Chpt 7 lots of questions. Please help

[Shannon3671]

I have had a very bad year medically and wound up filing for Chapter 7 Bankruptcy on July 28th, 2017. My 341 meeting is 3 days away and I'm about to give myself an anxiety attack.

The backstory: In June of 2016 I got hurt at work. Had a broken rib that took 4 months to even start healing, damaged an intercostal nerve and wound up with 3 buldging discs in my neck. Luckily, all medical bills have been covered, but worker's comp refused to do any treatments regarding the neck though I had no previous issues or medical records showing this disc problem. While my attorney was arguing with them about treatments, I was in an automobile accident in January 2017. This worsened the neck pain, but the upside is I was able to use my own doctors and seek medical treatment for the injury. My WC atty doesn't do PI cases so I have a different atty for it and he had me taking in all of my medical bills saying he would contact everyone and request they hold off on receiving payment until the case was settled.

So, I'm using what credit I had, already going paycheck to paycheck, making minimums just to have open money to buy food, pay school lunches for the kids, etc. Had taken out a loan in hopes to keep afloat using it to keep up with payments (horrible idea) and had purchased on credit a new mattress for my daughter and a heated massage recliner for myself to help with the neck pain during the Memorial Day sales. I was also under the impression my atty for the MVA was working my case and settlement would be soon, but then my neck never wanted to get better. In June 2017, I started getting collection notices on the medical bills for the MVA. I  contacted my attorney to see what was going on and he told me just because he sends letters, doesn't mean they have to hold off and that they don't have to notify him either. Thankfully I've never had an MVA case, but then again, that also made me niave as to the process. Then I got more collection letters and repeat bills so I called one of the medical providers and was told they'd never gotten a letter. When I spoke with my attorney's secretary to see who all they'd actually sent letters to, she told me nobody! I could barely keep up with what I had and now I had collection accounts and the prospect of more comming in. Of course my atty blamed his secretary for not sending the letters out as he'd requested, but that did me no good and I'd been beating my head against a wall to keep up with payments and had no lates on any accounts. The middle of June I bit the bullet and saw an atty for the BK who told me to stop making payments. I made payments on the recently charged items because I felt bad, but after paying the atty fee for the BK had no way to keep up. When I got to the point I felt I had to lie and say my neck was better just to settle the cases and pay the creditors, risking my own health, I knew I had to file and so I did in July.

At this point AMEX is the only one has given me a 30 day late on my CRs. I have continued to make my house and car payment on time. I have been reading posts about reaffirming. I have roughly $12K in equity in it, but don't know if I should reaffirm or just keep making my payments like nothing happened. As for my car, my mother is actually the main person on the loan and I am the co-signer. It's never been late nor do I plan on it being late, but I don't know what to do with it. Ally has sent a reaffirmation agreement to my attorney and I've seen others post that if people don't reaffirm they repossess the vehicle. Can they do that if payments are current and there's still another signer on the car who's not filed BK? 

Tower Loan has already called my atty and told them if I don't pay on the mattress and recliner, they are taking them back, which is understandable though I don't know what they'll do with a mattress my daughter's slept on the last 3 months. My atty from the MVA said since the recliner is actually helping me with my neck pain he can tie it into the MVA if they'd be willing to hold off on repossessing it, but when I made the attempt to call them the other day about this, they stated that's not in their contract nor would they agree to that, so if the installments aren't made, they'll take it back. That the best they could do is for me to keep making the payments. I explained to the manager that probably wasn't going to be possible as I'd wound up in the hospital August 8th having to have an unexpected surgery on my arm where they'd had to cut part of it out and then did cultures and biopsies so I was kept there for 4 days and can't even return to work til Sept 3rd (roughly 3 weeks of no pay at that), but I'd try. Obviously I couldn't as now I have 3 upcoming checks being considerably short and 1 of them being with no pay at all! I tell you, my life the last 1+ years has been so frustrating and depressing I'll be lucky if I don't cry my eyes out at the 341 meeting when she asks how I got here. Also, the odd thing about the recliner is it was a special order so it was ordered in May with a 12 week ETA. I wound up filing in July. I called them when I filed and they said it was too late, I was already approved and couldn't file BK on a secured loan. I called the furniture store and since it was a special order, there was nothing they could do since it was already in production. It wound up being delivered after the BK was filed. I listed it in the BK and gave them notice of the BK. They still sent me a loan notice requesting payment 2 weeks after the BK was filed. 3 days ago, the listed the new loan to the credit bureaus even though they'd removed the one for the mattress. I know it's going to have to go back, but can they do the aforementioned after already having been notified of the BK?

Six Flags was also listed in the BK as I have a membership agreement with them for the kids and I that was started in March. The notification of the BK was sent to the address on their membership contract. I received notice from them on the 25th that their payment had been declined and I needed to make payment. I sent them an e-mail the same day notifying them of the BK and giving them the case number. On the 28th I received another e-mail from them about the payment being declined and stating they'd keep making attempts every couple of days until it's cleared and persue other methods if not paid so I promptly sent them another email informing them of the BK and case number. Can they just keep trying to take their payment and ignore the notfications of the BK or what else do I have to do to get them to stop? I guess bring this up to my atty or at the 341 meeting? I'm not sure.

And I'm worried because I was using the credit up til I was blindsided and had to file that the trustee is going to just throw it out, though I have e-mails to my attorney expressing my anger to find out that he'd not sent any letters to the medical providers out and the CAs are listed in the bankruptcy along with the medical providers. 

I'm so sorry this is so long. I just feel like I can't catch a break for anything and that this 341 meeting is going to be more of the same. I also don't know how long she will hold the BK open after the MVA case settles (probably 1-2 months away) since I'm sure she will take most, if not all, of it...which is okay because I'd planned on paying off bills with it anyway. 

Any help or suggestions with this is greatly appreciated.

Thank you.

[Dalmus]

First, take a breath.   BK7 is hard enough on its own, much less all the events in your life that lead up to your having to file it.

ALL your debts, including Medical, should have been included in your BK7 filing.   Even if they weren't, BK7 grants you protection from ANY debt collection activity for any debt you incurred BEFORE your petition was filed.

The mattress and reclining chair are a bit of a gray area.  You absolutely CAN file BK7 on a secured loan.  That is what your auto loan and mortgage are.  If  you included the chair and mattress in the BK7 filing, they CANNOT continue any collection activity unless the Trustee says they can.  The very act of them continuing activity after they have been provided a case number and your lawyers name can be argued as contempt of court.  If your lawyer won't do anything about it, ask the Trustee directly at your 3-4-1 meeting.   If none of your creditors care to show up at the meeting (they very rarely do), that's a big factor in your favor on the Trustee's decision.

The gray area comes in what your intentions were at the time of purchase.  If the Trustee is persuaded that you bought the chair and mattress KNOWING you would be filing BK7, she could very well allow repossession on the basis of fraud.  However, the fact that its helping with your injuries (get your doctor to write a letter stating that the chair is beneficial to your healing) and that is the express reason why you purchased it, and you did not have any intentions on filing BK7 at that time, will be taken into consideration by the Trustee.

Reaffirmation agreements are generally a bad idea, unless you are sure you won't have further financial problems after all your other debts are discharged;  you will not be able to file for bankruptcy protection again for several years, so think carefully.   How old is the car?  How much equity do you have in it?   Some finance companies will repossess automatically if there is any value to the vehicle.  Some will just let you keep paying as agreed and won't care that you filed BK7.  If the car is older and not worth much, even if you try to surrender it, they will refuse to take it.  Most mortgage companies will let you stay as long as you keep paying as agreed.  No guarantees, of course.

The Trustee is just a person... If you're in an urban/suburban area, he or she probably holds 10-20 3-4-1 meetings a day.  She most likely won't go into detail on every decision that lead up to your filing.  She'll just want the basics if she has any questions.  "I see here you opened a loan in May at a furniture store.  Why did you do that and then file BK7 two months later?"

Be respectful, and be honest.  Don't volunteer more information that she asks for.  Ask her questions about *specific*  concerns if you don't feel your lawyer adequately addressed them with you.  The Trustee has a LOT of power, but they aren't monsters.

Good luck, and let us know how it went!  I hope that you'll find it was a relief and a huge weight lifted from your shoulders afterwards!

[Shannon3671]

Thank you for your response. 

With regard to the the car. If it were just me I would let it go. It's a 2015 and it's upside down $5K. My real concern with it, is that my mother is the main loan holder and I am the co borrower. I've read posts where Ally attempts to take the car back if you don't reaffirm even if your intentions are to continue making payments. Per the contract, it states that if anyone defaults on the loan, they can take any action they deem necessary to any of the borrowers. It also has in the contract that they can even decide on their own if they will get future payments and if they feel for whatever reason they won't, they can consider that default too. So I'm worried if I don't reaffirm and even continue to make payments that they may decide to go after my mom for full payment or repo it and ding her credit, instead of allowing the monthly payments agreed upon to continue just because I, as the co borrower, file BK.

I will take the information regarding the recliner to the 341 meeting. While I see it completely fair they repo the items, I don't understand them sending me payment due notices 3 weeks after the BK was filed or posting it to the credit agencies almost a full month after the BK was filed. I guess if I look at it from the perspective that it's accurate information that the loan was taken out then, at least that part makes sense, just not the sending me payment notice after they've already received notice it was included in the BK.

As for Six Flags, I finally got a response back from them this morning. They said they don't have the ability to remove the computer generated withdrawls and payment requests and until the BK information makes it into the right hands, I should expect to continue to receive them. I guess I will have to print that out and take it to the meeting too.

I know they're not a monster and she probably does deal with these all day long because I have to go to St. Louis, about 1 1/2 hours away, for the meeting. I guess more than anything I just feel really bad for being in this position in the first place and putting my creditors in this position and I know a rebuild is going to be so hard because it's not just the medical, it's Synchrony, Citi, Cap 1, Cred 1, Commenity, Barclay, AMEX, big players who are going to hate me after. I'll probably get some huge crying from laughter emoji pop up on my screen if I ever go to app one of them, but I do want to refi the house as soon as I can with a standard loan and get out from under the FHA and their horrible PMI once I can get the house under 80/20. That's almost an extra $100 a month of my payment..*sigh*.

I will try to limit my responses as you suggested..obviously...I ramble and it's even worse when I'm nervous. Sorry.

Thank you again and have a great week.

[Dalmus]

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@Shannon3671 wrote:

I know they're not a monster and she probably does deal with these all day long because I have to go to St. Louis, about 1 1/2 hours away, for the meeting. I guess more than anything I just feel really bad for being in this position in the first place and putting my creditors in this position and I know a rebuild is going to be so hard because it's not just the medical, it's Synchrony, Citi, Cap 1, Cred 1, Commenity, Barclay, AMEX, big players who are going to hate me after. I'll probably get some huge crying from laughter emoji pop up on my screen if I ever go to app one of them, but I do want to refi the house as soon as I can with a standard loan and get out from under the FHA and their horrible PMI once I can get the house under 80/20. That's almost an extra $100 a month of my payment..*sigh*.

I will try to limit my responses as you suggested..obviously...I ramble and it's even worse when I'm nervous. Sorry.

Thank you again and have a great week.

---

 Many of us here at MyFico have gone through the stress of first trying like hell to keep paying creditors well beyond the time it stopped making financial sense.  We know we ran up the debt, for good reasons or bad, and we owe the money.  Its a very difficult emotional hurdle for an otherwise good and responsible person to "give up" trying to do the right thing and pay back debt that you legitamately owe.   I struggled for almost two years making payments I couldn't afford, payment agreements to buy me time, etc etc.

 You're not alone by any means.  It sounds like you tried to do the right thing and fought to keep paying, even after you should have stopped.

 I can't guarantee you'll be able to keep everything you want... the BK exemption laws are so different from state to state, but anything you might lose is just Stuff.  You can rebuild and get Stuff replaced.   What will be the BEST result of the process is the peace of mind you'll have not being afraid to answer the phone for fear its a collection agency.  Not dreading the trip to the mailbox to see more collection letters threatening judgements.

 You'll get through it!

 Feel free to come and vent or cheer or whatever you need!

[Anonymous]

Oh my God, the fact that my phone doesn't blow up every 1/2 hour. And I'm not afraid to open my mail anymore. I'm not even through to my discharge and the weight is lifted. 

OP, it must have been so hard adjusting to new life with a severe injury at the same time as losing control of your finances. So many changes at once. 

I am also someone who builds things up with anxiety much much more than they need to be. It takes someone else telling me: settle down. It will work out. 

So: Settle down. It will work out. Maybe not everything completely in your favor. But you will be able to move forward in your life, and you will have a fresh start, and you will be able to manage things again. 

I think it's the lack of control that makes us freak out... but things will be back in your control with time, and work. Just take a breath and keep going. 

[Shannon3671]

I did have a strange turn of events this evening in that my atty's office for the MVA called this evening and stated that they would make payments towards the recliner til the case is settled and consider it part of my expenses so that it doesn't have to go back in the BK because the heat and massage from it really does help with the pain. I actually cried when they called and told me that because the options left ahead of me are surgery or pills for pain management and I'm not fond of having my neck cut on or having to take meds forever that usually have worse side effects than what you're trying to treat to begin with. If the chair continues to help me like it has and maybe seeing the chiroprator every once in a while works..at least for a while...I'd much rather go that route. Then I called my BK atty and let them know and they weren't as happy as I was. They were like, you know you wont get much through the exemption from the case once it's done and you want to pay practically half of it just for the chair!? I explained to them I had planned on using it to pay off bills anyway so I was never expecting to really have any of the proceeds from it to begin with so I was okay with that. I'm pretty sure they think I'm crazy and may try talking me out of it.

So that leaves me stuck now with trying to figure out whether or not to reaffirm on the house and car. I'm scared if I don't with the house that they could just pull it out from under me even if I'm current and making payments. Like I said with the car, I'm afraid they'll go after my mom even if I'm current and making payments on it. Oddly enough, my atty wont give me any direction and states they can't tell me whether I should or shouldn't reaffirm them. Ally has sent a reaffirmation for the car, but my mortgage company hasn't sent them anything even though it's been requested because I was initally going to reaffirm both until I saw posts here saying not to. 

You're right, it is nice not to have the calls, but I still feel guilty. I see your DC is set for October, so is mine. 

Thank you both for the advice and the words of encouragement. It does help.

[Shannon3671]

I had my 341 meeting yesterday. It was very short and she didn't even ask me all of the questions she asked everyone else.

As soon as she got to the point of asking about my PI case, she asked if I knew how much the medical bills were and I told her no, because well...I don't. She stated she wanted a copy of the contract with my attorney for the PI because she was claiming it, which is fine because I'd planned on paying bills with it anyway.

She then stated it looked liked there'd be available taxes next year and she'd be claiming them too. My attorney wasn't there and had someone else filling in for him. Later in the evening, my regular attorney's office called and his assistanct seemed concerned they were going that far ahead to take the taxes since this was September 1st and taxes wont even be paid out until February or March of next year (roughly 6 months away).

After she said those items would be attached to the BK, she ended all questions. There was no request for additional information or questions into what I owned. Not an additional meeting date, nothing. So I guess I'm left wondering if since she's attaching those items, will the BK still be considered discharged in October or not until sometime next year because of my taxes? How will this effect being able to start trying to rebuild and get my scores out of the 500s? Should I have to be prepared to go back at a later time? 

Sorry for all of the questions...just not sure what all of this really means going forward. Thanks for your help.

[Shannon3671]

I had my 341 meeting. It was shorter than expected. The trustee wants a copy of the contract with my personal injury attorney as she's attaching that and she wants my 2017 taxes that aren't even going to be file for another 5 months. 

My attorney wasn't with me at the hearing and had some stand in attorney there. His office did call later that evening and his assistance seemed concerned the trustee was wanting next year's taxes, but he wasn't in the office for her to even discuss it with him.

I'm not upset she's attaching them, I just don't know what this means for the discharge. It was supposed to be discharged 10/31, but if she wants next year's taxes, is that going to keep that from happening?

[Anonymous]

Who says you have to get a refund or can't change the withholding on your W-4 to cause a very small refund ?   There are many ways to  come out "even" no refund on April 15th. Yes, I am a retired member of the State CPA Society so I do know a lot about taxes.   I still teach a class at Glynco every so often about Financial fraud.    

[Shannon3671]

Thank you. I know I can exempt my federal for the rest of the year, but half my tax refund this last year was in EIC and CTC. I think she can still claim one, if not both, of them too, but I'm not sure how they could wind up at $0.

From what I've read, I think it will still discharge in October, but remain open until after I get my taxes back to her.