Adversary Proceeding

[VaUnicorn]

What is the name of your state? Virginia
I am preparing all of my information to file a Chapter 7 bankruptcy and would like to know if it is possible to file an Adversary Proceeding as a Pro Se Debtor. Thanks to two hurricanes in under a year, combined GROSS income for my husband and I has dropped to 24k per year.

A bit of quick background here: we have been in business for ourselves for three years and it looked like we were moving up. Hurricane Isabel hurt us quite badly (no power=no computers for 11 days=very unhappy clients). We only actually lost one client at that time. However, hurricane Gaston got us again, and we lost several clients, totalling 2k per month gross. We have applied for FEMA/SBA assistance, but since all credit is based on our personal credit, the SBA loan people will probably have a good laugh when they get the application.

As for the bankruptcy, we only owe about $4000 in medical bills, one old credit card that we had both forgotten until a copy of our credit reports was obtained and the kicker....over $100,000 (between both of us) in Federal student loans. And no, neither of us finished our degrees, that's why we aren't making more money!

We would like to be able to try to build our business back up and some day buy a house, but with that over our heads, there's no way. Also, with a monthly gross of about $1000 currently, there is no way we can afford the $2500 the lawyer we consulted quoted us. If the judge doesn't grant us a hardship discharge, is it possible to request that he set a monthly payment amount that they have to accept? Right now they are saying they want $4000 down and $1200/month for a year to take them out of default status on our credit reports. SURE!!

Thank all of you for the great advice you give!

 

[AttorneyOney]

If you're asking about an adversary proceeding to get a determination of undue hardship so as to discharge your student loans, I would say that a pro-se debtor has almost no chance of success. I would also say that a fee of just $2,500 to handle a ch. 7 INCLUDING the dischargeability proceeding is an incredible bargain.

 

[VaUnicorn]

Bargain

I do understand that $2500 is a good deal for Chapter 7 with an Adversary Proceeding, however, when I tell you that our GROSS income is down to $1000 per month I am not exaggerating. After paying $850 per month in rent, we have only enough to pay each utility every other month. We have NO credit cards AT ALL, so we aren't running up more debt while all of this is going on except for the fact that our utility bills always have a past due amount. The job market in this area is absolutely horrible. I have my resume out on Monster.com, but if I take even a part time job, that will shoot our business in the foot because my husband can NOT do it alone. His job skills are so specific I am not 100% sure that he's more than marginally employable. Since lawyers want all of their fees up front and they don't take payment plans, I figure it would take us about fifty months to scrape $50 a month out of our utilities to send the attorney to add up to $2500. We are working diligently to acquire new clients, but we are a small company competing with some VERY big ones! (Hey, do YOU know anyone who needs an extremely customer service oriented Flexible Spending Account administrator?)

I do have one more question for you. Is the adversary proceeding filed after the Chapter 7 but before the 341? Or is it filed after the 341 but before discharge? Is it possible to file it after discharge? If it could be filed after discharge, I might be able to afford a fee for only the adversary proceeding.

Thanks!!

 

[Ladynred]

Many lawyers DO take payments for their fees. How many have you consulted with so far ?? If only the 1, I'd go for a couple more consultations for sure.

 

[AttorneyOney]

Is the adversary proceeding filed after the Chapter 7 but before the 341? Or is it filed after the 341 but before discharge? Is it possible to file it after discharge? If it could be filed after discharge, I might be able to afford a fee for only the adversary proceeding.

If your only debt is the student loan, the bankruptcy wouldn't make sense unless you could get the dischargeability determination during the case, and that would mean filing the adversary proceeding before the case is closed. The timing of the 341 meeting is not relevant.

 

[VaUnicorn]

Hmmmm. There is only one other attorney in Richmond that will do an Adversary Proceeding on student loans. So I guess I need to make an appointment for the "free consultation" that he advertises .

We don't have much debt besides the student loans, but there are three things on the credit report that I would bankrupt even if they were only ten dollars. So we are going to file, even if the student loans don't get discharged. Yes, I know it is crazy to refuse to pay a bill, but you don't try to get my husband put in the loony bin as a hypochondriac and then charge me 300 unsubstantiated dollars for two aspirin and a phone call to an ambulance service!! (A Doc-in-the-Box location)