Forum
|
|
Forum
|
     | Saturday, October 28, 2000 - 08:17 am  Has anyone ever had/seen this situation? I had my meeting of creditors yesterday. None showed up. However, after the trustee looked through my paperwork, she made the "on record" reccomendation that the case be '707''ed. She explained to me off the record that because I show $300 more in income than expenses a month, that I should be able to pay off at least some of my debts via a ch13... She said that 707'ing it means it's sent on to the court and the court can decide whether to motion to dismiss the case, or to go ahead with the discharge. I'm assuming that 707'ing it is reserved for substantial abuse cases. I'd like to think that mine is far from that (god forbid I walk away with $300 a month to put into savings). She said there's a 25-30% chance the court will move to dismiss it... Was she blowing smoke or what? Any input would be greatly appreciated. She said I should hear something after the 60 day period for creditors to file disputes expires. Thanks, -Dave
|
| | Saturday, October 28, 2000 - 11:50 am Dave: I'm no attorney and I don't play one on TV but a Chapter 7 simply means that your debts and debt servicing are greater than your assets and servicing ability. In order for it to be dismissed these things need to occur. Here are the grounds for dismissal or 707 Sec. 707. Dismissal (a) The court may dismiss a case under this chapter only after notice and a hearing and only for cause, including - (1) unreasonable delay by the debtor that is prejudicial to creditors; (2) nonpayment of any fees or charges required under chapter 123 of title 28; and (3) failure of the debtor in a voluntary case to file, within fifteen days or such additional time as the court may allow after the filing of the petition commencing such case, the information required by paragraph (1) of section 521, but only on a motion by the United States trustee. (b) After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, …" However, you must remember several things. I will post them here for you to read the statute. Notice #6 Sec. 704. Duties of trustee The trustee shall - (1) collect and reduce to money the property of the estate for which such trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest; (2) be accountable for all property received; (3) ensure that the debtor shall perform his intention as specified in section 521(2)(B) of this title; (4) investigate the financial affairs of the debtor; (5) if a purpose would be served, examine proofs of claims and object to the allowance of any claim that is improper; (6) if advisable, oppose the discharge of the debtor; (7) unless the court orders otherwise, furnish such information concerning the estate and the estate's administration as is requested by a party in interest;" The trustee is not your friend, but more important look at #4. That was your attorney's job. He should have created a statement (accurately) that showed you could not service your debts. If you can service them then you must do a 13 or a "wage earner" plan. That's the law. BK does not allow you to stop paying debts if you can pay them under some structured plan approved by the court. Sorry, but fire your attorney. Frank
|
| | Saturday, October 28, 2000 - 12:05 pm LOL, to be honest, as everyone else here knows, I did it Pro Se. It's totally my bad. If they actually do choose to hold a hearing (She had told me that they don't always), I'm thinking that I should just hire an attorney and let him/her deal with it... it's obvious I would lose if it ever went to a hearing. My unsecured debts are around $65,000. After expenses, my residual income is around $300 a month. It seems far from reasonable to expect me to put every penny of that into a structured plan, and at $200 a month on a 60 month plan, $12,000 seems far from worth it for the courts to adminster such a plan. As an aside, what are the credit consequences of a Ch13 (if I get forced into converting it) versus a Ch7... aren't you generally better off time-wise with a 7? Thanks, -Dave
|
| | Saturday, October 28, 2000 - 12:07 pm Also, what are the credit consequences of a dismissed Ch7? Thanks, -Dave
|
| | Saturday, October 28, 2000 - 02:46 pm Dave, I totally MISSED that you were doing this pro se. Just about anyone here could have told you that you can't have any excess funds. You can't just discharge your debts because you'd rather be SAVING! I really recommend that you DO see a bankruptcy attorney ASAP. If you didn't know that you can't have excess income, there's probably other things you don't know. I've seen a number of bankruptcy budgets and it's real easy to forget stuff, maybe yours is just low and you forgot to list expenses. Ch. 13 isn't just going to cost you a lot of money, but it will ruin your credit. And I just have to know: How did you go about filing? Where did you get your info about what to do? How did you know how to prepare your budget?
|
| | Saturday, October 28, 2000 - 03:28 pm Reading, reading, and a lot of reading(two different books, and a bunch of websites). And after re-evaluating my filing, I lowballed a few expenses. I'm wondering if I can go back and amend it now so long as the amendments aren't too 'eye-raising'... I'm guessing it's too late for that, though. Ch13 ruins credit worse than 7 I'm assuming? (because of the long-term debt versus it just being discharged). If the Ch7 gets dismissed, does it get removed from my credit report? or am I completely and totally screwed now? I'm going to wait until I get notice as to whether or not they're going to '707' the case. If they do, I'll go ahead and get an attorney to represent me for that hearing. I screwed up. Apparently that's the only thing that was wrong with my filing (although it's a huge thing wrong). So, basically, 1) What does a ch13 do to credit versus a ch7? 2) Can I amend my filing to re-do my expenses sheet? Is it too late now that the 341 meeting has occured? 3) What is the effect of a dismissed ch7? Does it stay on my report, or is it just 'forgotten' about (except for by my creditors, of course)... Perhaps I can just let this happen and then refile with a lawyer. Thanks, -Dave
|
| | Saturday, October 28, 2000 - 03:44 pm I *think* the filing stays, since it is a public record. I can't believe that you read **2** books that forgot to mention that your income can't exceed your expenses. Re. Ch. 13: You can start rebuilding your credit 3 years LATER and getting any kind of credit during the repayment is extremely difficult. You need to get on the phone on MONDAY and start calling lawyers. Why would you want to jeopardize your discharge over a few hundred dollars? This isn't a game, or at least it SHOULDN'T be. You're talking about owing or NOT owing $65,000!
|
| | Saturday, October 28, 2000 - 04:11 pm I agree 100%. I'm still just wondering if I should *wait* to see if the court contests my discharge, and THEN get a lawyer, instead of chancing stirring something up by getting an over-zealous attorney NOW. Converting to a 13 isn't such a horrid thing, but is obviously my absolute last choice.
|
| | Saturday, October 28, 2000 - 08:10 pm Dave, I completely agree with Christine on this subject. You ask basically why not wait? Well because you want to be on the offensive and act proactively and not reactively when they (the court, trustee or anyone else) slap you with a requirement. Remember you are involved with a legal process and statues of limitation exist, rules must be followed (called procedures and protocol) and expertise is required. If you do things out of order or wait too long the entire case could be thrown out! Remember all that stuff you hear about "technicalities" - well that is what they are talking about. If you think for one minute that the court will let you "slip by" because you did not know or you waited too long - you are mistaken. Also, do you honestly think your creditors will let you slip by? To them it is the difference of getting some of your money or none of your money. What do you think? If you made the mistake or your attorney made the mistake, do you think they care? All they want is their money and as much of it as they can get. For the most part they probably want to screw up your credit for as long as they can also. GET ON THE PHONE MONDAY AT 8AM AND GET AN ATTORNEY! Enough said, you have already stirred up the pot and if the lawyer is over-zealous get a different lawyer. BUT LISTEN TO HER OR HIM! You already know that you don't know enough. "So, basically, 1) what does a ch13 do to credit versus a ch7?" As to what does a 13 do verses a 7 to your credit I think Christine already told you. Since she was in the business of looking at credit she is much better than I. What I do know is simple. Aside for the time differences, conversions, amounts and the filing requirements the 13 is a killer. The 13 keeps all your debts open and guess what? Remember that DTI I spoke of in my long post - well yours is off the chart if you had to file a 13. Until that ratio comes down (and it will be very tight even though lower) you won't be able to buy a cold on credit. You have already told a creditor that you can't manage the finances by filing the 13. And one very important point any prospective lender knows. With a 13 you can nearly always convert it to a 7 if the plan cannot be carried out for adverse reasons. Here is what that means. You file 13 and start paying. A new lender gives you a loan (or credit card etc). You can't make the arrangements because your company forced you to take a pay cut. Now you can't service the plan and must file a 7. Guess who is included in the new BK? You got it; the new lender and they don't like that! I think you know what you need to do to file a 7. The trustee knows only what you tell him/her. If you say you pay $50 a month for food she is not to question it but list it. If you can prove you pay $2000 a month for food (she may challenge it) but with receipts for ESSENTIALS you will get that (maybe you have 10 kids.) If you have special tools, uniforms, cleaning bills, it is listed. If you need special devices in your work (cars for salesmen, computers for programmers, pagers for doctors and the like) it is listed. You need that lawyer. But once you qualify for the 7, your debts are discharged (after the proper protocol.) To the lender your DTI is low (too low is some cases.) Now you should be able to "service" any new debt. Also there are no procedures for converting a 7 to a 13 and the time frame for filing a new 7 is extremely restrictive (however, it has been done.) So the new lender has you and knows it. You're a fair bet for repayment (at least you can't get out via BK in their eyes.) Now please don't take that to mean that there are no consequences for filing the 7. There are and they are huge. Read my long post and you can see that it takes quite a while (years) to get slightly back on track and you will spend a lot of time and money doing so. You will pay high interest as well for a long while and that 7 will almost always (correct me if I am wrong Christine) keep you out of an A paper mortgage for at least 3-4 years. I'm trying for A- now and I've been out (discharged) for 27 months. "2) Can I amend my filing to re-do my expenses sheet? Is it too late now that the 341 meeting has occurred?" HIRE AN ATTORNEY MONDAY! This is too tricky a subject for us laypersons. Maybe if you do certain things. Do them right and do them at the proper time and in the proper sequence. On that I think you need to get on the phone and off the net. While it may be possible to file a 7 pro see, to fix an improper filing takes a whole lot of work, I'm sure. "3) What is the effect of a dismissed ch7? Does it stay on my report, or is it just 'forgotten' about (except for by my creditors, of course)... Perhaps I can just let this happen and then re-file with a lawyer." No a dismissed 7 stays on your report as dismissed and is a problem for you. You signaled you wanted to file and the prospective lender knows you may fix the reason for the dismissal and get it to go. They don't know why (and don't care) it was dismissed it simply says the chapter filed, court of proper jurisprudence, date of dismissal and contact number in certain districts. It is there for 10 years in the case of a 7. You will have nearly all the negatives of a 13 with none of the benefits. GET AN ATTORNEY MONDAY! "Converting to a 13 isn't such a horrid thing, but is obviously my absolute last choice." WRONG! Christine already gave you one reason, actually 65,000 reasons. I just gave you a few credit and time line reasons as well. Get a lawyer Dave. Good luck my friend, Frank
|
| | Saturday, October 28, 2000 - 11:38 pm I just want to add that Dave doesn't necessarily have to HIRE a lawyer on Monday. It's important to get started right away though. Lawyers don't usually just sit there waiting for your call. It took me weeks to find a lawyer to form the BayHouse L.L.C. Never thought it would be so difficult. But I had to wait for lawyers to call me back and first I wasted a lot of time and money on that prepaid legal service. I sure was glad when I found someone who appeared intelligent and interested. Some of these lawyers were just plain rude. Once you explain your situation to a few attorneys you'll know how much time you got. Set up some appointments, most attorneys offer free initial consultations. But try to talk to the attorney on the phone before setting up an appointment, save yourself some time. Ask what it will cost and what they'll do. It's VERY likely that Dave doesn't realize how high his expenses are. Almost all people (including myself) underestimate how much money they spend. Which is of course the reason WHY so many people overextend themselves. You don't really notice where the money goes when you use credit cards, and especially several cards. In the Transamerica case I had no problem getting the Ch. 13 converted to a 7. The attorney was well respected and he was really screwing up. The trustee seemed very reasonable, and it was VERY clear that my client was totally clueless and financially illiterate. I don't remember about filings, paperwork and HOW the budget was amended, that was the attorney's job.
|
| | Sunday, October 29, 2000 - 05:17 am Ok ok ok ok! I get the point :-). I'll start looking into it on Monday. I've also posed the question on exp.com, and I'll start calling around on Monday. God, I screwed this one up. -Dave
|
| | Thursday, November 02, 2000 - 08:53 am Good news, to those who care. My case is now reflecting "Awaiting discharge" in the VCIS system. It seems as though the judge didn't feel as though it warranted a 707 and didn't pursue requesting a hearing. I've got a couple of leads on lawyers just in case, but unless I hear anything different, I'm just going to wait it out and not start calling around. Thanks for everyones help. -Dave
|
| | Thursday, November 02, 2000 - 05:21 pm It's good to know that this all worked out well for you but let this stand as a warning to others. No one is trying to say don't handle your own accounting/legal/car repair/whatever. Just make sure you know what you're doing and you make no mistakes. It's cheaper to do it right the first time than to screw it up and have to pay for an attorney to come through and fix your mistakes.
|
| | Saturday, November 04, 2000 - 05:18 am I'm very glad that this worked out for Dave, with LOTS of luck!
|
| | Thursday, November 16, 2000 - 06:06 am I had a thought. Perhaps the judge decided to not 707 it because of my aggressive reaffirmations? Sure, I had a $350 surplus of income a month. However, I chose to reaffirm one account with a $3000 balance and another with a $1200 balance. Anyone have any idea if reaff's fit into the criteria for 707's? Just curious at this point.
|
| | Thursday, November 16, 2000 - 11:29 am No, it does not fit. But anything is possible. I think that it is far more likely that the trustee never filed the motion. Trustee's get busy and they have to prioritize. And your case is not as egregious as most others. While it may be the trustee's responsibility to object to potentially bad faith chapter 7 filings, he/she would have to be aware that $350 in apparent disposable income is not conclusive bad faith. That $350 might have been easily remedied by an amendment to your statement of monthly expenses. Further, a trustee can put money in his/her own pocket by fighting other things. I do not see how fighting you would have created financial gain for the trustee. Only creditors might have gained. I feel that you escaped harm because you probably did not really have excess disposable income, and the trustee's laziness (or practicality) and desire for financial gain militated against pursuing the §707 action. But you should still consider yourself lucky that you did not have a nasty trustee.
|
| | Thursday, November 16, 2000 - 03:30 pm Mitch, Any idea how I would amend them, anyways? I figure I might as well, just in case. She still has 25 days or so left that she could technically 707 it. It's looking like she's not going to, but I guess it's stlil technically possible. Is it just done in the form of a letter? Thanks, Dave
|
| | Friday, November 17, 2000 - 02:11 am Dave here you go again! You escaped the first time, do you realy want to chance your NARROW miss on NON PROFESSIONAL ADVICE! If you must ask this board, then you need to ask someone you can absolutly trust to give you proper legal advice. Otherwise just throw the dime on the ground. Heads file a letter, tails get a form. If it lands on the edge use Excel spreadsheets and if it stays in the air forget about it:-) Dave you would really be prudent to spend a few bucks (some attorneys give 30 minutes free consultation) and get proper professional advice. At least if the lawyer screws up you can fire him/her or sue him/her. Frank
|
| | Friday, November 17, 2000 - 02:42 am I've talked to about five at this point. They all want to be retained to help me with this (at at least $100/hour) with different minimums. As I've narrowly escaped, I'll just let sleeping dogs lie for now. I was merely pointing out that I suppose the trustee still has 25 days or so that she *could* 707 the case, though from the sounds of it, she just passed my case on (the clerk tells me the case is flagged as "awaiting the judge's discharge order" I'm just curious, really, as I said above. Whether or not I'd do it probably has something to do with the alignment of the stars. Very similar to our Presidential race :-) -Dave
|
| | Friday, November 17, 2000 - 07:45 am It is a tactical decision as to whether or not you should amend. It depends a lot on your particular facts, which are not throughly explained in your post (don't bother to try since you would not know what the relevant facts are). It would also depend on how things are done in your jurisdiction, and with that particular trustee. As suggested above, one should never be exclusively concerned with saving money when it comes to hiring pilots, doctors or attorneys. The problem with a no brainer like filing an amendment is that even if it is unnecessary, an attorney might see it as an opportunity to hit you up for fees. No guilt on the attorney's part because it they would only be cheating you for a small amount of money. That being said, I would personally try to find some attorneys who give free consults and have them explain why they feel you should or should not amend. The more attorneys that you speak to, the better you will be able to tell which attorneys know what they are talking about. Given the incompetence of attorneys, I would never trust the opinion of one, even if I was paying a lot of money. My opinion is that the advice of 3 free attorneys (as long as they give you a little time) is better than the advice of 1 well-paid attorney. As to the form of amendments, in my jurisdiction there is a local form provided by the court. This, in turn, accompanies new schedules with the amended information. Your jurisdiction might do it in any number of ways.
|
Credit Forum CreditCourt Forum 2003 Credit Suit CreditFactors Order Credit Reports |