:blush2: Sorry, this should be my last ?? for a while! Advise?

[jlynn275]

I feel like such a PIA and I've tried searching for this answer, but didn't see anything that would help me figure this out. I appreciate all the help you guys have given me.

I hired an attorney who only does Ch. 7 BK. She assured me we passed the means test by enough that it won't be a problem, but I'm worried about my expenses and ability to be thrown into a 13...having to find another attorney and pay them another $3000 on top of the $2000 I am paying this attorney (for everything). I really like THIS attorney (after meeting with 3), so I would prefer to ride it out with her.

Anyway, I am confused about what to do with my mortgage payments. We have an 80/20 both with Suntrust and while I definitely cannot afford the 80% right now, I can afford the 20% mortgage and THAT is the one SunTrust keeps calling me about. They haven't tried to collect my big mortgage because we have been in review for a modification for 14 months, but they are not happy I am not paying the small mortgage. I plan to NOT reaffirm, but we will need the expense of the mortgage going into what I assume is the schedule J for what we will be paying after the BK. If we get a loan mod we will probably stay in the house for a bit and pay....so while we are not reaffirming we will INTEND to pay. We are just now 2 months behind on both mortgages, will be 3 when we file.

So I am wondering if I should pay my small mortgage, just to show good faith that I INTEND to do what I can to pay, even after BK? Or is that dumb?

[jlynn275]

annnnnd that smiley didn't work. lol

[Pandora]

Hi Jlynn275

Dont feel like a PITA - asking questions is what the forum is for .

First thing I would do is consult with your attorney and ask her the question. In light of that, I guess the question becomes how much is your 2nd mortgage vs. your 1st? General consensus is pay the 1st over the 2nd as they are the first lienholder, however if you owe more to the 2nd than the 1st, the likelihood they will foreclose is higher. Subordinate lienholders can foreclose at any time however regardless of whats owed to the 1st, but they'd have to pay it off first.

I dont know if you've filed yet or not, but once you do, the stay is in effect. Have either mortgage tried to get the stay lifted?

[jlynn275]

My first mortgage is $1011 ($115,000). Second is $308 ($40,000). My house is about $70,000 under water (according to market analysis from realtor and Zillow). I guess I'm not really worried about foreclosure as much as them throwing me into a 13 because we aren't paying our mortgage and my mortgage would make the difference between affording a 13 or not.

We have not filed yet...trying to time it just right so probably early December we will be filing.

[tobee43]

jlynn!! good morning to you..

i can ONLY tell you what we did.

we intended to surrender the property....and we also were in the middle of a loan mod....we simply stopped paying completely...and saved the money for our move. since we knew for certain we would be leaving.

now...our atty did IN FACT include our mortgage payment in our means test....why?? because it was still a debt and not confirmed otherwise. we had no problem with listed it and the trustee didn't mention it at all....the mortgage payment was approx 4900 monthly. of course we did surrender the house and it was ALSO we listed the mortgage on schedule j.

hope that helps a bit!!

[researchnerd]

Yep, in most jurisdictions you can use both mortgage payments on your means test, even if you don't intend to reaffirm. You are still legally obligated to pay the debt until that's changed by the BK.

When are you planning to file?

[jlynn275]

But the means test is different than schedule J, right? I already passed the means test, but want to make sure they WILL use my mortgage when determining my expenses post BK. But I guess until it's discharged and I actually DON'T pay they can't say I won't prematurely?

We are filing early December. So I thought maybe if I slipped a $300 payment to my 2nd mortgage it will give them a reason to think I will continue to pay...but seems silly when I think about it too hard.

[tcreegan]

Hi jlynn,

....and she wins the prize...yes, Sch J is different than the means test! Sch J is your 'forward looking' expenses and if Sch I minus Sch J is a positive number over 100, you get the consolation prize: Ch 13

Which you don't want. And here is where your atty is going to earn her pay...courts are split on whether you can use the payment on secured debt as an expense on Sch J if you are surrendering the car/house/whatever was secured. (In fact, there is a case before the Supreme Court about this very thing! As we speak, they are deciding) But in the meantime, your atty will/should know what will fly in your case/court/trustee.

Hopefully it will be OK for you!

Tom in Colo

ps: don't pay on the 2nd, as my Grandma said; 'don't throw good money after bad'

[tobee43]

Hi jlynn,

....and she wins the prize...yes, Sch J is different than the means test! Sch J is your 'forward looking' expenses and if Sch I minus Sch J is a positive number over 100, you get the consolation prize: Ch 13

Which you don't want. And here is where your atty is going to earn her pay...courts are split on whether you can use the payment on secured debt as an expense on Sch J if you are surrendering the car/house/whatever was secured. (In fact, there is a case before the Supreme Court about this very thing! As we speak, they are deciding) But in the meantime, your atty will/should know what will fly in your case/court/trustee.

Hopefully it will be OK for you!

Tom in Colo

ps: don't pay on the 2nd, as my Grandma said; 'don't throw good money after bad'

like tom says...........don't pay on the 2nd!!!

[jlynn275]

Crap, so it's anyone's guess at this point if the mortgage will be factored in my schedule J. Either way, I have to have SOMEWHERE to live/pay rent...no?

[momofthree]

Okay, so I just looked at your expense sheet and you have a negative DMI on your schedule J to the tune of around $800/mo. Even when they disallow the $100 401k loan repayment, and IF they questioned some of your other expenses (cable/cell phones, etc), you'd still be far enough in the negative that even if they disallowed you listing the 2nd mortgage payment, you'd still be fine. No worries. Don't pay them. List them on the schedule J, it probably won't be questioned since it IS a secured loan and you're intending to keep the home. BUT, if it is questioned and you're made to remove it, you should still be okay. You don't look like a ch.13 candidate at all to me....

[tcreegan]

momofthree has good news for you jlynn.....

if it is questioned and you're made to remove it, you should still be okay

Either way, I have to have SOMEWHERE to live/pay rent...no? Yes! No matter what they say on the mortgage payment, you have to have some expense for shelter somewhere.

So you are in good shape for Schedule J !!

Tom in Colo

[jlynn275]

I wonder why they wouldn't allow the 401K loan payment? I have been paying on it for 3.5 years and only have another year left. I actually tried to stop the payment and just take my loss on the remainder, but they won't let me! Oh and I am also not reaffirming my car loan (I think), so that's another almost $400. So if they don't allow the 401K, car and 2nd mortgage that is $800...which still doesn't give me any Disposable, so hope you guys are right and I will be in the clear

[daylate]

HI jlynn. Up at 2 am thinking about my own stuff so i will offer this for you in case you haven't read it http://www.bkforum.com/showthread.ph...edules-I-amp-J
if you go to the bottom of that thread-HHM has a comment on schedule J-basically it says list what you will actually pay (or a very reasonable estimate-such as rent in lieu of your mortgage payment). Now what drives me a bit crazy is all the comments about "well the trustee won't allow that"-and I'm sure that in many cases they somehow don't but exactly how that all plays out is beyond me-and it seems like every lawyer I've talked to about it has a different answer too so what I'm doing is taking HHM's comment as my starting point and listing verifiable things I will pay. Sorry for the mini-rant but as I'm sure you know this can be a very intense process...good luck

[debee]

Not sure of Florida, but here in the 9th they've decided that a 401k loan is not real "debt" since the loan administrator has no "claim". Something like that. But there is a member of the forum, I think her username was LALADY and her employer's rules were such that if she did not pay the loan back, she would lose her job. On that basis she was able to fight for the inclusion of her 401k loan and she won. She had to see three lawyers before she found one that was willing to argue her case.

I think you were well-advised by others on the forum to back the expense out and find a way through without it. One thing that sometimes helps with expenses (& also offers better protection for the family) is to examine your term life insurance policies, deductibles and so on. We raised our deductibles and lowered our coverages (health, auto, everything) in order to save money but it came back to bite us. Better insurance will help you on the schedules and also protect you in the future.

Good luck and keep us posted!

ps. Don't feel bad about posting. The insomniacs need something to do!