US Trustee- Seattle area-attorney comments-need advice

I discussed my financial issues with an attorney I may consider for helping me. He told me that he has been practicing roughly 18 years, all in the Seattle area. In the last six months he has had two cases be denied, and changed to a Chapter 13. He said that the US Trustee has become much more critical of filings.

He told me that my budget basically had to have zero funds left over, after discharging my nonsecured debt, for the Trustee to accept the bankruptcy. I pay 1500/month to credit debt. So in essence, it appears I need to be running a 1500/month deficit to get an OK. This would leave nothing for any emergencies.

I have not yet met with him but it concerns me that my financial problems will not be resolved, and I will continue to struggle to make ends meet.

Can someone tell me if this sounds reasonable, or is he just painting an ugly picture??

Part of the problem, in my opinion, is that the trustee is rewarded for the chapter 13 with higher fees. Seems like a blatant conflict of interest to me.

[Ladynred]

If you are forced to convert to a Chapter 13, then you STILL won't have anything for emergencies. Any 'disposable' income left over after your normal expenses are paid will be taken by the trustee and distributed to your creditors.

It might be a good idea to take a good, long, look at your monthly expenses, including house and car payments. If it were me, I'd be generous to myself where certain things are concerned. Are you sure you're picking up all you can in expenses to lower that income to expense ratio ? Can you even get close to a break-even point ?

Just some thoughts...

I'm not sure I quite understand what you mean? So are you saying I've left things out of my budget, and this could potentially mean that if i do a chap 13, I'm standing on a slippery slope, ready to fall again? I guess I've become so good at juggling things, and making ends meet, sort of, that to actually have a viable budget is a strange concept.

Please be a bit more specific, or basic, for the simple of mind (me).

thanks,

john

[Ladynred]

Sorry, let me try again.

I'm not necessarily saying you've left anything out of your budget. What I was trying to suggest is that you might want to 'pad' your expenses to reduce the amount of disposable income that a trustee would see. I don't want to make it sound like I'm suggesting anything shady here.. how is the trustee going to argue with you about how much you spend on groceries ? I know some weeks it costs me much more for groceries than others, particularly when I have to replenish staples and other consumables that you don't buy every week, if you get my drift

As for the 'slippery slope' you mentioned, let me just say this based on what I've learned in these forums and in reading about BK for myself.

Chapter 13 can be VERY harsh, they basically leave you with NOTHING. There will be NO room for emergencies of any kind. If your car's transmission dies or the diswasher quits, be prepared to go begging the trustee to allow you the money to fix and/or replace them.

Its my understanding that in Chapter 13 they use some Federal 'guidelines' for expenses that are just not realistic in today's economy. Too many people end up converting to Chapter 7 because they just can't make it on 'the plan'. Yours may not be that type of case.