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Filing bankruptcy after being served court summons


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Please bear with me, I'm new here and the clock is ticking on this case. My husband is being sued by a JDB and was served a summons 2 weeks ago. Due to this and several other issues, we have decided to file bankruptcy. He received a call from the attorneys representing the JDB a week ago but he didn't answer the phone. He hasn't returned their call because he was unsure if that was the right thing to do. We received a letter from them yesterday stating that he can call them to "resolve this situation amicably". I know what that means and told him to not do it. So my question is, does he call them and tell them he has filed bankruptcy? He only has 30 days to answer the summons and he doesn't meet with our lawyer again for 5 more days (22 days after summons was served). There's a slight possibility that he won't be able to have these debts discharged through Chapter 7 but we won't know that until he meets with the lawyer. I don't want him to ignore the summons and end up having these sleaze balls win by default, but I also don't want him to file unnecessary paperwork with the court if the bankruptcy is going to take care of it all.

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The simplest solution to this issue would be to file an Answer to the Summons/Complaint along with a fee waiver.  That way you will have complied to the law suit requirements and ensuring that it won't go into default with a judgment on your record in addition. That will hold them off until discovery begins and that could be months. By that time you will have all the paperwork filed with your BK attorney and he can take the communications with the opposing attorney from there. 

 

Just post your complaint here with your name redacted and round up the amounts to the next thousand and posters on this forum can help you compile your answer and respond to the complaint. Then file your answer with the court within the time period specified in the summons. 

 

HP

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@daydreamer77

 

The filing of bankruptcy will immediately stop all actions the second you file, including any pending lawsuits.   I just went through BK and had two pending lawsuits that were toast once the BK was filed.  I received my discharge on 10/28 and things have never been better.

 

Feel free to PM me if you have any questions / concerns on filing BK.   Also, check the BK forum, as there is wealth of info there and experiences from other members of this board.

 

Good luck!

 

P954

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Why do you believe there is a chance the debt won't be discharged?

Just by a few things the attorney said. He seems to think we won't pass the means test since we don't have any major expenses (no car loan or mortgage). A family member owns the home we live in and we pay a small amount of rent to them. I know we are just below the median income for our state, but he said for the 6 month average we may be slightly over. We didn't have the 6 months of check stubs when he met with the attorney so this is based on the few we provided. We have since taken care of that so I'm hoping to know more on Friday. If I find out something before then, I'll be sure to post. I need all the help I can get and you guys have been great.

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@daydreamer77

 

The filing of bankruptcy will immediately stop all actions the second you file, including any pending lawsuits.   I just went through BK and had two pending lawsuits that were toast once the BK was filed.  I received my discharge on 10/28 and things have never been better.

 

Feel free to PM me if you have any questions / concerns on filing BK.   Also, check the BK forum, as there is wealth of info there and experiences from other members of this board.

 

Good luck!

 

P954

Thank you so much! I'm checking out the BK forum right now.

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Just by a few things the attorney said. He seems to think we won't pass the means test since we don't have any major expenses (no car loan or mortgage). A family member owns the home we live in and we pay a small amount of rent to them. I know we are just below the median income for our state, but he said for the 6 month average we may be slightly over. We didn't have the 6 months of check stubs when he met with the attorney so this is based on the few we provided. We have since taken care of that so I'm hoping to know more on Friday. If I find out something before then, I'll be sure to post. I need all the help I can get and you guys have been great.

Even you go Chapter 13, the debt remaining at the end of the plan will be discharged.  Plans are either 36 or 60 months, depending on your disposable income remaining after expenses.  If you are below, then your plan will most likely be 36 months.  Your attorney will advise you of this.

 

Do remember that fees that attorneys charge for a chapter 13 are usually higher and if you can get your Means test to work, you should get a Chapter 7 BK filing, as that will save you quite a bit on attorney's fees.

 

Just FYI.... I make good money and got filed under a Chapter 7 (passed the Means Test).   If your attorney knows how to handle the means test and you are saying that you are close, then they may very well be able to get you a Chapter 7 - no asset filing.   I would press for this.  

 

Did you check with more than one attorney?  If not, then I would recommend that you.   I had back taxes owed to the IRS and had 2 of the 3 attorneys I met with tell me that I wouldn't be able to get those discharged.  I managed to find that one attorney who knew the criteria of getting back taxes owed discharged.    It is just that the attorney usually has to know what they are doing when it comes to special circumstances to make things happen.   This is why consulting with a few attorneys is a good idea, especially since you are so close to passing the Means Test.

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Even you go Chapter 13, the debt remaining at the end of the plan will be discharged.  Plans are either 36 or 60 months, depending on your disposable income remaining after expenses.  If you are below, then your plan will most likely be 36 months.  Your attorney will advise you of this.

 

Do remember that fees that attorneys charge for a chapter 13 are usually higher and if you can get your Means test to work, you should get a Chapter 7 BK filing, as that will save you quite a bit on attorney's fees.

 

Just FYI.... I make good money and got filed under a Chapter 7 (passed the Means Test).   If your attorney knows how to handle the means test and you are saying that you are close, then they may very well be able to get you a Chapter 7 - no asset filing.   I would press for this.  

 

Did you check with more than one attorney?  If not, then I would recommend that you.   I had back taxes owed to the IRS and had 2 of the 3 attorneys I met with tell me that I wouldn't be able to get those discharged.  I managed to find that one attorney who knew the criteria of getting back taxes owed discharged.    It is just that the attorney usually has to know what they are doing when it comes to special circumstances to make things happen.   This is why consulting with a few attorneys is a good idea, especially since you are so close to passing the Means Test.

He said the overage may be small enough to not make a difference (likely around $1000) so we *should* be fine. I'm just such a pessimist because things rarely work in our favor. We didn't consult any other attorneys, only because this one is highly recommended in our area and was used by another family member. I may PM you later after I gather more information.

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He said the overage may be small enough to not make a difference (likely around $1000) so we *should* be fine. I'm just such a pessimist because things rarely work in our favor. We didn't consult any other attorneys, only because this one is highly recommended in our area and was used by another family member. I may PM you later after I gather more information.

@daydreamer77

 

The overage, from what my attorney advised, is better to be a bit over than being significantly under.   When too far under, this usually sets you up for an audit or challenge by the US Trustee as to potential abuse.  Of course, districts do vary and honestly, so does the relationship that attorneys have with the various trustees.   If your attorney has practiced in the BK court in your district, then chances are he/she is very familiar with all the trustees and will know how to handle the filing of BK cases.

 

Feel free to PM if you would like.   Happy to help.

 

P954

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Just by a few things the attorney said. He seems to think we won't pass the means test since we don't have any major expenses (no car loan or mortgage). A family member owns the home we live in and we pay a small amount of rent to them. I know we are just below the median income for our state, but he said for the 6 month average we may be slightly over. We didn't have the 6 months of check stubs when he met with the attorney so this is based on the few we provided. We have since taken care of that so I'm hoping to know more on Friday. If I find out something before then, I'll be sure to post. I need all the help I can get and you guys have been great.

The means test is just step 1.That's where you are over/under the median income for your sttae.

Youstill must fill out schedules I and J to determine if you have monthly disposable income to fund a Chapter 13. That's what your lawyer was talking about when he mentioned expenses.

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