make a determination. The U.S. Trustee IS NOT the decision maker. Basically, you will end up at a hearing before the judge at which point you CAN present proof of your expenses, the US Trustee will argue their position and the judge will decide.

[justbroke]

Thanks in advance for any words of wisdom or advise!

As HHM points on in a more direct manner, going pro se and being over the median, requires you to do a lot more planning and what ifs.

I went into a Chapter 13 to save some investment property, but I've given up on that. In order for me to convert, I had to run my expenses through a spreadsheet program as well as through the forms about 10 different ways, taking into account every single way the United States Trustee (UST) could attack my case. Yes, they may still attack it, and I expect it, but I planned for it.

You may have expenses on your Schedule J that the Trustee just doesn't like. Until the UST files an actual motion to dismiss, you won't have many details. The OUST (Office of the UST) really doesn't like tdealing with pro se debtors because there are issues where the debtor doesn't understand the law. So, you probably won't be able to "talk" to them. you'll just have to wait for the complaint.

You can then answer the complaint and go before the Judge and argue your case. However, you need to be arguing points of law and under what statute (State Statute or United States Code) that affords the Judge the ability to grant you the relief you request. In other words, you can't just say "but that's my expense". You must say something like "under 11 USC 707(b)(2), Congress chose to allow the IRS standards, as modified by the OUST, and not to allow actual expenses. In Rudler, In re Rudler --- F.3d ---, 2009 WL 2385469 (1st Cir. Aug, 2009), the first circuit determined..."

You are in a tough spot. You have two choices. Convert now or await the UST's motion to dismiss and then fight it. You should be making contingency plans around being in a Chapter 13. In other words, what would it be like in a Chapter 13 and whether you even want to do that. Should you choose to fight, you need to be prepared.

[JaiJaiW]

We are just going to convert, no desire to try and fight it. I spoke with the trustee many times last week and she's been more than helpful. She felt we should be able to complete the Chapter 13 on our own but also suggested several lawyers to call. I have also spoken with the Chapter 13 trustee.

Any info on what we should do with our two secured loans while working on the paperwork? I've read here in one post to quit making payments until we start making payments to the trustee. I've just started my Ch 13 research so haven't made it through all the posts yet.

Thanks again,
Jaimie

[justbroke]

We are just going to convert, no desire to try and fight it. I spoke with the trustee many times last week and she's been more than helpful. She felt we should be able to complete the Chapter 13 on our own but also suggested several lawyers to call.

This is where I disagree with the Trustee being "helpful". They are only "helpful" when you heed their "warning" and you do everything to convert. They would be less than helpful if you were to defend your position and fight their desires to force you to convert.

Any info on what we should do with our two secured loans while working on the paperwork?

Nothing. You can quit making payments and once you CONVERT, and once you are to start making plan payments, is when you start paying them.

Since you're pro se and converting, I think you're in a tougher situation. Creating a confirmable Chapter 13 Plan of Reorganization is a big deal .

[tigergem]

Too bad you filed those reaffirmation agreements. I say that because under a Chapter 13 you can cram down the valuation and interest rate for repayment, if you purchased your camper and truck more than 910 days ago. But with reaffirmation agreements already in place, I don't know how those would be affected if you convert, or if you can still do the cram down. If you knew for sure that you could do that, I would say, (probably) don't make the payments until they are paid through your plan. Because you still have the automatic stay to protect you, right? Sorry this is so complicated for you. I hope you get it all worked out ok.

[justbroke]

You can rescind the reaffirmation agreement within 60 days of filing them. So, I would rescind them, then cram down the value.

[tigergem]

You can rescind the reaffirmation agreement within 60 days of filing them. So, I would rescind them, then cram down the value.

Well that's cool. Can you do a cram down on the mortgages too? I think so, right?

[JaiJaiW]

Well that's cool. Can you do a cram down on the mortgages too? I think so, right?

The reaff's are automatically recinded when converting from what I've been told.

I was wondering the same thing on the mortgage and HELOC.....can we do a cram down? And does this mean that our house will be paid in full at the end of the 5 years? Last appraisal was at 92K, mortgage is 45K and HELOC is 30K.

[justbroke]

You cannot cramdown any mortgage which secures your primary residence. (11 USC 1322) If it were a rental, vacation or investment home, you could cram down the mortgage, but would need to pay the crammed down principal within the length of your plan.

[JaiJaiW]

Ok, great. Thanks for the info....I"m hoping my confusion clears the more I read here on the forums.

I just can't grasp that ALL of our debt including mortgage??? can be gone at the end of the 5 years.

[tigergem]

I'm guessing it will be everything EXCEPT the mortgage. I think you can arrange to pay it outside of the plan.

[HHM]

If you are going the 13 route, I would strongly recommend you go hire an attorney at this point. They will probably recommend that you allow your 7 to dismiss so they can start fresh, which is fine.

Although some people successfully do chapter 13 pro se, it really is no place for all but the truly dedicated pro se filer. Their are 3 times the amount of pit falls and issues in a chapter 13 than in a 7.

[tigergem]

I kinda sorta agree with HHM. Sort of. I mean you really have to want to get into case law and procedure to pull it off, but if you really "get it" and know your resources, I think it can be done. justbroke and I filed Chapter 13 successfully pro se, but you have to understand, my case was not really all that complicated, so don't use me as the poster child. I think jb's case was pretty complex, but jb is a lot smarter than average bear.

On the other hand, I have read some stories about some bad attorney experiences that would have driven me to drink more. So if you go that route, don't take the process of attorney selection lightly either. If I had hired an attorney, I would really want to be very hands on in the development of my plan and be highly proactive in communicating with the attorney.

[justbroke]

As a Chapter 13 pro se filer, and to even add to what our TXEB pro se filer who was able to accomplish something that people take for granted, let me add this. I think the number is that less than 50% of all Chapter 13 Plans of Reorganization even get confirmed. That's including the ones with attorneys!

A Chapter 13 Plan of Reorganization is a binding contract and not too dissimilar to a reaffirmation agreement (but different, certainly). Navigating what needs to be in the provisions can be complex if your local District doesn't use standard plans (with all the provisions in it).

I don't say this to discourage pro se filers from attempting a Chapter 13 by themselves, only to let them know the field they are playing in! I didn't understand why the "top" attorney in my District congratulated me and shook my hand, after fending off a creditor's attorney and getting confirmation. It took until later to understand that most cases don't get that far to start with... even with an attorney. Some attorney's call confirmation an "accomplishment"!

The key message to walk away with is this. If you file a Chapter 13 Reorganization as a pro se filer, then you need to dedicate many many hours of your time and devote your free time to studying caselaw, plans, and procedure in your District. This Forum can be of great help but it's no substitute for applying the law correctly for your particular State, District, and U.S. Federal Circuit