Chapter 13 Bankruptcy Question?

10-24-2007, 12:14 AM

I met with an Attorney and my income is too high to file Chapter 7. In a 13 you have to show what your disposable income is after your living expenses (plus mortgage payments) to show what you will be able to pay to the Trustee each month to go to your creditors. In my situation, I am negative $250.00 per month even being super conservative with expenses. Any ideas or insights? Can a Chapter 13 be filed and then be dismissed shortly thereafter as one has no "Disposable income" to pay the creditors versus the normal 60 month plan? Any feedback would be appreciated.

10-24-2007, 12:22 AM

my understanding of chapter 7 is if you have a high income you must pass the means test. it sounds to me like you would be able to pass the means test by the information you have shared. you might want to counsult with a different attorney. ive heard of people getting sold on a chapter 13 rather than a chapter 7 simply because the attorney makes more money on a chapter 13. read up on it before you decide to go with a chapter 13. you could save a lot of money http://www.totalbankruptcy.com/learn_about_chapter_7_bankruptcy.htm

10-24-2007, 12:43 AM

If you are single with no children and make less than $40,000 you can qualify for chapter 7...there are also things to consider...if you have a house payment, utilities.....the attorney is gonna need 6 months of paystubs to complete the means test. i would try a different attormey. what is your situation? also, bankruptcy is federal and not state to state.....just letting you know in case you didnt. the filing fees for a chapter 7 are 299.00. the attorney i work for likes filing chapter 7 unless it is close to impossible or unless you have filed chapter 7 within the past 8 years

10-24-2007, 03:04 AM

Did the attorney merely look at your income versus the median? Or did he or she actually go through every step of the means test with you? If you have a lot of secured debt you probably qualify for a chapter 7. You might want to consult with a different attorney and see what you can do.

Keep in mind, certain expenses the trustee will have an issue with, like cigarettes, cable, entertainment, internet. You have to live frugally if you do a chapter 13.

I'm not sure which attorneys out there would ACTUALLY encourage people to file a 13 when they don't have to. As a bankruptcy attorney i can tell you that payoff is much more immediate with a chapter 7 and requires less work than a 13. Many bankruptcy attorneys don't even do chapter 13s for that reason. Definitely get a second opinion though, it's unusual to not qualify for a 7 based on income.

10-24-2007, 12:14 AM	#1
Daniel Jones Guest Posts: n/a	Chapter 13 Bankruptcy Question? I met with an Attorney and my income is too high to file Chapter 7. In a 13 you have to show what your disposable income is after your living expenses (plus mortgage payments) to show what you will be able to pay to the Trustee each month to go to your creditors. In my situation, I am negative $250.00 per month even being super conservative with expenses. Any ideas or insights? Can a Chapter 13 be filed and then be dismissed shortly thereafter as one has no "Disposable income" to pay the creditors versus the normal 60 month plan? Any feedback would be appreciated.

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10-24-2007, 12:22 AM	#2
ogvictor1 Guest Posts: n/a	my understanding of chapter 7 is if you have a high income you must pass the means test. it sounds to me like you would be able to pass the means test by the information you have shared. you might want to counsult with a different attorney. ive heard of people getting sold on a chapter 13 rather than a chapter 7 simply because the attorney makes more money on a chapter 13. read up on it before you decide to go with a chapter 13. you could save a lot of money http://www.totalbankruptcy.com/learn_about_chapter_7_bankruptcy.htm

10-24-2007, 12:43 AM	#3
Fun N Sun Guest Posts: n/a	If you are single with no children and make less than $40,000 you can qualify for chapter 7...there are also things to consider...if you have a house payment, utilities.....the attorney is gonna need 6 months of paystubs to complete the means test. i would try a different attormey. what is your situation? also, bankruptcy is federal and not state to state.....just letting you know in case you didnt. the filing fees for a chapter 7 are 299.00. the attorney i work for likes filing chapter 7 unless it is close to impossible or unless you have filed chapter 7 within the past 8 years

10-24-2007, 03:04 AM	#4
Lesley Guest Posts: n/a	Did the attorney merely look at your income versus the median? Or did he or she actually go through every step of the means test with you? If you have a lot of secured debt you probably qualify for a chapter 7. You might want to consult with a different attorney and see what you can do. Keep in mind, certain expenses the trustee will have an issue with, like cigarettes, cable, entertainment, internet. You have to live frugally if you do a chapter 13. I'm not sure which attorneys out there would ACTUALLY encourage people to file a 13 when they don't have to. As a bankruptcy attorney i can tell you that payoff is much more immediate with a chapter 7 and requires less work than a 13. Many bankruptcy attorneys don't even do chapter 13s for that reason. Definitely get a second opinion though, it's unusual to not qualify for a 7 based on income.