In Chap 13 vs Chap 7 ,is it possible??

[grandmasusan]

I am finally in my BK 13 plan. Filed June 15th by myself even though I am married as I wanted to keep my spouse's credit clean and because I have a rental forclosure that is in my credit only. My BK pmts are $1360 which includes back irs taxes and property taxes. The plan is for 5 yrs. I made a decision to keep my current home and auto out of the bk as they are current. I thought I was finally in the clear. Wrong!

My current mortgage is about 5k each month for PITI. I owe $715k. The first mortgage will adjust in Nov and pmt will jump $700. So now my home could cost me almost $6k each month. My home has depreciated about 10-15 percent in the past year. We are thinking of selling or giving back the home to the mortgage holder and buying a much smaller home or just renting for the next two years as I think the market has NOT hit bottom yet in my area. I could rent a nice 2000 square foot home for $1500 a month or get a home like mine and pay $2200.

When I filed, the last 6 months of joint income was $18k per month but since my comission checks have dropped, it is more like $15,000. I am thinking even though I am getting rid of a 5k home, if I rent a home for $2500-3000, I could offset the additonal disposable by refiling with my most recent income.

What are my best options in my situation?
-stay and struggle to make mtg pmts
-sell and move
-buy smaller home
-rent for 2 yrs?

Sorry for the long post, but I just don't want to make a hasty decision. That's what got me into trouble the first time :-(

[papa0881]

tought one here.... i know for myself you cannot buy, sell or trade real estate here in PA so not sure about your state, ask your attorney, hope yours is not like mine, called him 3 times and never heard nothing back from him yet about my payment. i pay 1065 a month its tough sometimes, but im getting sick of paying 1065$ when i could just file ch 7.... but im like you i have assets.....thats scares me

[lrprn]

GMa, you've got a tough situation here. You're a high income filer with significant assets of high value. Good for you that you are considering all your options.

Before I can say more about your specific questions, I need to know....when you say "Filed June 15th by myself", did you file your Ch 13 without a lawyer (pro se)?

[grandmasusan]

i filed with a good attorney...otherwise I would really be in trouble!

[lrprn]

i filed with a good attorney...otherwise I would really be in trouble!

Whew! Glad to hear you filed with a lawyer!

What are my best options in my situation?
-stay and struggle to make mtg pmts
-sell and move
-buy smaller home
-rent for 2 yrs?

Your lawyer understands your situation best, of course. But if I were you and there were no hidden traps involved, I'd be getting your trustee's permission to sell your house if possible and rent for a few years while the market settles itself.

Yes, there will be a tax hit by renting, but at least you won't be tied into a second house that might keep declining in value if the housing market continues to spiral downward.

Let us know what your lawyer thinks are your best options - I'm interested in what he/she is going to say. Good luck, GS - hope everything works out in your favor!

[grandmasusan]

Whew! Glad to hear you filed with a lawyer!


Your lawyer understands your situation best, of course. But if I were you and there were no hidden traps involved, I'd be getting your trustee's permission to sell your house if possible and rent for a few years while the market settles itself.

Yes, there will be a tax hit by renting, but at least you won't be tied into a second house that might keep declining in value if the housing market continues to spiral downward.

Let us know what your lawyer thinks are your best options - I'm interested in what he/she is going to say. Good luck, GS - hope everything works out in your favor!

I agree that is my best option...so does that mean I would have to refile or do I amend my plan with my new rent pmt and reduced income of the last 6 months? The goal is to have the lower housing pmt to be offet by my lower income. I don't want my plan pmt to increase!

[lrprn]

I agree that is my best option...so does that mean I would have to refile or do I amend my plan with my new rent pmt and reduced income of the last 6 months? The goal is to have the lower housing pmt to be offet by my lower income. I don't want my plan pmt to increase!

Your lawyer will have to file an amended plan.

Be sure to discuss this plan with your lawyer. I agree that you don't want to end up paying the trustee more than you absolutely have to for the remainder of your plan. If giving up the house and renting creates too much new income vs new expenses and would increase your monthly payment significantly, then have your lawyer run the numbers with you purchasing another house.