ch 13 probs

[Donandcarol]

I recently filed ch13 mainly to prevent foreclosure on my house. I was way behind on a subprime mortgage. I also had about 10,000 in unsecured debt. I currently live in Florida and have recently accepted a better paying job in Texas. The travel to get the job caused me to get behind on my 2 car payments (not part of plan) and house payment. The credit union is objecting and I have a hearing in march. The plan has not been confirmed yet. My main question is .....in about four months I will recieve money from my retirement plan which would pay off all debt and attorney fees. The only thing left would be the house which will be hard to sell due to no equity and lousy market. Is it possible to back out of the bankruptcy that I have been in since november? My vehicles will be caught up next week. Any thoughts or suggestions would be greatly appreciated.

[MajorMike]

Nope, you filed, and it remains on your credit now for 7-10 years. You can pay it off, etc, I believe but it will still be on your record. Anyone else can chime in but I'm pretty sure from what I've read that that's what happens.

[woeisme]

Your retirement funds are exempt from your creditors, you are really doing your future a disservice by cashing them out, paying the big tax hit and penalty, just to pay off debt that you will eventually get discharged or paid back in your CH 13. (I've done the same thing myself in the past tryng to pay off debt, so I'm not trying to sound all holier than thou, I just know I really regret it now. I had 25K in my account, cashed it out to only net about 15K after penalties and taxes, used it to pay off my truck and some other credit card debt, and now about 6 years later don't have that money and still in debt so in a CH 13 plan for the next 5 years.)

You could still back out of the CH 13 and let the house foreclose since you plan to leave FL anyhow. Your credit will be toast for a long while with both those on your report, but if your job in Texas is good, and you can reasonably pay back the other unsecured debt and keep making your car payments, I would definitely try to avoid cashing out retirement funds if at all possible. If you used an attorney for your CH 13, call and ask what your options are for letting the house go. Good luck.

[Donandcarol]

paying the debt will only take about 25% of my retirement money. The new job pays a lot more with better retirement....I still have 20 years till retirement. My main concern is what to with the house since I can't break even on it. I also want to keep my vehicles which are still in good shape. I asked the lawyer about this situation during the initial consultation and he stated filing was the best option. I don't think I can keep things going for five years on the Ch13 plan.

[busbis]

why can't you surrender the home in bankruptcy and pay off your bk early with your retirement funds and get the discharge?

[Donandcarol]

thanks for the feedback!