Conversion or Change in Plan?

[inseriousdebt]

We are currently a year and 3 months into our Chapter 13, and as of December of this year, our 1st mortgage is going to turn into an ARM. Our second mortgage is fixed, but we are already upside down on this in terms of how much we owe on the house. Yes, we were one of the stupid ones that thought that we would get out of here before this all happened, but now we are facing reality with bankruptcy on top of it. We are current on everything right now, but as these payments go up, we are going to be in trouble......

As this goes up another 4-500/month on top of having a new baby with a whole load more of expenses, what chances do we have of converting to a 7 if we let our house go? We pay 275 currently in our 13, and I am assuming Ch. 7 is going to be our only option? We will miss our home, and are so fearful of not finding anyone to rent to us. If anyone is in MN, how long will we have to move, or does anyone have any information on how long this takes? Any advice is welcome and so much appreciated...we have been trying to wait this out as long as possible, but are at the breaking point!!

[MOMof3]

I don't know the answer to your question & we are in a similar boat! Our ARM increased our payments by $300/mo. Our payments & arrears are in the plan & our lawyer said no talks of conversion until arrears was gone, but I don't know about just letting the house go. I would love to know what would happen if we just gave up the house...if we could then convert to 7 & rent. I hope someone answers!! I have 3 kids, one of which is 5 months old...so I get what you are saying! Plus, I work 40+ hours per week and wish I could be a SAHM like I was w/my older two. Good Luck!!

[kags1969]

I have two trains of thought on this...

1.) See if you can get a change in your plan, since you are beyond 3 years, a change may mean that you will complete the 13 in a shorter time frame. This would be good if you thought that you were going to be able to keep up with the house w/o the 13 payment.

2.) If you want to get rid of the house, giving it back and converting to a 7 seems a reasonable course... or giving it back and finishing your 13...

I wouldn't worry about renting, there are lots of private people who understand life's ups and downs and will rent to someone in a 13. I got lucky and was upfront with my current landlady and just told her upfront what my situation was. All she cares about is that I am low maintenance and pay on time.

Kags

[inseriousdebt]

We are only a year and three months in..and i don't know how that would go if we stayed in a 13. I guess that is what I am wondering.....we are hoping to do a conversion, but is this going to be possible? I am hoping it is. I just want to get this all behind us already and move on. We have a new baby that is 2 months old that will also increase our expenses.

Momof3, what are you new expenses with the baby looking like? We are formula feeding, so that in itself has proven expensive.

[inseriousdebt]

I wish I could be a SAHM as well! Daycare is going to cost us a fortune.....so this is what is killing us also.

[MOMof3]

I was pregnant when we filed. We put into our plan expenses of $200/week infant care (high-end in our area--I am not paying quite this much as I went with an in-home provider) & $200/mo additional baby expenses (Diapers, Formula, etc...). Our trustee did not question either of these expenses, but we had some back up to "prove them", our calculations on formula & diaper expenses as well as tuition price sheets from local daycare centers. These expenses are what made us fail the means test even though we are over median income. Having a baby is not cheap!

Our actual expenses are about $185-200/week. Daycare is costing $135 week, We use almost one large can of formula per week @ about $25 can & Diapers I figure at about $10-15/week (with wipes). Clothing, Binkies, Bottles & now rice cereal/first foods & other extras I figure is at least $15-25 per week on average.

[keepmine]

i'd suggest you ask your attorney about either a conversion or, a hardship discharge of your Chapter 13.

http://doney.net/bkcode/11usc1328.htm

[JRTLover]

i'd suggest you ask your attorney about either a conversion or, a hardship discharge of your Chapter 13.

I was in month 12 of 36 when Hurricane Katrina blew my house away, and thought I might qualify for a hardship discharge. Attorney (whose home was also destroyed) said it would not be possible! If losing everything was not enough, then short of death, you may not qualify for a hardship.

[coma]

I was in month 12 of 36 when Hurricane Katrina blew my house away, and thought I might qualify for a hardship discharge. Attorney (whose home was also destroyed) said it would not be possible! If losing everything was not enough, then short of death, you may not qualify for a hardship.

I agree, though YMMV. We filed for a hardship after losing a little more than half of our income because of a move the military required us to make on two weeks notice. We had already converted from 7 to 13 to save a car, which we had to surrender after the move, so we thought we could go for a hardship, since we paid in enough, it was out of out control, and we couldn't convert. We also don't know how to amend, since now, we're negative income every month after regular expenses, not counting trustee payment. We're also without a lawyer, as our case is transfered from our old to our new state, and no one will take us on this far in, so we're just hanging on. Don't do that to yourself...

Anyway, I digress...it sounds as if, in your situation, you'd be best to convert now, rather than stress and struggle.