If you are just viewing this post, be sure to take the time and read the previous post that includes the background to the this case. It will fill in the gaps as I cannot repeat it all here.

After easily finding a place to park, I entered the building. There were no security gates. There was a security guard telling you to turn off your cell phone, if you enter the court room. I was just on time. However, the members and their attorney were not there. I went in to the court just to listen. This was when I saw a man coming to the hearing as a “pro se” filer. (He was his own attorney.) It was not his first time in the court. From what I could understand, he was trying to save at least 2 properties from foreclosure. The Trustee had to tread lightly, as they cannot give legal advice. But, it was so evident he did not have the basics for defending his position or strategy and needed an attorney desperately! If anyone ever comes to you and wants to file pro se; tell them that unless they went to law school, then don’t even need to think about filing. It is way too complicated!

After 35 minutes, they called the case, and the Trustee’s assistant makes the announcement that the case has been delayed due to a conflict with the debtor’s schedule. The case was to be heard at 1:00PM. So, I had a couple of hours. I called a client in the area and learned she was on vacation. So, I just hung-out at a local eating place and spent time on my Blackberry.

The case was not called until about 1:20PM. The member/debtors were present with their attorney. After the swearing in and general info was announced about the case, their attorney made the court aware that the schedule B has to be amended to include the car that the member owns and the father pays for. The Trustee reminded the attorney about schedule “D”, I believe. Then it was my turn. The Trustee asked me to proceed. I began by asking questions about the truck. How many miles are on it? The husband said about 48,750. Was it repaired? “Yes.” As we had been told by their attorney that was in the shop. Where was the damage? “Left wheel” Was it insured? What company and was it full coverage? “Nationwide- full coverage.”

Then I started asking about the vehicle she drives and her father pays for. What value were they going to place on the schedule for it? Their attorney answered, “Kelly Blue Book”. The Trustee was obviously listening and corrected him and said. “Do you mean NADA?” He said, Yes. I added – full retail? He just nodded his head. I asked about insurance and who paid for it and other such things. The answers were now coming only from the wife and she was getting more snooty by the minute.

Two days previous, a teller had allowed the wife to cash a $50 check drawn on the account of another member. She brought it to me and I asked for a copy. The check said “Child care” in the bottom left. I emailed our attorney and he said “There is a clause in the code that states if there is any income revealed within 45 days of the petition that was not disclosed previously, then the petition must be thrown out.” FD I had discussed with the President our strategies. She agreed that we should at least ask. So, I began by saying the two days previous she had cashed a check for $50 at the CU and the notation was “child care”. She immediately rolled hers eyes and huffed. I asked her if she kept children in her home? At that point, she launched into a dissertation about the check and how she kept one child for one day and all kinds of other stuff. It was not a regular thing and she has three of her own to keep! Her voice was climbing in volume, and I knew the next question would not help. The Trustee must have believed her, and we went on to the next issue.

When we asked her attorney initially about the second car, he said that he could not get in touch with his clients, “They are on vacation.” So, I told her that her attorney had told us they had gone on vacation. I asked her how long were they gone? Did anyone go with them? And who paid for it? She was very huffy at this point. They had been gone for a week, and her sister’s family went with them and her Daddy paid for it! Well, by that time she was rambling, and I held my hand up to stop her and told her I was only asking the questions.

The Trustee took over from here. But, I had one more question. So I interrupted, I asked her attorney if we could inspect both units and take pictures for the file some time the following week. He sheepishly said – yes. At the end of the hearing, I did not stay around for chatting, I left.

If all this sounds strange, let me give you my perspective. The whole deal was not a pleasant experience. I did not relish the fact that I had some idea the wife would get testy. But, here are the facts as they came out in the hearing and ones we know from previous information. The wife does not work, she attends school as came out in the hearing, and will not finish until 5/10. The husband does have a 401K loan that will not pay-off until 2011, if he remembers right. He does have a good job. However, after going on vacation, they had not paid their August plan payment of $730. The Trustee reminded them of this during the hearing. They drive two vehicles that are each two years old. They have financial struggles for sure. This is not their first bankruptcy. They filed in 2001(?) if I remember right. But, sometimes you have to make decisions to cut back and live within your means! It is my humble opinion that this couple will not make it through their chapter 13 plan to completion unless there are major changes in their lifestyle, which includes spending habits.

What does that mean for the Credit Union? If they get dismissed, then they would not be able to pay their loans current, and they would have to sell the unit for pay-off (that will not happen, they are upside down now!) or we repossess. We would lose more money then, than if we could get them out of bankrutcty now. So, it is tough, because they fit the model for the typical couple filing. But, that is why I went. We have to examine each case and put forth the effort on behalf of the members of the CU that pay on time and keep their deposits in our CU. Just as it stands right now, after selling the first repo and charging off the repo balance and unsecured balances, we will lose about $10,000! Why charge-off the unsecured? Because in most plans, you may get 10% on the dollar starting 18 to 24 months from the confirmation! The truck is worth $20K retail, the balance is $22K. If we had to sell it we may get $15K. We probably will not see money from the Trustee until October.

So, it was not pleasant, I felt compelled to go and at least make known our concerns. We must take the losses seriously and do what we can to stem the tide of further losses. The couple across the room was stressed, as they brought at least part of it on themselves by the choices they made.

If you haven’t been following you chapter 13′s or 7′s closely, then it is time to start. The number of filings is up, and I don’t see it going down anytime soon. You can comment and/or email questions. I will gladly answer or get you the answers you need.

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