Chapter 13 Questions (Filed Ch 7 4 years ago)

[killi]

***Edited/updated 5/3/08***
(fast forward to end of this post for accurate info today)

Ok, so i was discharged Ch 7 12/2003. Big divorce and a mountain of bad finanial decisions.

Forward to today. remarried and wife became pregnant and devloped some health problems, involving hospital stays. Baby is ok, due in 2 months. Lost 40% of our income. Mortgage alone is 80% of take home pay. 2 vehicles covers the rest. I am about $2000 to the negative of take home, and credit cards have been keeping head above water. Tried selling (Las Vegas market is toast), but not going to happen.

So i have to get out of the house. It simply will not allow us to provide for our child. I am willing to lose the home and cars in order to provide a stable home for the family (i have a daughter as well, non custodial, couple weekends a month)

So, what will i likely face, when my 3 secured payments almost are at 100% of my income, when i still have $50k in unsecured on top of it? My income is 5750 pre tax salaried, about 4200 after taxes and insurance. Mortgage 1st/2nd 2500/700, vehicles 2 at 1000. I work in real estate marketing/production, and the market has caused my bonuses to evaporate. My home value is about 80k in most estimates less than my loan of $458k ($365 to the first interest only, 94 to the second)

I will either foreclose or Ch 13. Any advice? Guesstimate numbers on a Ch13? Can i do a Ch 13 since all my debt is secured?

I aobviously will meet with a lawyer, but was hoping for some experienced chat about what to expect. thank you

[253BK]

Short Sale the house I can hook you up with someone that works in NV chapter 13 can help you keep the house but if your payment is to high and you are over mortgaged then I would think about getting out and not reaffirming!

Chap 13 can be done with unsecred and secered credit so dont worry about that! I would try and keep your cars and find a new place to live beofre you file!

Meeting with a lawyer would be best make sure to write down your questions can be hard to remeber everything!!!

Good luck

[killi]

thanks, yea forward me the contact info about your short sale contact. might look them up. any other suggestions out there?

[car67]

I think you keep the house ditch the cars buy one reliabe ride cash and carry and keep home. If your forced into a rental and you think your saving your wrong for two reasons.

The rental will cause you to loose a huge tax deduction in not owning your home
The lower rent payment will mean more disposable income which will go to the Trustee in 13

Just explored pretty much same scenario.... Do all you can keep your home keep the tax deduction and it will mean less money to your unsecureds in chapt 13

[killi]

the thing is, my house payment is about 3200/mo 1st and 2nd. and now that i am the sole wage earner, i am clearing about only 4400. my soon to be born child will increase my health care contribution and reduce my take home to about 4100. I have already applied for loan mods with both mortgage holders, and i think i will be reduced to about 2900/mo. but it is a huge mrotgage payment to only have abour 1200 leftover. does this still sound reasonable for a BK scenario? I could easily get rid of my 690/mo vehicle and just keep the 400/mo. leaves 900 for everything else, of which 250-350 will be student loan. still feels extended. perhaps the LTV will be so low that i can get a lien strip of the second? i know its very close

[krielly]

I think you keep the house ditch the cars buy one reliabe ride cash and carry and keep home. If your forced into a rental and you think your saving your wrong for two reasons.

The rental will cause you to loose a huge tax deduction in not owning your home
The lower rent payment will mean more disposable income which will go to the Trustee in 13

Just explored pretty much same scenario.... Do all you can keep your home keep the tax deduction and it will mean less money to your unsecureds in chapt 13

Sorry, but I gotta chime in here.............. Why in the heck should the OP keep the home for a tax deduction when they are approximately 80K upside down???????? That just doesn't make one bit of sense to me................sorry.................

Meet with an attorney, or two or three. Discuss your options, and see where you stand. You definitely should be able to pre-plan on this and with the right budget come up with a manageable chapter 13 and start a new life with your new little one!!!

Make some appointments and let us know how things go with your consults!!!!!!!

[killi]

well, the entire scenario has changed. unbelieveably i just got laid off 3 hours ago. so there really is only one scenario. Ch 13 everything, inc both cars, and rent, right

[krielly]

Oh man.........sorry to hear the news of your layoff........
I think you need to consult with some attorneys asap.

Not sure if you will be able to do the Chapt 13, as it is a "wage earners" plan..............unless you able to secure new employment soon.

Is this a permanent layoff, or temporary?

Please call some attorney's right away and set up some consults. It will be better to know where you stand, before you start making assumptions about what is going to happen.........

Best of luck to you!!!!!!!!!!!!!

[killi]

OK, I am back. Child was born and healthy, and just started a job Last Wednesday. Severe reduction in what i was making though. I am not making 35k/year (brutal LV job market). Savings depleted to about 2,000 that i have in an envelope to pay lawyer and rest for a deposit on a rental house/apartment when i move.

Anyway, I have been getting everything together to file, but i wanted to wait about 2 months to save the income/money up for some time of emergency fund.

I will be including all cc's/home and one vehicle. I was thinking of saving the 423/month vehicle as it is an 06 and pretty reliable and great mpg (Ford Fusion)

Any suggestions/comments. I am trying to figure out how much i will have as disposable income, and it looks like almost 0 with a
rental GUESSTIMATE of 1100/month
Child Support of 306
car 428
insurance 1 car about 115
utilities 200
tv/internet/entertainment 100
food/formula 400
repair/maintenance 100
medical 40
transportation/gas 180

all equals about 3000/month

35k/year = 2916/month before taxes or deductions.

What happens in a scenario like this? surrender the car too and try and get a beater? my job requires something reliable, though it doesnt have to be new.

anybody able to chime in?

[woeisme]

if you can hold out a while longer to get the 6-month lookback to include your new earnings, I'd go for a CH 7 since you don't care about keeping the house and vehicles. Dump all the debt that way, secured and unsecured, then your entire income goes to your expenses, not to debt or a CH 13 trustee. Just my opinion, but CH 7 sounds like the route to go from what you have posted so far.

[killi]

Unfortunately i filed for Ch7 in 2003, September, discharged in December 03. I would not be able to file again as a ch7 until 9/2011. Likely, the Ch13 will be a 3 year and completed by then, since my income is under median...

[krielly]

Killi,
Doesn't sound like you can file a Chapter 13 either.

Chapter 13 is a wage earner plan. You need to have disposable income to pay into the plan. If you are in the negative every month, you can't afford a plan payment, and will not get confirmed.............

K

[Minnymouth]

Sounds like you might fall into that case catagory known as "between a rock and a hard place".....

The fact that you have a recent Chapter 7 is definitely going to hurt you and no disposable income for a Chapter 13 puts a stop to filing that also.

You definitely need to talk to an attorney and don't be surprised if you hear "we can't help you", your in a postion where you can't file!!!

You may end up just letting the home/cars go back and toughing it out as much as possible till you can file later on.

You will know more where you stand after you talk to an attorney......

[rrockinggramma]

what will happen is you will file a chapter 13 and your creditors (unsecured) will get nothing. LOL go for it and file the chapter 13. It will probably pay the attorney fees for filing. Attorney's can write up chapter 13 plans that pay next to nothing on all unsecured. Get out from under and enjoy your new family. see if you can cram down the car in your plan

[killi]

The thing is, i can probably show 100-200 disposable income, i would just rent something for 1000 instead of 1100 and thats that. I can budget well and have the ability to not overspend. I had actually been doing quite well the past 4 years until i was let go from my good paying job. I cant cram the car since it is not 901 days old. Bought it June/July 2006.

also, i was thinking, that going down to 1 car will reduce both the insurance and the transporation fees. All i need is to be able to get approved for a plan that lets me pay 100-200/month, and I am good to go

Got 3 appointments this week on Wed and Thursday. Ill post what happens.