Legal Question in Bankruptcy in California

Not everything adds up in the narrative. But in short: this needn't be characterized as a nightmare.

With regard to the credit union and reaffirmation: it is likely there was a cross-collateralization clause that permitted them to use your collateral as security for multiple loans. In this instance, reaffirmation might have been against your interest, but I can't suggest an answer without more specifics.

With regard to the creditor's adversarial actions: creditors are entitled to object to the discharge of debt on the basis of fraud. This occurs in a minority of bankruptcy cases, but it occurs and such an allegation is not unique. Which is why it's important to retain legal counsel to ensure positive results. Fortunately, I would assume it is easy as pie to prove the timeline of your employment.

With regard to private school, the last time I checked, this is a free country, and the Bankruptcy Judge cannot expel your young ones. Tuition is a relevant factor, however, in terms of whether one should be entitled to Chapter 7 relief. It may be argued that certain expenses are impermissible luxuries that unfairly deprive creditors. There is an analysis of whether you should objectively have disposable income that could be committed to repayment of debt through a Chapter 13 Bankruptcy. However, your particular tuition payments are not necessarily determinative and the U.S. Trustee has deadlines in which to make objections on these grounds.

It sounds like you have an attorney. Have faith in your counsel: you have a host of concerns you'd like answered. Talk to him or her. Keep in mind that at least some of your issues may be outside the scope of your retainer. The basic advance fee for bankruptcy representation cannot reasonably cover every contingency. Additional fees may be required, but this doesn't mean they were hidden or unfair. The extra fees are likely worth the investment.

Important disclaimer:

Unilateral written communications may be incomplete or misconstrued. This answer is not legal advice and it is based upon the limited and partial information provided in the question. This answer is general in nature. It is strictly opinion and legal opinions differ and some may be incorrect. This reply does not create legal representation and does not create an attorney-client relationship (or retainer). The information herein should not be relied upon in determining whether or not to take or refrain from any action. Only an attorney that agrees in writing to represent a person is capable of giving legal advice in response to a question. Such a hired or retained attorney is in a unique position wherein he or she can clarify the questions, determine and avoid conflicts of interest and gather all the information necessary to give an informed answer. A retained attorney is in a unique position to follow up on their legal advice and adapt/correct it as circumstances change or new information or knowledge comes to light. All individuals are urged to retain competent legal counsel before filing for bankruptcy. Errors in completing and filing a bankruptcy petition can have disastrous consequences.