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Chapter 13, divorce & light at the end of the tunnel

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    Chapter 13, divorce & light at the end of the tunnel

    Alright - I love my lawyer - totally on our side. Today my stbx and I headed into his office to discuss all of our options on divorce, selling and finishing the 13, dismissing - everything and what our options are.

    So... here goes - I'll try and go thru this as clearly as possible.

    Orginal claims submitted by us - 39K total (attorney and trustee fees included)
    20K of the 39K was a student loan (mine) and they didn't respond in a timely manner so the court rejected their claim. Seriously - it's gone - so our 13 is only (to date) $17561.20 on a 58 month plan - can u believe that?? We are paying $965/month.
    Amount in plan to date - $6865

    We are divorcing ($750 total with filing fees uncontested to be filed by our BK attorney, how thoughful... ha ha) and we have agreed to sell the house, and all proceeds of the home will go toward the 13 debt (the 17.5K).

    Home - sale price 189,900 (about 10K less than we could get if we sat on it)
    commision - 6%
    total received approx 178506 - will not get that much, as there are bound to be a dozen fees we don't know about.
    total owed to mortgage (including arrearages that are filed in 13) - 173231 - so....

    178506-173231=5275
    total debt in 13 after arrearages paid=6669.43

    so my friends - we will be anywhere from 6-8K left in the plan at 100%. When that is paid back, we are done... on a 58 month plan

    AND the other good part is we will put in at least 3 more payments on the plan (2895) and more principle toward the mortgage (miniscual, i know) but that will chuck away at that 6-8K.

    Gosh - I hate that I'm getting a divorce - but I can't tell you how AMAZING it is to know that we will be able to move forward without this looming over our heads for years to come. That we can get a DISCHARGE - not a dismissal - and we can recover so much quicker.

    By the way - you have to petition the judge to be divorced while in 13 and submit a new I&J with your incomes seperated after you receive the decree. The 13 is still in both of your names, but you do have the option to dismiss and repetition the court to refile in 30 days after dismissal, but you risk the creditors coming after you (as we are all aware). Another tid-bit to share (in case anyone stumbles across this lurking for answers)...
    As a divorcing couple with 3 kiddos - he will have to pay me $1000 a month in support - but that will increase my income by $1000 per month - so I may actually be scheduled to pay MORE after the divorce in the 13 because a huge chunk of his income is coming to me (for support) - now isn't that CRAZY??? So I have to support the kids and pay the bigger part of the debt while he is just moving right along... BUT like I said before, the light - there is a light!!!

    A

    #2
    oh - and we are absolutely, positively (and always have been) 100% payback - so the deal is... if you are 100% and you somehow satisfy the debt before 36 months, new law or not - you are finished... they can't keep collecting - so 36 months is no longer a finish line here!!!

    Woo hoo

    Comment


      #3
      I am so glad you posted, Anj.

      We just learned that some friends of ours are gonna file Ch 13.

      Their marriage is not stable at all and the D word has been tossed around a lot the last few months. Out of the blue, the guy suddenly wants to go to a Financial Counselor. The Financial Counselor said there was nothing they could do to help them. DMP was not an option. Not enough disposable income. So, they went straight to an attny's office in the same building for a BK Consult. Immediately, they paid a retainer fee and hired the attny to file Ch 13 BK for them.

      The whole way, the wife is asking, but what if we get divorced??!!

      She and I had been discussing BK and divorce prior to this group of meetings. If they were to divorce prior to her filing BK, she could easily file Ch 7. Her income is way below the Median for a single person. He would still be a Ch 13 regardless due to his income level.

      I thought it would be easier if they divorced first and then she filed BK on her own. She said she asked the attny and the paralegal they Consulted with if they could change things mid BK pending the Divorce. The attny made it sound like it was no big deal, but now I know for sure, and can tell her different.

      Thanks so much for your post, and the information you've shared with all of us.
      Filed Ch 7 - 09/06
      Discharged - 12/2006
      Officially Declared No Asset - 03/2007
      Closed - 04/2007

      I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

      Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

      Comment


        #4
        My wife actually moved out the week we decided to file. Our lawyer just refigured our numbers as two separate households. That was in '05. Divorce was final April '06 and we haven't had one issue with the BK. Now I'm selling the house (my name only) and will pay everything 100%. Just waiting the required time for the court approval to sell.
        John, Virginia
        Case Confirmed: 5/20/05
        Property Closing: 9/20/06
        Buy-out and Discharged: 9/27/06

        Comment


          #5
          A Chapter 13 is hard enough on you, mentally and emotionally. I can't imagine having to go through a divorce as well.

          You are a very strong person!
          Date Filed: 12/19/2004
          341 Meeting: 2/8/2005
          Date Case Confirmed: 7/12/2005
          Closed on Refinance/Chapter 13 Buyout 8/23/06

          Comment


            #6
            Awww - thanks Jman - but I can honestly tell you I haven't felt BETTER in my life - and I see an end to a tunnel of lies, debt and heartache... and I truly hope we can walk away from all of this as better people - and great parents!

            A

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