letter concerning motion to dismiss chapter 7 case

[alberta goble]

What is the name of your state? Kentucky I Have talked to Ladynred before about trying to take Chapter 7 Bankrupty. The trustee said we were not eligible for Chapter 7 because she said we have to much income after our monthly expenses. We received a letter today in the mail stating: Motion to Dismiss Chapter 7 Case. the letter reads, The tursteeasks the court to dismiss this case because: Debtors' monthly income exceeds their monthly expenses by the sum of 456.04. Debtors could easily fund a Chapter 13 plan. It will be substantially abusive to allow this case to proceed as a Chapter 7. Wherefore, Trustee requests this court to dismiss this Chapter 7 case. It also reads - This motion to dismiss will be brought on for hearing. Then it goes on to say- I certify that a true and correct copy of the foregoing Motion was served by either electronic mailing or first class mailing of same upon the U.S. Trustees Office, Debtors attorney, Debtors, and all creditors and parties in interest. Ok, so my questions are what will happen at this meeting , will my creditors who already have judgements,file for another judgement. and can the trustee force us into a Chapter 13 plan.

 

[Ladynred]

Sorry to hear that. Almost $500 in disposable income IS a lot for a Ch 7. I don't remember, do you have a lawyer ?

The hearing will be pretty cut and dried unless you do something quick. You either need to amend your expenses and get them down, or you'll need to convert to a CH 13. If the case is dismissed, the creditors will be on you like a pack of hyenas once the stay is lifted. If you have to go CH 13, at least creditors will be kept at bay.

 

[alberta goble]

concerning bankruptcy letter

Yes we do have a lawyer,but he isnt advising us very well. We paid our lawyer 500.00 dollars. plus we paid 200.00 filing fee. Now he tells us he does not do chaper 13 bankruptcys. He wont even return my calls. The trustee ask our lawyer on the day we had our bankruptcy hearing for chapter 7 if he done chapter 13 and he said , no. What do we do pay another lawyer, which we cant afford. Our only assets are a 1992 van, we have for my husbands wheelchair. and a 1995 14x50 mobile home sitting on a rented lot. If we have to go to court what can our debtors take and attach. Can they take our furniture and personal belongings. The only income we have is my husbands va compensation. I need some help here, do you have any suggestions for us. If we go into chapter 13 will they attach our 456.07 balance income? Is there any thing at all we can do about this mess. We would never have filed at all if our lawyer had of told us we could not have more than 100.00 left over, after we paid our bills. We dont know what to do. We are not dishonest people, my husband likes to trade automobiles, he is a very sick man, and I just let him trade, not realizing the circumstances. The bankruptcy debts are at least 90% car loans. Alberta

 

[Ladynred]

Unfortunately, if you are pushed into a Ch 13, you'll have to get another attorney. The upside to that is that the attorney's fees, which will be much more, can be part of your CH 13 plan.

Yes, if you end up in Ch 13, that $450 in excess disposable income WILL go to fund the payback, and it could be more than that.

I noticed I misspoke a bit in my last post. What you need to do is revisit your expenses and see if you can increase them any and get your DISPOSABLE INCOME down (not your expenses down).

Did your lawyer help you with the expense numbers at all, do any adjusting up or down or suggest anything you might have missed ?? If not, then he truly was slacking on the job. Underestimating TRUE living expenses is one of the biggest mistakes people make.

If you can chop that $450 down, you can probably save your CH 7. Go to the lawyer's office and park your butt in his office until he sees you !!

As for creditors taking your things if your 7 is dismissed - unless they have judgments they can't take squat. If they do have judgments, there are STILL limits on what they can touch, just like your BK exemptions - exemptions from judgments are often the SAME exemptions as in BK.

 

[alberta goble]

reply about bankruptcy

Ok, I have been working on our monthly expenses again. I have our remaining income balance down some. I have it down from 456.07 to 207.16. Here is what I have,would you tell me if you think this will be ok or not. I have: Food 450.00- Clothing 100.00-Home Mortgage 151.00-Electric Bill 68.00- Telephone 63.00- Cable Internet 122.00- Home Maintance (Household items) 250.00-Home repairs 100.00- Medical exp. 35.00- Transportation(Gas for Auto) 150.00- Homeowners Ins. 18.00-Life Ins 14.93- Auto Ins. 97.00- Van payments 175.00- Lot Rent 175.00- Trailer sticker 2.50-(25.00 dollars yr) Auto up keep 120.00 ( 1200.00 yr.) Taxes on Auto 31.41- Loan inst. 36.00- This a total of 2158.84.we draw 2366.00. On our bankruptcy monthly income paper we didnt list all this ( our lawyer said we had to have some money left over or we would not be able to reaffirm with anyone. Do you think this will be enough to get us thru? Any more suggestions. Does anyone go to these meetings without their attorney? Do you think we could make a better case with or without the attorney? Alberta

 

[Ladynred]

Quite frankly, I think your lawyer was off-base. If you already have the money to make the mobile home and vehicle payments, then you WILL have the money to reaffirm ? I don't get where he was coming from at all.

I noticed there are a number of things missing from your list of expenses. Things like dry cleaning, personal care, shoe repair, licensing and registration fees, bank fees (like checking fees and checks themselves).

Personal care is allowed and goes to things like hair cuts, toiletries and health aids, and cosmetics (for us ladies). Perms, if you get them, would be a normal personal care expense.

Your medical expenses, does that include perscriptions ? What about medical co-pays if you have to pay those ? Any eye glasses or contacts ? What about entertainment ? A lot wouldn't be reasonable but some is usually allowed. Long as you're not having 7-course dinners with a bottle of Dom Perignon


Have you seen this expense calculator :

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

Its defintely worth going thru that.

You could go to the 341 w/o your lawyer, people who file pro se do it all the time. I would rework your expenses and get ahold of your attorney and see if the new numbers will fly. Also find out if your lawyer is filing any kind of Answer to the Trustee's Motion to Dismiss. If you can rework your expenses, you'll need to file such an Answer and ask the court to overrule the Trustee's motion.

 

[InsulinRules]

One of the "easiest" (it's a relative term) ways to find out what your living expenses are is to simply total up what they've BEEN.

1) Start with your check and go back 1 year.

2) If you're a cash type person, look for those receipts. If you're cash type person that throws away receipts. STOP THAT! Keep.

3) Don't forget your credit card statements! Many people put groceries, clothes, etc on credit cards....and then forget that those count as expenses also.

Here's the most basic rule of thumb...if you're living hand to mouth and can't pay your bills, the money is going somewhere...you just need to account for it.

 

[alberta goble]

question about chapter 7 dismissal hearing.

ok. I need to know what if my husband and I dont go to the dismissal hearing. I talked to our attorney and he said that he wasnt going either. What he told us was that it was a simple hearing to dismissal our case, is this true? We dont have the money, to go to the meeting tomorrow and say we will pay payments to our creditors. what will the judge do if we dont show up? Please reply. Alberta

 

[Ladynred]

Nothing. The case will be dismissed and you should receive notice of it later.

 

[alberta goble]

went to meeting

I decided to go to the dismissal meeting this morning ,just to see what the judge had to say. We only had one creditor to show up. The judge overruled our creditors attorney. She was making her case to the judge and he told her that he was going to overrule her. So I guess it is over, as far as the court bankruptcy is concerned, right? He(the judge) said that this was a 707B case, what does that mean? I really appreciate your input on our case and the information that you gave to me. Thank you very much, Alberta

 

[alberta goble]

about dismissal hearing letter

I received this letter in the mail today on the "order" from the bankruptcy court judge.It reads as followed: The court having considered the Motion to Dismiss filed by the trustee, finds that the same should be and hereby is OVERRULED WITHOUT PREJUDICE. So can you tell me in simple terms what this means. I think that I know but I am not sure.(does it mean that the case is closed as far as the court is concerned?) Please reply, ladynred. Thank you, Alberta

 

[AttorneyOney]

You've squeaked by for the moment. The judge was referring to section 707(b) the Bankrupctcy Code, which is the one under which the Trustee was trying to get your case dismissed. The words "substantial abuse" sound much worse than they are. In practice, the Trustee alleges that when he thinks you have sufficient income to pay off a significant amount of your debt over the course of three years.

The court's ruling "overruled" means that, for the time being, you ch. 7 case is still alive. The "without prejudice" part means that the Trustee will be allowed to file the same motion later if additional facts come to light.

I believe that your attorney acted negligently and perhaps unethically. The very first thing I do on intake for a ch. 7 client is make sure that the disposable income is less than about $50 per month. You should immediately find another attorney. If I was that new attorney, I'd be asking the court to (at least) make the first one return the fee you paid him. I'd also be filing an amended Schedule J showing all your expenses.

As far as those expenses go, you've gotten some good advice about how to figure out where your money goes. Basically, as InsulinRules said, if you never any money left over, your expenses ought to nearly equal your income and you just have to figure out where the money is going.

No one asked you if you smoke. Do you? That would account for about $300 a month in extra expenses. Do you give your kids an allowance? Do you eat out? Travel on toll roads? Put money in the church collection? Pay union dues that don't come out of the paycheck?