Legal Question in Bankruptcy in Virginia

Re: Chapter 13 filed by non wage earner

You need "regular income" to file a 13, not wages. If he recommended a 13, it was probably because you have property that would be taken by a trustee in a 7; non-dischargeable debt in a 7, or the need to cure an arrearage on, or modify the lien on, secured debt. Ask him why he recommends a 13; usually there's a good reason.

Re: Chapter 13 filed by non wage earner

You have to be careful when an attorney advises you to file Chapter 13 when you don't have the "diposable income" to sustain the funding for a Chapter 13 plan.

"Disposable income," as you know, is that income that's left over every month after you subtract your monthly expenses form your net income. This disposable income is used to fund the Chapter 13 plan, which lasts a minimum of 3 years (maximum of 5).

Some attorneys storngly push potential clients into filing Chapter 13s because they get paid more to file a Chapter 13 than they do to file a Chapter 7. Usually, an attorney gets paid THREE TIMES the attorney fee in a Chapter 13 plan than they would have gotten if they only filed a Chapter 7. So you can see how some unscrupulous attorneys may try and pursuade their clients to file a Chapter 13--even if it's not in the best interest of their clients.

Unless you have a whole lot of equity in real estate or other property (another main reason many have to file a Chapter 13), it looks like you may be better off filing a Chapter 7 instead. Especially since you are on a limited income. Talk to a bankruptcy attorney for more info.

Randy Masters