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What are the advantages/disadvantages to filing chapter 7 versus chapter 13

Fremont, IN |

Before I got married I wanted to file chapter 7 but the lawyer told me I make too much I have no assets or house I would like to have my car go as it's part of the problem why behind it's nickle and diming me anyway we got married and went back now he is telling us we both make too much. He gave us advise to stop the over time which is hard to do as we need it to cover the bills right now. I am wondering if he knows what he is talking about??? Now he is saying best to file in June of 09 get our hours down (I didn't know they could include over time??) and see what he can do from there he is not giving us a clear answer I just want to know if we can file chapter 7 or will have to file chapter 13 as if so there is not a way I can make the monthly payments. Plus we paid him over the amount it would have cost. I just would like some straight answers any answers and to know how muchyou can make before the cut off for a married couple with no assets or mortage just lots of bills that accurred during our single life. Plus I would like to know if you can get a new car well not brand new but somthing that is worth driving my car is high miles and starting to break down and we can't afford to fix it half the time. He told me there is a plce where you can??

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Attorney answers 2


If you don't feel you are getting straight answers find another atty to consult. Many give free initial consultations. At that consultation you can work through The Means Test" to see if you pass it. If not he/she can tell you by how much you missed it so that you can make the necessary adjustments. Hope this helps.


This is a tricky question to answer because whether a person can file a chapter 7 requires doing a means test. This test can be cumbersome and not necessarily intuitive for someone who hasn't had experience with it. First off, the income is calculated by looking back six months just before filing and calculating the average income over that time period. Secondly, you can deduct from this income various expenses. The law dictates what can be deducted and often it doesn't seem fair. For instance, why can you deduct a car loan payment but not a lease, or why can't you deduct student loan debt? These are real expenses for people and yet the means test doesn't take them into consideration. IT doesn't seem fair but this is what was signed into law in 2005. Some expenses are deducted dollar for dollar, others based on IRS allowable expenses for the number of persons in your household. Attorneys typically use software to help us figure this out. Therefore, it is also true that when a person's income fluctuates, there may be times during the year when you take that still picture of the situation and the debtor is eligible for a chapter 7 and at other times it is not. It is perfectly fine to file during those times when you qualify, provided that other considerations don't risk a filing being in bad faith.

Particularly with the self employed and people who do significant overtime or don't get paid regularly (for example teachers who don't get paid during the summer break) you may need to let time pass, recalculate and see on which side of the line you fall.

I am concerned though that you do not feel comfortable with your attorney. Regardless of whether he/she is competent, it's important that you have a trusting relationship and feel like you are getting some answers. Sometimes the answers though may seem obscure because the law is not always clear cut either. I would suggest discussing your concerns with the attorney and also going out to get a second opinion.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. Kathryn Tokarska is admitted to practice law in the State of California only and makes no attempts to opine on matters of law that are not relevant to California. This advice is based on general principles of law that may or may not relate to your specific situation. Consult an attorney in your locale before you act. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.