Legal Question in Bankruptcy in New York

Following a car accident I was out of work for a year. I had two very young children and my wife only had a part-time job. ( My personal injury lawsuit is pending.) I am back to work now, but that time out of work has left me in huge debt. We filed chapter 13 bankruptcy because I had too much equity in my home to file chapter 7. (I couldn't take an equity loan to pay the debt because I could barely afford my mortgage now.)

The attorney that handled all of this gave us no counseling. We paid him $2500 and met twice for about 15 minutes each time to sign papers. He keeps saying "don't worry it will be an interest free loan for 5yrs." On his advice we did not pay our mortgage for a few months and now that is thrown into the mix. The papers we received state our income is much more than it is. He said we had to do that to get the bankruptcy approved. The amount we have to pay the trustee every month in addition to our mortgage leaves very little for anything else. We don't know how we are going to do this! Our "341 meeting" (what ever that means) is scheduled in 2 weeks and our conformation hearing is in October. Can we back out of this or is it too late? What do we do if we can't afford to make these payments or get behind in the mortgage?


Asked on 8/06/09, 12:03 am

1 Answer from Attorneys
Craig Robins Law Offices of Craig D. Robins (www.BankruptcyCanHelp.com)

My question to you is WHY you would retain a Long Island bankruptcy attorney who provides such a low level of service and who may have also engaged in improper conduct!

In any event, your bankruptcy has only begun, as you have not even gone to the Central Islip Bankruptcy Court for your meeting of creditors, which is also known as the section 341 hearing.

One advantage of Chapter 13 is that in most cases you can voluntarily withdraw your petition at any time and have your case dismissed.

Your attorney should have done a much better and thorough job in analyzing your financial situation and making sure you have the ability to make your Chapter 13 plan payments.

If you fall behind with the payments to the trustee, the trustee can bring a motion to have your case dismissed. If you fall behind with your post-petition mortgage payments, the lender can bring a motion to lift the protection of the bankruptcy stay.

It is very important that you review your family budget and ascertain if you can make Chapter 13 work. If not, you can consider Chapter 7 or perhaps some other options.

There are a great deal of posts and articles on my Long Island Bankruptcy Blog on many of the various issues you raise. I urge you to check it out: www.LongIslandBankruptcyBlog.com

Finally, if you really believe your attorney failed to give you the service you paid for and are entiteled to, then you should consider writing a letter to the bankruptcy judge in your case, with a copy to the Chapter 13 trustee and another copy to the Office of the U.S. Trustee.

I wish you good luck!

Read more
Answered on 8/12/09, 8:17 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in New York