Convert to a chap 7

[worried]

Hello all...
I have fallen behind on my post-petition mortgage payments of about 4 months. So the bankruptcy specialist wrote my attorney a letter wanting this addressed by december 20. My attorney says if i dont have it by then they will ask for a motion for an automatic stay. Then my attorney says i would have another month to pay it. I dont know if i can come up with it all just maybe half. Do you think i should call the mortgage company to make some arrangements or is it set in stone while you are in bankruptcy? I dont think they will work with me on the post-petition arrears unless i modify the plan. I dont think i have anymore room in the plan to add more. Also my daughter is a guarantor on an old debt that i owed to my attorney for a previous chapter 13. If I converted to a chapter 7 would i have to include that and would it then hurt her credit? About 2 years ago i had a 13 voluntarily dismissed so after the 7 would i be able to file another 13 then?

[brokehmowner]

You could reformat the plan to pay the arrears, without increasing the amount that you pay. It's just that unsecureds will not get paid as much or at all. You could also ask the mortgage company for a modification. Your attorney might charge you for this, or he might just throw that in the plan too, without an increase.

[worried]

Unfortunately this mortgage company does not allow modifications. It is a federal loan USDA Rural Housing. You would think they would. I am in a 5 year plan and at the limit unless I lower something else. My lawyer told me that every time they have to defend me with the trustee that it costs me 700 to 1000 dollars. I filed in October 2013 and already modified back in May 2014. He is probably sick of defending me. I think I have a right to cure any default but why would I only have a month after they motion for the stay? Wouldn't I be able to get 6 months to pay it back. Is that all the trustee would allow is 1 month? If I don't come up with the money would I have a hearing then? Would I be required to have my lawyer be there too? Thanks for all your help.

[brokehmowner]

This is in Maryland so not sure if that makes a difference. But you can put the arrears in the repayment plan instead of having to pay them outside the bankruptcy. And as long as they trustee and attorney get paid, it doesn't matter if the others get nothing. So they can definitely rob Peter to pay Paul, Paul being the trustee, attorney, and mortgage arrears. They can reformat so that you are still paying the same amount, it's just distributed differently. But of course your mortgage arrears must be paid to keep the house.

[LadyInTheRed]

30 days is probably how long it takes for a hearing to be scheduled after the mortgage company files a motion for relief from automatic stay. If you are not caught up by then, the judge will most likely lift the stay. Whether the mortgage company gives you more time to catch up is completely up to them. They could have filed a motion from relief from automatic stay as soon as you missed your first payment. Your best chance is to get caught up before they file a motion. It can't hurt to call to see if they will give you a little more time. But, I suspect they will want to know exactly when you will be able to get caught up. They will probably want your attorney's authorization to talk to you.

If you convert to a Chap 7, you will have to include your prior attorney fees assuming it is still a valid debt. That doesn't mean you can't pay them after your discharge if you want. It won't affect your sister's credit unless they don't get paid by one of you. Besides, I suspect most attorneys do not report to credit bureaus.

You can file a Chap 13 after you are discharged from a Chap 7. But, my understanding is that there are some limitations to the automatic stay when you are a "serial filer". I am not familiar with that issue.

Does your current plan pay 0% to unsecured creditors? If not, why is modification not an option?

[worried]

The mortgage company still hasn't done anything. I pay 0% to unsecured.

[May2014]

Is keeping the home feasible? If you are already paying 0% to unsecureds, how would a 7 benefit you? The "must-pay" claims are generally the same in both chapters, secured payments, back taxes, student loans. Do you have debts that can be discharged that aren't unsecured? Obviously, everyone's situation is different. I'm just wondering if your payments would be roughly the same regardless of chapter number (in a 7 we would pay $745 for must-pays, in a 13 we pay $795 which includes lawyer/trustee fees).

[worried]

I think the only option I have is to bring in more money.