After Dismissal ??

[werebroke]

Our chapter 13 is being dismissed after 17 months. Not all so bad I guess. We are going to reorganize, and try to avoid a chapter 7. Question is, we have 2 secured pieces of property, our car and motorhome. Both of these were in the plan for the last 17 months. Now that we are getting dismissed, we will need to make a deal with both creditors to keep them. Should we call and try and cut a deal, or is it better to hire our attorney to try and make a deal ??? The attorney quoted us $1000. that would cover 4 to 5 hours of negotiation. That seems like alot, but then again if he can cut the right deal it may be worth it. What do you think ??

[despritfreya]

To me there are 2 schools of thought on this. But, before I get into them I must ask. . .

Why are you trying to keep a 2nd piece of property and a motorhome? Unless they are income producing, would it not be better to let them go and try to cut a deal to pay off the deficiencies (assuming the real estate is not subject to some anti deficiency statute in your state)? One of the reasons people get into a pickle is they try to live big. Maybe it's time to downsize.

Now,

School of thought #1 - using an attorney helps in the sense that an attorney usually can put for an argument in language that is convincing. . . but, if you are very articulate so can you. Using an attorney may get the respect and attention of the loan rep who is less likely to mouth off to the attorney. So in this sense, not a bad idea.

School of thought #2 - using an attorney necessarily means you are paying for a service. The lender might think, "well, if he can afford to pay an attorney to negotiate, he can afford to pay us more $$”.

Kind of a double-edged sword so I am not sure which way you should go. It may just come down to which you are more comfortable with - handling matters on your own in a calm, cool and collected manner or, just letting someone else to the negotiating for you.

Des.

[justbroke]

I can't do any better than what Des just wrote. My question, though, is... if you want to reorganize, why not just stay in the Chapter 13 or start another one? `

[werebroke]

Please let me clarify. Property we need to retain (make payments on) is a car and a motorhome. We full time in the motorhome. Our ONLY (real estate) property is a seasonal cabin in northern Minnesota. We are going to sell that property and try and do some reorganizing. SO.....we need to make a deal with our car creditor and the creditor of the motorhome (we owe way more than what the motorhome is worth) so I am thinking, hoping they will deal. Just not sure if it's worth hiring an attorney to negotiate?

[justbroke]

I would say that without either an attorney or an actual discharge in a bankruptcy, it will be difficult to negotiate. You are likely to need to default on those loans before they'd even consider offering a buyout. The school of thought is always, why negotiate a lower payment/principal when the debtor is already making payments on-time!

I will say that they may make a deal that would make them "current". Since you'd no longer have the protection of the bankruptcy court, it will be all in how you present, and word, the offer. I think Des is right that you would need to be able to engineer some creative writing -- and compelling case -- or have an attorney do it. Is that worth $1,000? I don't know.

What are we talking about on the vehicle and motorhome? Maybe just buy a new used vehicle with the $1,000 and save for awhile? There are so many scenarios.