What just happened? Were we lied to?

[Anonymous]

I'm re-reading your original post here . . . did the lawyer you saw only take your rent and verizon/directtv/etc bills into the equation on your means test?

What about utilities, car payments, car insurance, food, clothing, laundry, child care, etc.? 

[Anonymous]

Just want to reiterate ... you really need to speak with a few more attorneys.

What I would do is really understand the means test, what can be included, what can’t be included, etc. Look to see if there’s anything that should be included that you may not have. For example, do you take care of a disabled family member? If so, that cost may be included in the means test calculation.

I haven’t looked at the calculations recently, so don’t quote me on this. But I would be prepared to go with a printout of what YOU think it is (especially if you can calculate yourself qualifying for a CH7), to a few more attorneys. Make sure you stress that you are trying to qualify for CH7, and ensure that every stone has been unturned in coming up with the calculation.

Attorneys are not likely to want to spend hours calculating this for you during a free, initial consultation, but if you have most of the legwork done, you may be able to get help with that during the consult. Also remember that the means test calculations are not the same as the calculations performed when creating a CH13 repayment plan. For example, I don’t believe Netflix is factored in the means test, whereas there is some allowance for entertainment in a CH13 repayment plan (again, I haven’t looked at these calculations in a long time).

I, too, was told I did not qualify for a CH7 by an attorney. He spent almost no time evaluating my case. I had to correct him on what state’s exemptions applied to my case. I ended up going with a different attorney – not because she said I did qualify… I went with her because she actually took the time to look at my case and was honest about what she had to research. She charged me $1,000 more than other CH7 attorneys. But if I compare that to what I would have paid if I went with the first guy who suggested a CH13 plan, I actually saved tens of thousands of dollars by not having $42,000 in repayments on a CH13 plan.

If you don't qualify for a CH7 filing, you still want to work with an attorney that will get you a CH13 plan that will be approved ... one where you don't pay an unaffordable amount. The more experienced the attorney, the more likely he/she will know what types of expenses will get approved.

[Anonymous]

You MAY be able to get a payment plan for a chapter 7. I assumed I'd need to get all the money together but my lawyer (who came recommended from other people around me) charged $1300 and takes $770 up front and then monthly payments of $100 until it's paid off. HUGE relief. The area I live in has costs on the lower side of things so most will probably have to pay more but I just wanted to say some may have a little wiggle room.

[princessminor]

He had us fill out an intake form and on it listed our expenses.  We don't have car payment, 2001 Lexus and 2005 Nissan long been paid off.  No child care, and no home.  Just like our taxes, we don't have much to write off.  Geico is paid quarterly so that comes to $220 monthly.  Not sure if we can include our parents cards, but they do exsist and we do pay them, so not sure how that will work into the equation.  

[princessminor]

I found a calculator online and I plugged in all the info and it came back over by $21,692 for NY.  Gotta document everything that we pay and see what the next attorney advises.  I would love to just work this all away myself, but when every month you have to use the cards to pay for the utilities, I don't see how we can do this by ourselves.

[princessminor]

The payment plan was for the lawyer fees correct, not the payment plan for the cards.  If we stopped paying, we could pay the lawyer without any problems.  The thing is that I can't stop paying before we get the case into the system.  I just don't want to deal with the calling and seeing the black marks on the credit report.  If I can pay up untili the lawyer says stop paying, I prefer to do that.  Then I have two cards that I can pay off this month because they are under $300 (3 paychecks this month).  Not sure if I pay them off will this be a problem.  Just two more out of the way.

[princessminor]

So get this.  The 10 min laywer just called me and told me that we could sue the collection company for $1000.  He said the wording will allow us to do this.  I guess the 10 min for us was nothing for him.  Didn't even know he looked at the papers that intently.  

[Anonymous]

For the fun of asking -- why did he say you could sue? What did the collections company do wrong (I'm assuming there's a claim of a FDCPA violation).

On another note I forgot to make while at work: Once you have decided to file bankruptcy, you really should stop paying your creditors ... especially if you don't have enough money to pay your attorney. Good attorneys typically will not file your petition until they are paid in full. I have seen CH7 cases where the attorney's payment plan was questioned, and heard of cases where they payment plan was discharged. So if I were a bankruptcy attorney, I certainly would not create a debt (the payment plan) that the bankruptcy case will simply discharge. What many attorneys do is take money down to "start" your case, but will not actually file it in court until they are fully paid. So if you need 3 months to save up for their fee, that's an option.

Another reason you don't want to pay off cards selectively is because preferential payments (e.g. choosing to pay off Bank of America while applying no payments to Capital One) may be reversed. The idea is that the panel trustee recovers funds that you unfairly/improperly/illegally transferred, and an attempt to re-distribute to your creditors on a more fair, pro-rata basis. So paying off one card may end up working against you. If you insist on making payments, research "bankruptcy preferential payments" first.

[morgan320i]

New lawyer ! wife just finished her 7 with a household income over 120k and median state income of 50k for means and less bills then you guys

[Maria80386]

Take the max reasonable your lawyer allows. Showing negative on the means test is fine. I was -3600 on it due to my proven, ongoing, medical bills. Then we corrected the income and I meet it on income alone, so the schedules show the huge medical bills. I have to talk to my current provider today to see if I can charity care, or payment plan them vs. losing treatment.