Chapter 13 case gone bad.

Question

My husband and I filed chapter 13 bankruptcy in 2006. Our original attorney advised us to increase our withholding allowances so that we would not have a refund for that tax year. In 2007, I quit work because of a bad back. I was a nurse but I injured the rotator cuff and had to quit because of the pain. My income was included in the original petition. I advised our former attorney that I quit work 2 months before the plan was confirmed. He still insisted to have the plan confirmed. My husband was looking at his paystubs in October 2007 and noticed that he was not paying enough into the IRS taxes. We called, wrote emails, sent certified letters to try to contact our attorney. He never returned our calls. A grievance was brought against him in his county's bar association. We finally decided to find a new attorney. Our new attorney filed to have our court plan modified to include enough money to pay the IRS. But, the Trustee in our case filed an objection. He said that we needed to tighten our belts. We are barely paying bills now with the high cost of fuel and food. I am fed up with this bankruptcy case that I am about to have the case dismissed. Any suggestions? Thanks for any answers.

Answer 1

Bankruptcy is all in the math, and the trustee is good at it.

A trustee does not file an objection unless the law requires it.

Talk to your attorney.

Answer 2

Feeling Mutual's post is absolutely correct. Your attorney gives and "estimate" of what your plan payment is going to be, when it comes down to the confirmation, the trustee is the final decision maker on how much you pay. Sorry, but that's how the chapter 13 works. The trustees look at everything and compute the figures by your income and everything else that is required to come up with that payment amount. With the new laws now, the bankruptcy law makes it tough to file a chapter 7, and really leaves minimal amount of money to do anything in a chapter 13, other than pay the debts thru the plan. The only thing you can have your attorney do at this point would be to see if you can convert to a chapter 7, the IRS debts would still be due, and based on your information, if the trustee objected, you probably wouldn't qualify for the chapter 7. You surely could ask, all they could say is no. Having the case dismiss brings back all your debt put interest. I would suggest cutting back on things that you really don't need. I know with the economy it is tough, but...filing a chapter 13 or a chapter 7 is never a walk in the park. You can review this website....www.bcsalliance.com and read up on some information on bankruptcy, as well as www.lifeafterbankruptcy.com   Good Luck!