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The time has come for me to file a Chapter 13

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    The time has come for me to file a Chapter 13

    I thought I had a lawyer to litigate some claims against my mortgage company but I am not feeling confident in him. I paid him $250 to review cases I had and he gave me a discounted rate and wanted a third of my claims. He is 71 so that is also a concern.

    I am being foreclosed on Nov. 2 so I may have to move forward myself and it has been a while since I studied this stuff. I know it is not recommended and I am sending out emails and not getting many bites. I suppose if I file a skeleton case, I could take that extra 14 days to find an attorney.

    Anyway I have around 33k of mortgage arrears now which are disputed. We have some priority tax debt and about and total unsecured debt around $1000 between us. House is in my name and my own asset worth money besides some Robinhood stocks and crypto worth under $3000.

    I have a lot of equity in the housel it's FMV is around $260k and the principle balance owed $110315 plus disputed arrears.

    If it were me filing a chapter 13 alone and he files his own chapter 7, that might make the plan more affordable as his debt is only only 22k.

    Either way, I have to pay back $100 because of equity. My income is only around 33k per year. His was less for the first 6 months but he just got a much better job.

    Does anyone have any experience with two separate filings? If he could get rid of all debt in his Chapter 7, then I would have a safety net of sorts. That is the way that I am seeing it. Is this correct.

    Also, all old issues with the sale of the old business and other complex issues such and inheritance that I was to receive are void.

    #2
    Hmmm, if your significant other is your married spouse, then what you're proposing sounds pretty complex. My wife and I filed separately, her a Chapter 7 and me a Chapter 13, however, we had separated 6 months before she files and 18 months before I filed; so other than confirming separate addresses and any obligations I had to help support her and our daughter, there was no issue with separate filings.
    Latent car nut.

    Comment


      #3
      Originally posted by shipo View Post
      Hmmm, if your significant other is your married spouse, then what you're proposing sounds pretty complex. My wife and I filed separately, her a Chapter 7 and me a Chapter 13, however, we had separated 6 months before she files and 18 months before I filed; so other than confirming separate addresses and any obligations I had to help support her and our daughter, there was no issue with separate filings.
      What happens to jointly owed tax debt if we have two separate filings? It's been a while but we were told by two separate attorneys that the non priority tax debt can be discharged to the non filer in a chapter 7. This is what we would prefer happen, he discharge it to me and the interest stops.

      Comment


        #4
        Jointly owed tax debt is a mess. You can't discharge "priority" tax debt in a Chapter 7 (because it doesn't meet the criteria). So joint tax debt is owed by both parties together and 100% individually. If one of you file Chapter 7 and there is priority tax debt, and the other doesn't pay it all off during the Chapter 13 (including the penalties!) the Chapter 7 party is not going to be happy.

        I just had this issue and it wasn't pretty. Spouse was ex-spouse by the time my Chapter 13 completed and they went after her last year. She filed an innocent spouse declaration, which kicked off some interesting things. Then I had a refund for 2019 (which they finally processed in 2021, believe it or not), and they took the refund despite it being discharged in the Chapter 13. The IRS couldn't even figure out which flag to put on those years on my account and her account. I finally just gave up and they can keep my Tax Year 2019 refund if that makes them feel better and they leave us alone.

        Originally posted by womanonfire View Post
        It's been a while but we were told by two separate attorneys that the non priority tax debt can be discharged to the non filer in a chapter 7. This is what we would prefer happen, he discharge it to me and the interest stops.
        Discharging non-priority tax debt (which is really just dischargeable tax debt) will collected from the other person. If you file correctly, someone files Chapter 7 first and then the other files Chapter 13 after, may be the better way to deal with it. The Chapter 13 debtor, though, has to make sure they pay ALL the priority debt so that nothing bounces back.

        It's tricky, if you ask me based on my experience.

        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #5
          Originally posted by justbroke View Post
          Discharging non-priority tax debt (which is really just dischargeable tax debt) will collected from the other person. If you file correctly, someone files Chapter 7 first and then the other files Chapter 13 after, may be the better way to deal with it. The Chapter 13 debtor, though, has to make sure they pay ALL the priority debt so that nothing bounces back.

          It's tricky, if you ask me based on my experience.
          Yes I agree, that he should file first and that time is of the essence. This way he can discharge all the tax debt to me and I can pay it in my plan. I think this should free up income from him to support my own plan payments.

          Thanks for your input, I was thinking about it correctly it seems after all.

          Comment


            #6
            I'm no expert as I messed it up myself. It can be messy, but only if you divorce. My issue was that I divorced during the Chapter 13 and the Chapter 13 didn't pay the "dischargeable" taxes (because they were discharged). So all that from 2010 magically reappeared on my ex-spouses IRS tax account. Luckily one of the IRS agents noticed that it was 2010 and was non-collectable, but they still took my 2019 refund. They were trying to fix it, but I told them if it is going to complicate things, just leave it the way it is.
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog

            Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

            Comment


              #7
              How do you plan to keep the lawsuit proceeds from being seized by the trustee? There doesn't seem to be a way for you to protect lawsuit proceeds in Georgia since this isn't a personal injury case. The trustee isn't going be nice and let you keep any settlement unless there is an applicable bankruptcy exemption. My gut feeling is your lawsuit isn't worth continuing unless you do bad faith serial CH13 skeleton filings.

              Comment


                #8
                Originally posted by flashoflight View Post
                How do you plan to keep the lawsuit proceeds from being seized by the trustee? There doesn't seem to be a way for you to protect lawsuit proceeds in Georgia since this isn't a personal injury case. The trustee isn't going be nice and let you keep any settlement unless there is an applicable bankruptcy exemption. My gut feeling is your lawsuit isn't worth continuing unless you do bad faith serial CH13 skeleton filings.
                I don't want to keep the proceeds from the trustee. I would rather just let all of that go to pay off my debt and move on from this nightmare. Is that wrong? Couldn't it potentially lower my plan payments that are going to be high? If so, it is worth it to me.

                Right now, because of the previous mortgage servicers bankruptcy filing, I feel that I have been unable to get justice or any kind of relief. I feel that I am in the situation I am today because of previous servicers severe mishandling of my mortgage to the point that I had to file a lawsuit in the first place to protect my consumer rights. They literally drove me a bit insane and screwed me.

                Comment


                  #9
                  Originally posted by womanonfire View Post

                  I don't want to keep the proceeds from the trustee. I would rather just let all of that go to pay off my debt and move on from this nightmare. Is that wrong? Couldn't it potentially lower my plan payments that are going to be high? If so, it is worth it to me.

                  Right now, because of the previous mortgage servicers bankruptcy filing, I feel that I have been unable to get justice or any kind of relief. I feel that I am in the situation I am today because of previous servicers severe mishandling of my mortgage to the point that I had to file a lawsuit in the first place to protect my consumer rights. They literally drove me a bit insane and screwed me.
                  You're right. It doesn't matter because you are in a 100% plan. BUT.... there is a chance your lender might put their legal fees for the lawsuit into your arrears because you are challenging the amount of the proof of claim. Every Chapter 13 filer with a mortgage will accrue legal fees of around $1k due to all of the extra court paperwork including those who are current on mortgage payments. But if you have a lawsuit, they might add their own legal fees related to your lawsuit to your arrears regardless of whether you win, settle, or lose. You might want the BK lawyer to challenge this and that might be more fees to the BK lawyer and not part of the no look fee.

                  Comment


                    #10
                    Originally posted by flashoflight View Post

                    You're right. It doesn't matter because you are in a 100% plan. BUT.... there is a chance your lender might put their legal fees for the lawsuit into your arrears because you are challenging the amount of the proof of claim. Every Chapter 13 filer with a mortgage will accrue legal fees of around $1k due to all of the extra court paperwork including those who are current on mortgage payments. But if you have a lawsuit, they might add their own legal fees related to your lawsuit to your arrears regardless of whether you win, settle, or lose. You might want the BK lawyer to challenge this and that might be more fees to the BK lawyer and not part of the no look fee.
                    If I can prove that I am in bankruptcy because of them in the first damn place, then maybe I can get those waived?

                    In my first lawsuit against former servicer, I alluded to the fact that their mishandling of the loan caused me to pay more in interest on this loan and other debts. In fact, this entire lawsuit started when I went on a mission to get out of debt and took Dave Ramsey's advice to look for money that might be owed to me, if I was over paying and look at insurance and other things. So I found out that I had been over paying PMI that was supposed to be cancelled. Then I looked at payment history and found payments misapplied and that it looked like I was overcharged interest. Then they were supposed to recast my loan and didn't do that correctly which would have lowered my monthly payments and allowed me to pay off other debt.

                    Anyway, again, that servicer filed bankruptcy and I have a claim in that case. According the their BK plan, my loan was not even supposed to be transferred until the loan was corrected but it was anyway so it looks like the new servicer may have also interfered with that contract by accepting transfer of the loan. They were supposed to extend me a modification under Fannie Mae's guidelines and they did not. They also violated RESPAand the FDCPA because the mispresented the amount of the debt owed. So yeah, I will challenge any and all fees and their right to collect them.

                    Yeah I do not think this will be part of a no look fee because nothing about this case is ordinary at all but that is a great point. I hope I can find a lawyer that will litigate on my behalf. It is hard to find.

                    Comment

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