Many questions Chptr 13

[Lesa13]

SO glad to have found this site. Filed for 13 in Sept 2005 primarily to save my home from foreclosure. Had been working with an "agency" that supposedly was going to help me with my mortgage company and a previous work out plan that was outrageously high - no luck and a huge waste of time and money. Home finally went into pre-foreclosure so I filed 13 to save it.

Plan is 3 years (I was not given an option of 5 year and don't know why)

Plan payment is reasonable with current situation. I can just scrape by. I am single and only income is what I bring in - no family support or boyfriend support. I live relatively frugally but have several pets and some health problems of my own.

Issue: my "adjustable rate" option on my mortgage just kicked in and of course has gone up $200 a month.

My attorney is one of those who only does BK and the only way to contact him is to write a letter or make appt. I wrote him letter saying my mortgage was going up $200 a month starting March 1, what could I do? My suggestions were: get a second job, attempt to refinance, possibly sell the house altogether (not a choice I want), modify the plan to take into account extra $200 a month, lengthen plan from 3 year to 4 year or 5 year.

His response was stop paying and let house go back into foreclosure.

I felt this was inappropriate since my primary goal with BK was to keep house. I have less than $20K worth of debt total, including what I owe mortgage company.

Questions for any input/advice:

1. I was told by others that taking a second job would just mean more money for BK - you couldn't take it to pay off extra debt like mortgage going up. Has anyone taken a second job and been okay with that?

2. Modification of plan - is that a huge deal? Why would atty not consider this.

3. Length of plan. In my mind, I am the client and I would have preferred initially to have a 5 year plan. Others I have spoken to said their attorneys gave them a choice (here is how it would work with a 3 year, here is how it would work with a 5 year, which would be best for you?) I was told that "you may as well do a 3 year and get it over quicker, that is the best way to get it done with as soon as possible." Maybe from their point of view, but not mine.

4. I see letting the house go back into foreclosure as a terrible option - why not sell it or try to refinance? I have made payments since September and been fine with no issues. It seems to me that anyone would have issues with their mortgage going up by $200 suddenly, much less someone in BK.

5. Finally, this attorney is not user-friendly. Is it possible to switch attorneys mid-stream? Is it wise?

Thank you for any help/advice/tips. I have felt very alone and scared about all of this. I want to get back on track and enjoy my life, while still paying back what I owe. I am trying to do that, but seems like it is sure hard to catch a break these days

[bkfiler]

1. taking a job would just mean you need to pay more to the plan i thought. of course your increased expenses would need to be dealt with when they dealt with trying to take more money as well.

2. not sure. people modify the plans all the time. what reason did he give for this? ask him again imo. maybe his plan is to save your money and get the house back into foreclosure to get a new plan dealt with. not sure.

3. i dont know how plans work regarding 3 and 5 years. not sure why anyone paying disposable income of say $400/mo but only paying for 3 years instead of paying for 5 years to pay more back. i dont have a set of rules about how this is decided. if you figure it out then let me know.

4. yes of course you would because you are supposedly paying all your disposable so how can you afford the extra $200.

5. getting a new attorney mid stream is prob more of a hassle then its worth and you already paid this one and put time and knowldge into him. pressure him for more answers. you could always call a few attorneys and ask about swithching and see what they say.

[Anj]

If you let the house go back into foreclosure - and then try and keep it - as you already know, you will only incur a ton more charges to be added to your BK - and if you did all this to save the house - then I wouldn't suggest that you do this. I'm not a lawyer though - so ask a real one...

BUT - I would think this is the perfect time to ask for a modification. You are paying this lawyer - he is getting a fee to help you - and if you ask for a request for a modification - then I would think he has to do that for you - whether the trustee accepts it is another thing.

GL to you - A

[SinkingFast]

The increase in monthly expense due to the ARM should be address with an adjustment to your Ch 13 payment plan. Your attny is being a Butt for not following up on that for you. He's getting paid the rest of his fee thru your payment plan. He should do the work he promised to when he signed on. Sounds like he is just lazy and doesn't wanna earn his keep.

Hubby works, but I don't. We discussed my getting a job yesterday in a Consult. Attny asked if I worked or was looking for work. I said I was gonna until we realized we were too far gone and were considering BK. I thought I'd wait to see how that all shook out. If we got a 7, I'd get a job after things settled down. If we get a 13, I don't know if I'll work. Attny said if we get a 13 there is no sense for me to get a job. All the money I would make would go to the plan, except an allotment for expenses, of course.

If you take an extra job, that will mean extra bucks for the payment plan. Won't get you any farther ahead. Just gets them more money for the Court and your creditors.

You gotta review this for yourself. Why is hanging onto the house so important to you?? Can you rent for equal to or cheaper than you pay in mortgage payments right now?? Maybe selling the house or refinancing are options. But anything you do will involve the Trustee and ammending your plan. You would still have to get your plan approved by the Court. And that involves having your attny do that for you.

[13inOR]

Your lawyer is being a lazy A@@ as far as I am concerned--we are in a chapter 13 and our situation is much the same as yours, not a ton of debt other than the mortgage arrearages. All you need to do is file an amended plan, and your attorney is supposed to do this for you, thats what you are paying him for---sounds like he just doesnt want to bother.

We filed an amended plan because our son needed braces--the attorney sent the request to the trustee with the bill, they sent back an approval for us to pay
only $302 a month for 2 months instead of the normal $1302 so we could use this as the down payment for his braces.(down payment was $2000) Simple as that. Then the plan went back to normal. We are very fortunate to have a fabulously helpful attorney though, I can even email her with questions and she gets right back to me. All she does is bankruptcies too but she sure knows what shes doing.
All I can say is, you have every right to keep your home and seek an amended plan if thats what you want to do, so just keep after that attorney
till he does it for you! : ) Kelly

[Lesa13]

Thank you everyone

WOW! Thanks for the great responses. I feel like "hey, I am not crazy after all...."

The reason this house is such a big deal to me is a. I have it set up for my pets and I and have put a lot of time and sweat equity and energy into it and b. I could not rent or buy another house similar to this at this point in time. If I go into foreclosure we will definitely be in some trouble, so it is mandatory to me that we keep THIS particular house until I am ready and able to sell it myself.

I also felt like my atty was being lazy and not listening to me or being responsive - maybe that is more common than I think! In my letter, as above, I asked him a whole list of questions and got only one answer to that list: "stop paying on your house and let it go back into foreclosure." Like that was the only solution available.

I guess I am going to have to make an appointment and just go in and be very firm and say, hey dude, I need you to find a way to make this work for me, modify this plan somehow in the very near future and not just give up without at least trying other solutions - because, guess what, that is your job.

He also was encouraging me to go into chapter 7 which was also ridiculous to me because a. I wanted to keep the house and b. I don't feel I have a high enough debt load to warrant chapter 7 (plus I have a decent job). I had told him "I thought chapter 13 was the "wage earners plan" for a reason - so you could pay back what you owed - which is what I want to do."

Anway- thanks very much for the support and stories - it really helps!

[BK-refi-guru]

refi in BK

you should refi
I can refi you you and do a cash out while you are in chpt 13
pay off your bk 13
get a nest egg of cash
attorney's are not aware that you can do this.try to avopid going back into forclosure

SO glad to have found this site. Filed for 13 in Sept 2005 primarily to save my home from foreclosure. Had been working with an "agency" that supposedly was going to help me with my mortgage company and a previous work out plan that was outrageously high - no luck and a huge waste of time and money. Home finally went into pre-foreclosure so I filed 13 to save it.

Plan is 3 years (I was not given an option of 5 year and don't know why)

Plan payment is reasonable with current situation. I can just scrape by. I am single and only income is what I bring in - no family support or boyfriend support. I live relatively frugally but have several pets and some health problems of my own.

Issue: my "adjustable rate" option on my mortgage just kicked in and of course has gone up $200 a month.

My attorney is one of those who only does BK and the only way to contact him is to write a letter or make appt. I wrote him letter saying my mortgage was going up $200 a month starting March 1, what could I do? My suggestions were: get a second job, attempt to refinance, possibly sell the house altogether (not a choice I want), modify the plan to take into account extra $200 a month, lengthen plan from 3 year to 4 year or 5 year.

His response was stop paying and let house go back into foreclosure.

I felt this was inappropriate since my primary goal with BK was to keep house. I have less than $20K worth of debt total, including what I owe mortgage company.

Questions for any input/advice:

1. I was told by others that taking a second job would just mean more money for BK - you couldn't take it to pay off extra debt like mortgage going up. Has anyone taken a second job and been okay with that?

2. Modification of plan - is that a huge deal? Why would atty not consider this.

3. Length of plan. In my mind, I am the client and I would have preferred initially to have a 5 year plan. Others I have spoken to said their attorneys gave them a choice (here is how it would work with a 3 year, here is how it would work with a 5 year, which would be best for you?) I was told that "you may as well do a 3 year and get it over quicker, that is the best way to get it done with as soon as possible." Maybe from their point of view, but not mine.

4. I see letting the house go back into foreclosure as a terrible option - why not sell it or try to refinance? I have made payments since September and been fine with no issues. It seems to me that anyone would have issues with their mortgage going up by $200 suddenly, much less someone in BK.

5. Finally, this attorney is not user-friendly. Is it possible to switch attorneys mid-stream? Is it wise?

Thank you for any help/advice/tips. I have felt very alone and scared about all of this. I want to get back on track and enjoy my life, while still paying back what I owe. I am trying to do that, but seems like it is sure hard to catch a break these days

[Lesa13]

you should refi
I can refi you you and do a cash out while you are in chpt 13
pay off your bk 13
get a nest egg of cash
attorney's are not aware that you can do this.try to avopid going back into forclosure

Thanks for the tip. I actually just spoke to a lender locally who does only BK/foreclosure types of loans. He really gave me some good info - for instance, you can only do a refinancing with a BK buyout while in 13. You can't just "refinance" like normal. However, with my situation (little equity in my home/debt load/credit scores/amount in BK and value of house right now), he told me it would take awhile before I would be in a position to do this. However, it does answer my question of "can you do a refi while in BK"

That all being said, BK-refi guru, please contact me privately if you think you could still help.

[Minnymouth]

If you get no results from your attorney contact your Trustee as soon as possible and explain the situation to him... He has to approve all changes in your Chapter 13 plan anyways.....

Your attorney is suggesting foreclosure as it will MAKE HIM MORE MONEY - you would file a Chapter 7 (MORE MONEY) and then more money for him to fight the foreclosure........... DUH................ you got a attorney that is working in his own best interest, not yours!!!

If you have to find another attorney, you can discuss this with trustee - be sure you file a complaint against this attorney with the State Board...

Keep us posted.

[LostOne0069]

Don't fall for BK-refi-guru's crap.

Bottom line is: borrowing money because you're having problems paying for what you already borrowed is a BAD IDEA. That's how most of us got into this mess in the first place!

Talk to the attorney and get the plan adjusted.

[13inOR]

I agree---please try to just get your plan amended. We had to do that and its really not a big deal. Don't fall for predatory lenders!!!!! : )

[jane taylor]

These responses have helped me, too!

My husband and I are also just starting Chapter 13 and I've had so many questions. We really want to keep our house and can do that if nothing catastrophic happens in 5 years! It's helpful to know that we can notify the lawyer who can talk to the trustee. We've got a great lawyer and paralegal who readily answer my endless questions.

Thanks!

[Lesa13]

Your attorney is suggesting foreclosure as it will MAKE HIM MORE MONEY - you would file a Chapter 7 (MORE MONEY) and then more money for him to fight the foreclosure........... DUH................ you got a attorney that is working in his own best interest, not yours!!!

I am sorry to be a bonehead - but could you break this down for me Minny? How does letting me go back into foreclosure make him any more money? And Chapter 7? Doesn't what he already got (the original statutory fee) cover everything in the BK? He has already gotten paid off the top - so I was thinking that is ALL he gets paid, period, and THAT is why he is being lazy - he figures he's done all the work he wants to do for what he got ?

Thanks if you can clear this up

[SinkingFast]

I am sorry to be a bonehead - but could you break this down for me Minny? How does letting me go back into foreclosure make him any more money? And Chapter 7? Doesn't what he already got (the original statutory fee) cover everything in the BK? He has already gotten paid off the top - so I was thinking that is ALL he gets paid, period, and THAT is why he is being lazy - he figures he's done all the work he wants to do for what he got ?

Thanks if you can clear this up

There are 2 different attny fee structures.

Ch 7 tends to run around $800 to $1K. The attny files for you, and if everything goes alright, in 3 or 4 months, his/her work is done. Adios. You never see them again.

Ch 13 typically runs between $2500 to $3000 depending on the allowable where you live. You can access that at your BK District's home webpage. You pay part of the fee out of pocket. The remainder gets paid to the attny, by the Court, out of your Ch 13 plan payments. Off the top, as in your first few payments into the plan, before any Creditors see a penny. The extra money is because the attny is your partner for the duration of your payment plan. The attny is supposed to be there for any adjustments that need to be made. Such as a mortgage rate increase, pay decrease, whatever. If you were married, and your spouse went to work, or got a raise, the plan would have to be adjusted.

You've already paid the attny for the Ch 13. If your new mortgage increase causes you to be unable to make you 13 plan payments, your Ch 13 can get tossed by the Court. No discharge. Just dismissed. In order to get any BK relief, then you would have to file Ch 7, meaning you'd pay another fee.

It's an attny scam. Push borderline clients, or people such as yourself who desperately wanna keep their home, into a Ch 13. The attny knows full well the client will not be able to keep up the payments. The attny will see you again in a couple years when you wanna file Ch 7, and they get to collect more money from you.

If your attny won't answer you, or work to ammend your plan for you, you may want to contact the Trustee directly and explain what's going on. Maybe a nudge from the Trustee will get your attny off his duff.

[Minnymouth]

I have to agree - a plan adjustment is the best option available to you right now until you can refinance after bankruptcy at a lower interest rate possibly.....

You really don't want to incur MORE debt than you already have right now........

Talk to your attorney, get some answers from him........