Reaffirmation or Arrears?

[Dealer36]

Hi all, I am having a difficult time deciding on whether to push my 2 car payments to the back and pay the small fee or whether I should file my car in my chapter 13 plan..If I do file it in my chapter 13 plan then will it get paid off sooner than the rest of my debts(unsecured)? Also, I owe less than 2 years on it and I don't want to stretch it out if I can avoid it(not to mention the trustee will get more). Will that make a difference in my payments? I am under the impression that it will but when it's paid off my unsecured creditors will get more..no?

Also, my house arrears. I wonder how long those would take to pay off.

One more question, please. I live in a Condo/Townhome and I'm really wanting a backyard for my animals. My dilemma is whether I should sell, buy another house (all before the bankruptcy) or whether I would possibly get financed while in the Bankruptcy after a set number of payments. I don't even know if I would qualify for another home loan at this time as I have a few accounts that will be 60 days past due very soon. Up until then my credit was really good but debt/income may play a role. If anyone has any advice on any of my inquiries I would greatly appreciate it.

[rrockinggramma]

As to your cars (others can give their opinions on your home etc) I would include them in the chapter 13. Secured debt is paid off before any unsecured creditors so you are not stretching out the loan repayment. In addition, the claim is for the principal owed on the car, not the interest. My trustee paid my lender 6 percent on the principal for the car loan. Now others will say that your "on time" payments are not going to be reported on your credit report but in my experience, it all says "included in wage earner plan" anyway, with no payments listed either way. It is of course your decision, but I would include them, I did include them in my chapter 13 and never looked back.

[Minnymouth]

You said you wanted a different home..........before filing bankruptcy?
Then sell the one you have, buy another (stay within the same price range or lower - not more expensive) before you file for BK.

After you file BK, it will be hard to buy a home (especially during BK) and selling your present home could result in the Trustee getting his hand on the proceeds from it. It would be almost impossible to sell and buy another home during the bankruptcy process because of not being able to finance a loan....


You are telling us that you have NOT filed bankruptcy yet....RIGHT???

[Dealer36]

Thanks for your responses and no, I haven't filed for bankruptcy yet. I do want to get another house so I can have a backyard because I feel like living in my condo (although beautiful) is too much like living in an apartment sometimes. I do have about $15,000 equity in the 27 months I have been in it. My partner wants us to keep the condo and says she feels "safer" in it because we have neighbors all around us and I work graveyard shift. That played a part in us going for a condo but I REALLY want a house. So, in my mind i'm arguing with myself. I don't even know that if I sold my condo I could buy a house because my debt/income ratio is quite high. I'm $40,000 in debt and I make about $52,000 a year. Plus it would probably take a couple of months to sell my home and buy another one and I'm already late on everything....all help would be appreciated.

[lrprn]

That played a part in us going for a condo but I REALLY want a house. So, in my mind i'm arguing with myself.

So let's look at where you are at the moment....

First, there's no guarantee you could sell the condo in a few months considering the state of the crashing real estate market across many areas in the US.

Second, even if you could sell quickly at a high enough price to pay off your current two-year-old loan AND get enough for a decent down payment on a new house AND if you could get decent financing to purchase a new home (doubtful given your current credit rating)...you see where I'm going.

Third, your partner doesn't want to move....that's opens a whole new potential trap in your plans.

Sounds like you are in "wish" mode, not "must have" mode. You are considering filing bankruptcy....this is not the time to be in "wish" mode taking on new debt that isn't absolutely required for you and your partner. Probably not what you wanted to hear, but it is what makes the most financial sense under the circumstances if you are thinking of filing within the next few months.

[Dealer36]

Thanks for your advice...everything you said is absolutely correct and I know this..i just needed to be reminded