Furnace went out - an impossible situation? What to do.

[mabIL]

I am just over 1 year into my Chapter 13. My furnace went out (new in 2012). I guess it's the main part and costs just as much as replacing the furnace. I paid the HVAC company for their service call, and a 2nd company for a second opinion - verified. I have nothing else left extra. It's in the 30's here and I have no heat. I've been keeping the house at 49 degrees with the combination of 2 space heaters.

I am not sure what I can do? Both companies -- and I don't blame them -- said they are sorry, but they need payment up front. I don't have any way of coming up with money for a furnace. I am an only child, parents gone, and only living relatives are distant that we speak maybe every handful of years. There is no one to borrow from.

Does anyone have any ideas or options as to what I could do? I "own" my own home, not a renter.

[sophieanne]

Hi..sorry for your situation. Are you in a 100% payback plan??? Talk to your attorney..you may be able to work out a deal to skip a payment or two then add it to the balance of your plan. Good luck.

[Carmella]

I am sorry you are going through this. We could very easily be in the same position. I am married, but my husband and I don't have family to fall back on, I'm an only child and his family was very dysfunctional haven't even seen his siblings in probably 10 yrs. I think sophieanne has a great suggestion to talk to the attorney and see what you can do.

[justbroke]

mabIL there are some companies that will basically lease heating and ventilation equipment and installations. You would also need emergency approval by the Trustee and/or court to incur debt. Since this is a true emergency, you may need to get it fixed while asking permission.

I was in a similar situation with air conditioners. They wanted $18K to replace them and I was not prepared for that.

[bcohen]

My furnace went out (new in 2012). I guess it's the main part and costs just as much as replacing the furnace. I paid the HVAC company for their service call, and a 2nd company for a second opinion - verified.

I am a professional HVAC service technician, with 15 years in the business. I think you are being ripped off. A new furnace wholesales for about $1200, and sells for approximately $2500 with labor and installation. I cannot fathom a situation where a 7-year old furnace needs so many repairs as to approach the cost of a new furnace--unless of course the heat exchanger(s) have cracked, which is highly unlikely barring gross abuse. I can count on one hand the number of times I saw failed heat exchangers on a furnace that was less than 15 years old, and each time it was due to improper installation (burners overfiring) or gross neglect (air conditioning coil completely blocked with dirt).

I would be very interested to hear exactly what the diagnosis is from these companies, i.e. what they claim happened to your furnace and what part(s) they think need to be replaced. I would also be interested to hear what they want to charge for the repairs.

Unfortunately, a lot of HVAC contractors (as well as plumbers, pest control companies, etc) have gone to a business model where the "technicians" are paid straight commission, and the installers are paid piecework. This results in high-pressure sales of new equipment, dubious "diagnoses" of expensive problems (to help justify new equipment), and poor workmanship on new installs. Personally, I would never work at a company which pays any form of commission, spiffs, or kickbacks, because I believe that is unethical, however I can tell you that my friends who work at companies which pay commission make a lot more than I do working hourly.

The bigger problem is that companies which operate on this high-cost, high-pressure sales business model are much larger and have huge marketing budgets compared to smaller companies (such as the one I work for) which want to provide quality service at a fair price. Our marketing budget is $0. We rely exclusively on referrals from satisfied customers. We also don't pay for fake "reviews" online. Many of these big companies hire "reputation management firms" to post fake reviews online, pretending to be satisfied customers. If you are choosing a company to hire based on advertising, rather than the recommendations of friends or neighbors, then you are more likely to be dealing with "snake oil salesmen" than skilled, honest technicians.

[Carmella]

Could there be a recall on the furnace since it broke after 7 yrs ? When we first moved into this house our furnace went and when the repair people came they found out it was under a recall. There were a lot of cracks in some part--I don't remember what it was. Maybe try an internet search on your furnace model.

[justbroke]

Unfortunately, a lot of HVAC contractors (as well as plumbers, pest control companies, etc) have gone to a business model where the "technicians" are paid straight commission, and the installers are paid piecework. This results in high-pressure sales of new equipment, dubious "diagnoses" of expensive problems (to help justify new equipment), and poor workmanship on new installs.

This is exactly why I was upset that instead of fixing my A/C under my homeowner's warranty (for $700), the last HVAC repairman acted more like a salesman than a repairman. He wouldn't even fix it -- under the warranty -- until I thought about buying a new unit (2 new 3-ton units).

Yes, the quote was $18K. I said no thanks... $700 or $18K? But that is the new model. Talk you into new equipment rather than fix it... even under warranty.

(In my case, somehow the outside condensing coil sprung a leak and spewed coolant out. I think the landscaping people either hit is with their riding mower, or with continuous abuse by the weed whackers. They had also damaged a control wire in the past.)

[mabIL]

So far I haven't been able to get anywhere with anyone, really. This is ridiculous and I feel less than human right now. I don't know what I expected, though. You have a budget and you have to live within it for 36 months, and I knew it going in.

The trustee does not have the power to allow me to skip payments, and even if they could it would take me until next spring or summer to accrue enough to get a furnace. My payback is 12% and my payment is in the 400s. Apparently you have to go back to court in order to skip payments, which means going through the attorney again. I looked into programs where you can get help paying, but of course I am just out of the income ranges.

My attorney has told me to work it out and surely I have someone who can loan me the money, even if my employer. That is funny, because the trustee's own documentation warns against taking any debt and specifically mentions no advances on paychecks.

As for the furnace - yes, it's the heat exchanger and the limit switch(?). The furnace was installed before I bought the house but all of the documentation is there for it. It is not under warranty. I have not abused it any way and never have turned it up by more than 2 degrees at a time. Filters have been changed regularly and I get a tune up every fall. I was told that the inside of my furnace was very clean. I don't know what else to tell the HVAC person who responded. I mean, what am I supposed to do, I can't hire anyone else now as that was everything extra I have already. I live in a pretty rural area, so it's not like there are dozens to choose from.

So right now I am managing to keep the house in the upper 50's with a propane heater and an infrared electric heater, but that's just going to make my electric bill so high that something else will have to get bumped. When it gets bitter cold I am just going to have to run more than a trickle of water and keep my fingers crossed.

I guess the moral of the story is you aren't allowed to have anything important break down during a chapter 13 and that you should stop paying creditors and keep hold on to the money in cash before filing! Hope someone else sees this and heeds the warning.

[justbroke]

The trustee does not have the power to allow me to skip payments, and even if they could it would take me until next spring or summer to accrue enough to get a furnace... Apparently you have to go back to court in order to skip payments,

Yes. This is always the case. The debtor must make a Motion to Abate Payments or an actual Motion to Modify Confirmed Plan. The court nearly always approves these motions unless the Trustee objects and has good reason to object. (They are usually filed as Agreed Motions meaning the Trustee consent was already acquired prior to filing the motion.)

My attorney has told me to work it out and surely I have someone who can loan me the money, even if my employer. That is funny, because the trustee's own documentation warns against taking any debt and specifically mentions no advances on paychecks.

Well, your attorney is probably using the fact that they would just file a Motion to Incur Debt. These types of emergency situations are allowed, but the court must rubber-stamp them.

I guess the moral of the story is you aren't allowed to have anything important break down during a chapter 13 and that you should stop paying creditors and keep hold on to the money in cash before filing! Hope someone else sees this and heeds the warning.

I have written about this in the past and there's one judge who has also written the same thing. Chapter 13 Plans are totally ambitious, optimistic, and look at a blue-sky horizon, where life happens. Yes, life happens. I had both an A/C (heat pump/AC) and a sewer line break (and backup) during my plan. I had to take some money out from my 401(k)... and "borrow" some short-term money.

It's a pain, but you have to think of it as if you weren't in a bankruptcy and had horrible credit; what would you have done? That's how I thought about these things. I also made a point to try to save money in a rainy day fund. Saving was difficult because it was "always" something else (new tires, 2 AC/heatpump units broken, pool leak, refrigerator replacement, washer broke, dryer broke, HOA violations, just to name a few of the things I had to endure and figure out). Even if I wasn't in bankruptcy, I would have had limited options (with failing credit).

[bcohen]

As for the furnace - yes, it's the heat exchanger and the limit switch(?). The furnace was installed before I bought the house but all of the documentation is there for it. It is not under warranty. I have not abused it any way and never have turned it up by more than 2 degrees at a time. Filters have been changed regularly and I get a tune up every fall. I was told that the inside of my furnace was very clean. I don't know what else to tell the HVAC person who responded. I mean, what am I supposed to do, I can't hire anyone else now as that was everything extra I have already. I live in a pretty rural area, so it's not like there are dozens to choose from.

I still question the validity of this diagnosis. If the heat exchanger is truly breached, what will occur is that the furnace will light the burners normally at the beginning of a call for heat (before the indoor fan starts) and then once the fan starts, the burner flames will "leak out" of the heat exchangers and trip the flame rollout switch(es). Is this what is happening? Also, the main limit is almost always automatic reset, and the flame rollout switches are always manual reset. There are typically warning decals which say to never reset these yourself, and instead to call a serviceman. If the main limit is defective, it almost always becomes weak, tripping before the intended setpoint, meaning it shuts off the burners because the control board thinks the furnace has overheated.

Also, when I said "gross abuse", I didn't necessarily mean anything you did, or even anything the previous owner(s) or tenant(s) did. At the time of installation of a new furnace, it is necessary to set the pressure regulator in the gas valve to ensure that the furnace is not overfiring. A good technician will also double-check this during a fall maintenance. Unfortunately, many people skip this step. If this is not properly done, and the output is too high, the furnace will repeatedly cycle on the limit (which a homeowner or tenant will not notice, because it will continue blowing warm air) and when this occurs, the heat exchangers will eventually crack. Since you say you had the furnace checked this fall, I assume the technician did a temp rise test, and confirmed that the temp rise was within the design range for your furnace?

However, let us suppose for a moment that the diagnosis is correct, and that you legitimately need a new furnace. Prices vary widely from contractor to contractor, and more importantly, the skill level of the people doing the work, and the quality of their workmanship varies widely from one company to another. Also, some companies will do an actual load calculation and evaluate your ductwork in order to properly size the replacement system, whereas others will simply install whatever BTU rating furnace/air conditioner is already there. This can be a problem if your ductwork is poorly designed, and does not allow the size of furnace/air conditioner which you have to move its design airflow. A skilled estimator would check for such issues, and either propose ductwork modifications (if economically feasible) or propose a furnace/air conditioner with a lower-BTU rating so that it will function properly and not overheat/freeze up.

If you do need to replace your furnace, I am sure you can get permission from the bankruptcy court to incur debt for that purpose. It is then up to you to find a qualified company which will properly replace it at a fair price.

[magic13]

In my opinion your plan is too tight considering it is for only 36 months with $400.00 payments. What is the reason for the chapter 13 since it appears you qualify for a chapter 7,are you paying mortgage arrears in your plan? Personally I think you have a income issue and even if you weren't in the chapter 13 it would be a struggle without relying on credit, something that a chapter 13 is suppose to fix.Well since you haven't disclosed your age or health if possible since it is only you can you work another job for a month or so to pay for the repairs

[mabIL]

To magic13: yes, my plan is tight. I swore to the attorney when he calculated my income that it seemed way high, but he barked at me that "that is what the numbers say!" Then several things have gone WAY up since then. Health insurance, car/homeowner's (no claims), property taxes, our electric/water/sewer base charges and usage charge percentages. I tried already to go back and get it changed, but the attorney would not answer me so I gave up and have been trying to muster through.
I am in chapter 13 because I would like to keep my house. I was never even 1 day late on anything as of the day I filed, but I was about to be. There were no arrears, and I pay mortgage outside of the plan. My mortgage payment is $420 with taxes and insurance included. I live in a low cost rural area. I am of working age. Getting another job would require me to report it to the court, and then they would just take it. Just like my tax refund. It was in the documents that I was NOT to turn it in, but I had to after all, even though it was the same amount it's been since the dawn of time. My attorney is not very helpful. I found out after the fact that he is known for not dealing with/responding to anyone after the 341 meeting. Yet there are constant automated emails asking you to write a review for them on some website!