contemplating Chapter 13

[mikebender]

I am thinking of filing for Chapter 13, alternative ideas welcome.

I have 60K in unsecured debt with interest ranging from 10% to 19%. Make 60K a year and single. Pay Mortgage 1200$ a month (my only secured debt). I have been in a never ending cycle of making minimums payments and spending on my cards. No 401K, no savings. I cannot do a debt settlement , cannot afford a debt Management program.

Only reason i am thinking about chapter 13 is i want to get this done with and start from scratch.

[debtinohio]

I am thinking of filing for Chapter 13, alternative ideas welcome.

I have 60K in unsecured debt with interest ranging from 10% to 19%. Make 60K a year and single. Pay Mortgage 1200$ a month (my only secured debt). I have been in a never ending cycle of making minimums payments and spending on my cards. No 401K, no savings. I cannot do a debt settlement , cannot afford a debt Management program.

Only reason i am thinking about chapter 13 is i want to get this done with and start from scratch.

Sounds like this may be a 100% plan as 60K over 60 months is $1000/month plus any other attorney fees/etc. Try to get a monthly budget together and take this to your attorney meetings, hopefully you could get into a lower % plan. You would be debt free after 5 years anyway.

Best to consult a couple of attorney's and get their free thoughts.

[pete42]

that figure has nothing to do with it. it will depend on your disposable monthly income. your attorney will go over that with you. I doubt it will be a 100% plan

[debtinohio]

that figure has nothing to do with it. it will depend on your disposable monthly income. your attorney will go over that with you. I doubt it will be a 100% plan

It's not unreasonable as he is single and makes 60K so he probably brings home around $4000/month - $1200 mortgage = $2800, of which if $1800 was used for utils, food, etc it still leaves enough for a possible 100% plan.

The best thing to do it to get the household budget down on paper, take the online means test to determine a possible DMI and then talk to some attorneys.

[Lissy]

Are you having trouble making your minimum payments and/or using your credit cards to buy essentials like food and gas? If not and you just want to be debt free in 5 years, I'd think long and hard. Your credit will take a big hit and it sucks to have someone else in control of your finances. You'll need permission if you want to buy a new car in the next 5 years, if you decide to sell your home, etc. Plus, you'll have to worry about having extra money for emergencies, recreation, etc.

If I had had another way out of my financial mess, I probably would have taken it. Most of us here were forced into a Chapter 13 when we fell behind on payments, lost a job or had some other financial setback we couldn't recover from. Of course, I think a lot of us also regret not filing sooner than we did and letting the problem get worse. So if you find yourself current on your payments but unable to get through the month without using a credit card for essentials, definitely consider filing sooner than later.

[coak1875]

Question Chapter 13

Hello Lissy,

I noticed that you just got confirmed in June for your Chapter 13, I am curious to know what expense figures was used and accepted by the court. Was it the IRS figures or did they accept the actual expense figures. My actual expense figures are higher than those the IRS shows. I have not filed yet and will be as of now my 1st mortgage is $314K second mortgage is $60K My 1st is current 2nd have not paid in over 2 years but creditor harrassing now real hard. Other Debt maybe about $50k give or take. House value about $143K - take home pay between my husband and I before taxes about $5500 monthly I don't think my husband will be filing though. My Car got repo maybe almost 2 years of course 50K includes balance. Just some input would help. Was your monthly payments affordable without strain for you?

[SMinGA]

Coak1875, if I were you I would think long & hard about keeping a house worth $143k with a 1st mortgage of $314k. Even though a ch. 13 could 'strip' the 2nd, you're paying double what its worth. You can never sell it, so you'll be stuck there. Can you rent elsewhere for less?

I have not filed yet and will be as of now my 1st mortgage is $314K second mortgage is $60K My 1st is current 2nd have not paid in over 2 years but creditor harrassing now real hard. Other Debt maybe about $50k give or take. House value about $143K - take home pay between my husband and I before taxes about $5500 monthly

[Lissy]

Hello Lissy,

I noticed that you just got confirmed in June for your Chapter 13, I am curious to know what expense figures was used and accepted by the court. Was it the IRS figures or did they accept the actual expense figures. My actual expense figures are higher than those the IRS shows. I have not filed yet and will be as of now my 1st mortgage is $314K second mortgage is $60K My 1st is current 2nd have not paid in over 2 years but creditor harrassing now real hard. Other Debt maybe about $50k give or take. House value about $143K - take home pay between my husband and I before taxes about $5500 monthly I don't think my husband will be filing though. My Car got repo maybe almost 2 years of course 50K includes balance. Just some input would help. Was your monthly payments affordable without strain for you?

I think it's very typical for your actual expenses on Schedule J to be higher than the IRS allowances. Mine were. My lawyer padded the IRS numbers in some areas, such as automobile expenses (gas, maintenance, etc.). My commute to work is 45 miles one way so I use more gas and have to pay for regular maintenance on my car more frequently. My rent is $400 more than the IRS standards allow for my area, so that was increased to reflect what I actually pay. Stuff like that. The rent was not questioned, but the auto expenses were. I think the IRS allowance is $200-something and my atty had put around $500, so the TT objected. Ultimately, my plan was confirmed anyway and I didn't have to change anything. Get a good atty who knows what they're doing. I can't stress that enough. And don't worry if the TT objects, it's his job to do so. Like I said, my plan had a few objections and got confirmed anyway.

I can't offer advice on the home situation, I don't own one. But if you are that far under water on it, I would seriously consider what SMinGA said.

My payments are doable. I have to watch my spending, but I'm not struggling. My lifestyle didn't really have to change too much. It's more about learning to live within your means, which I don't think I've ever done in my entire adult life. So it's an adjustment, but it hasn't been as difficult as I originally thought it would be.

[Floridagail]

My BF, is in same boat, He is tired of paying the interest , We went to see a attorney today. She said he would have to pay back 100 percent, in chptr 13, plus pay court costs for 13, 2300, and her fees 1795.00. Then get a bad mark on your credit report.
We could strip the second mortgage, but would pay 90 per cent of it. waste of time.

He gets by because of my helping out. We also called another attorney who offered us
to defend a forclosure for 3000.00 if we decide to stop paying mortgage ( we are current) to give back the home without them coming after us. but upside down by 100 thousand.
He also told us he did debt settlement for 2500 first cc, 500 for each after that.

He is not even sure he will have a job in future. but for now he cannot pass means test to file chapter 7, so not sure what we will do, He is 4 yrs from retirement or possibly laid off if his company does not get any work for this year.