shoeguy

Initial consultation

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I have been lurking on the board for a few weeks now trying to learn as much as possible.

I once saw a list of things that one should take to the initial BK lawyer meeting to make it most productive. I can't seem to find it again.

could someone give me a few tips on what/how I should conduct my initial meeting/lawyer interview? They suggest I only bring a current paystub. Duh..

Thanks in advance.

Shoeguy

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Bring your last 6 months of paystubs and a list of all your creditors and amounts.

If you have a home or car you wish to keep have a realistic picture of any equity.

Have some idea of when you last used a credit card or took a cash advance. Let the lawyer know about any preference payments or insider transactions that occured in the past 12 months.

Your income is part of the equation, you also need a list of expenses. Have your monthly housing and transportation costs as well as an estimate of things like food, clothing, insurance, and entertianment.

Anything the lawyer says you don't understand be sure and ask for clarification.

Once you file, creditors will deny you access to your account via the internet. You need to print any old statements you may need now.

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Thank you Bingo,

Seems like such a daunting process to go through. Starting somewhat back at ground zero doesn't much excite me either.

I wish my situation was a little more cut and dry than it is. I still have a couple assets in both my name and my ex's eventhough I gave her them in the divorce over a year ago. I guess time for her to get moving on transferring my name off them.

Take care,

Shoeguy

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No. Don't do any transferring now just before the BK.

Talk with the attorney first.

Bring your divorce decree and the property settlement agreement with you to the BK attorney along with all the items that Bingo mentioned.

Interview several BK attorney's. They vary tremendously in their experience. Please stay away from the big BK "mill type" firms. You are better off going to a smaller shop that will give you the attention you need in a complex case.

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Denita is right. Don't do anything involving your finances.

The attorney I eventually hired sent me a form to fill out and a list of supporting documents to bring to the initial free consultation. I am soooooo glad I went.

IMHO, a lot of the on-line bankruptcy info sites don't give you the whole story and/or they try to overwhelm you with legalese. My attorney explained things in layman's terms. He was/is worth every penny.

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My meeting Friday is a firm that has only 5 attorney's in it. The partner has over 40 years experience in BK. There is only one review posted about them it was positive but still only one.

I live in a big city so there are lots of options but will stay with boutique shops instead of the large firms.

I have a budget put together with CCCS to start with and will also take pay stubs plus other records that bingo mentioned. I won't do anything about my finances until I've found a good attorney and at that point I'll foolow their advice.

Thanks and I'll keep you posted and welcome any other advice or pearls of wisdom.

Shoeguy

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Interview several BK attorney's. They vary tremendously in their experience. Please stay away from the big BK "mill type" firms. You are better off going to a smaller shop that will give you the attention you need in a complex case.

One of the "We do more filings then anyone else in the State, law firms was very much that structured sales pitch to fit you into one works best for them. Fins someone who asks questions about your situation

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Great!

(What follows is my opinion based on what I have seen and experienced in my area.) Just a little clarification for you about why I said stay away from the mill-type firms: they are good for the easy bk type that doesn't need an attorney's attention. In a mill type firm you don't get the attorney, you get a paralegal - the attorney only meets you at the beginning and signs what forms are required for the court. So if you actually need an attorney to handle your case, its tough to get to one. They have a tendency to start you in a Ch 13 right in the beginning because of the fee structure. Then when you can't complete a 13 they switch you to a 7 and they charge you again! They are working the numbers in order to support the staff to pay for those TV commericals! ...

In a small shop you actually get to an attorney and he actually manages your BK. If you have something complex your case will need that extra attention. Still attorney's vary tremendously in experience and knowledge so you have to interview until you find the right one.

I'm happy you found a small shop...after all, you appear to have a more complex case.

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One of the "We do more filings then anyone else in the State, law firms was very much that structured sales pitch to fit you into one works best for them.

IMO, attorneys who do more filings then anyone else in the State, are recognized as such by judges and trustees. Not a good thing! Get an attorney whose practice involves a few different areas of consumer law.

The attorney I hired works on a flat fee. Find someone who asks questions about your situation.

Edited by CALIF Dreamer
typo
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IMO, attorneys who do more filings then anyone else in the State, are recognized as such by judges and trustees. Not a good thing! Get an attorney whose practice involves a few different areas of consumer law.

The first part of this post I agree with. Mill operations are usually "quantity not quality" and it is quality you want. As to a firm that handles other consumer type issues, that will depend. Jack of all trades could mean master of none. Bk is not like any other legal practice. Other consumer arrears are state law based. Things that work outside of a bk (settlements that can be deemed preferential for example) may be a problem in the context of a bk.

The best way to gage a potential attny is 1) referral from folks you know 2) checking with the state bar to make sure there are no disciplinary issues 3) most importantly, interviewing more than one, two or three. Go to as many as you can. You will eventually find one you are comfortable with.

Des.

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So went to see an attorney and it seemed like a confirmation to my research/thoughts. I'm in a 13 but becasue I make a decent salary I'm in a 100% payment plan. Really 100% the stars were aligned and I made stupid decisions during my divorce and after which was mainly buying a hud home and making it livable for me and 2 daughters when they come over.

So I'm really sitting on the fence. I need to talk to another lawyer to confirm the first ones observations but if I'm at 100% repayment where does that leave me?

Should I file and be donw with it all in 5 years with only two years left on my credit report? Should I call up my creditors and see if they will cut my monthly mins and reduce my interest? I have 2 years or really lean times then my oldest turns 18 and my support goes down. Then in jan 2015 my 401k loan is finished and then in another year my second child comes off support. So I'm in a jam for about 23 months before the pressure goes down a little.

If I file that stops interest payments and other fees so I'd be out of debt faster but what types of horror stories would I encounter during that 7 years.

Do employers not hire you if I was looking for a job? What happens if I have trouble making the BK payments? How bad does bad get? My car lease is up in 2 yrs. What happens then? ugh the questions linger.

Well I'll see another attorney and see what they have to say but I know they all want you to file so they get money. Sick cycle but make sense to me.

Thanks

Shoeguy

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Should I file and be donw with it all in 5 years with only two years left on my credit report?

I can't stress enough to talk to more lawyers. I went to three separate attorneys, all had me in a 13, until I found one that told me I'm a 7. DO NOT go with this guy until you talk to more. If you're going to be paying back 100% what do you need him for? Just another debt to incur.

Isn't he supposed to be getting you out of debt??

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I agree with seeing more attorney's. He turned me off when he heard I make a little over $100K and just said "well you are definately in 13. I can take some adjustments but there isn't any point of it."

I'm tapping into some close friends to get referrals and talk to a couple more.

I'm just not convinced I should file. I'm strapped badly. Eventhough I make good money after child support, mortgage payment, 401K loan and car payment I bring home $1600. After minimums on the debt, insurance and cell phone I have $650. That is to cover utilities $150/month, food /$250?, and gas for car $150/month that leaves $100 for mysefl plus girls and doesnt include dog food or household cleaning supplies. I'm negative income after that.

So I can get a second job, sell the some items I took in the divorce etc. I'm personally at the crossroads of the decision. I need to call and negotiate better rates and lower mins with the credit cards companies. Maybe that will get me over the hump of 22 months until my oldest drops off CS. Or I can go into BK stop the interest and get a payment plan together.

My biggest fear is the hit to the credit report and some poentioal employer excludes me from a job becasue of my credit score. I also worry about something else happening and I have a BK on my record. Those are the types of things I think about. I get stuck at these passes/ decision points and I do research and think about which way to go but this time I feel a huge amount of pressure.

I have an 18 month same as cash coming due 8/24 which would take half of my emergency money of 1500. If I make the payment I save $700 in interest. I have no idea which is better to do. Make the payment and save the interest or let it pass and increase my debt by $700. Ugh.

Such is life. Thanks for listening and any input.

Shoeguy

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Shoeguy,

I am a bit confused. Are you a family of 1 or of 3? You mention 2 daughters but also mention that you pay support. If your daughters live with their mother and you have no other dependents then you are a family of 1.

Median income for a family of 1 is $41,748.00

Median income for a family of 3 is $60,219.00

If you earn in excess of $100,000.00/year the spread between your earnings and median are most likely too great for you to qualify for a 7 under means testing. Based upon this, you would be looking at a Chapter 13.

Even if a 13, you might not be a 100% repayment plan. This is where you really need to find the attny with the most experience. Proper utilization of Schedules I and J (income and expenses) should determine what gets paid to your creditors (at least it does in my jurisdiction).

If you can deal with your creditors outside the context of a bk you are better off. However, unless you can deal with all of them, settling one or two or even three is not going to help you. It just takes one to break the camel's back. And, if you are forced into a bk later down the road you just wasted whatever $$ you paid to settle a debt. This is a tough call.

You are proceeding down the correct path by investigating every option. Be cautions and make an informed, intelligent decision.

Best of luck

Des.

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Thanks Des,

I'm a family of one. My two daughters live with their mother.

I'm going to continue gathering info by talking with my creditors and with more lawyers. The first attorney said chp 13 and 100% repayment plan. He may be correct but I need more opinions on that one. I think he said 100% thinking that the creditors get all their money so they wouldn't look as closely to the budget items. Don't know but seems possible.

I figure I really just get one shot at this. But feel that the longer I wait the farther in the hole I get which in turn creates the stress.

Wow I just hope I can somehow turn this situation into a learning opportunity for my girls.

Thanks

Shoeguy

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If you earn in excess of $100,000.00/year the spread between your earnings and median are most likely too great for you to qualify for a 7 under means testing. Based upon this, you would be looking at a Chapter 13.

Even if a 13, you might not be a 100% repayment plan. This is where you really need to find the attny with the most experience. Proper utilization of Schedules I and J (income and expenses) should determine what gets paid to your creditors (at least it does in my jurisdiction).

Just a heads up, but I have clients who earn $12000-$15000/month and file a Chapter 7. They have big bills and sometimes numerous children. $5000 mortgages, $1500 month in student loans, $2500/month in daycare $1400/month in car payments, etc. One thing to consider- if your debts are primarily from business then you are means test exempt. So you just have to make I & J match within $150. That's not too difficult- it is the means test that tends to be the Chapter-defining limitation.

Just a sidenote, but a Chapter 13 payment plan is determined by the HIGHER OF: A) difference between I & J, the B) Form 22 CMI calculation, and C) (a monthly payment that provides for 100% payout for priority debts + 100% secured arrears + a payout for unsecured = to total non-exempt equity)/60.

So calculate A, B, & C, then pick the highest. That's your payment that is required to avoid objection by creditors and trustees and gets you a feasible confirmable plan.

If an attorney turns you down before even reading an intake form on your income/expenses and situation, don't use them. They're lazy and probably cherry pick easy straight Chapter 7s because they don't understand the nuances in bankruptcy.

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From reading prior posts by des, she seems to really know bk. I wasn't correcting, just adding for clarification...also I live in a high cost area. Its not uncommon for me to see mortgages in the $500k to $1,000,000 range. So we handle a lot of middle to upper income bks in our office where high income folks can make it through means testing.

As an example, I have $4400/m in mortgages, $1200/m in student loans, $2350/m in child care, a car lease for $280, $325/m for my portion of the healthcare insurance bill + about an average of $200/m in healthcare costs, and then maybe $2000/m in combined payroll and federal tax. I haven't bought groceries, put gas in my car, or paid any necessities yet and monthly "costs" are almost $11000. I could probably gross $13,000 and still qualify thanks to secured debt, student loans, and daycare. The point being that gross income is just the starting point. The devil is in the details, case by case.

I read an article a few years ago called "The Paper Tiger". It stated that only 2% of filers who want to file a Chaper 7 are prohibited by means testing. I don't know about 2%, but its definitely less than 10%.

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From reading prior posts by des, she seems to really know bk. I wasn't correcting, just adding for clarification...also I live in a high cost area. . . . So we handle a lot of middle to upper income bks in our office where high income folks can make it through means testing. . . I read an article a few years ago called "The Paper Tiger". It stated that only 2% of filers who want to file a Chapter 7 are prohibited by means testing. I don't know about 2%, but its definitely less than 10%.

First, there is never a reason to apologize if you (or anyone for that matter) see things differently than I. It is important for posters to see all the sides of the coin from all of us who deal in this area.

Second, I too handle many “high rollers” and “business cases” and, in instances, if they are a "consumer case" and have sufficient secured debt can qualify them. If not, they typically have too much debt for a 13 and end up in an 11 which is run just like the pre BAPCPA 13s. A much better alternative to a 100% Chapter 13.

Third, even the “high roller” scenario has issues. I just spent an hour trying to find the thread at bkforum . com that dealt with this - alas, to no avail. If I do find it I will update this post. Family in Michigan were forced out of a 7 (went to trial if I recall correctly) because they were living in a home where the mortgage payment was well in excess of 33% of their monthly income. It was determined to be an abuse under 707(B)(3) even though they past the means test and I&J put them in the negative.

So, jq, feel free to criticize, disagree and/or clarify any post I write. As an attny, if I feel I've been "wronged" you know I will respectfully disagree.

Des :)

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