Behind on 13 payments, trustee sends letter

[jetsfan2007]

So I recieved a letter over the weekend from the trustee stating since I am 3 months behind on my current plan payment, I need to bring current within 2 week or a motion to dismissal will be filed. I let my attorney know last month due to my type of work(commission auto sales) that since we originally filed last October its been tough to keep up the house, and I had fallen behind onthe bk payments, but he said try to bring it current asap. Now I receive this letter, and Im going to call my attorney in the morning, but need to know what to expect.

1. Can I get my payments possibly lowered due to my income dropping since the original filing?

2. Can I convert to a 7 without having to losemy house?

all replies welcome

[rrockinggramma]

If you filed to save your house and put arrearage into your plan and you convert then the lender can and probably will foreclose unless you can modify your mortgage loan or bring it current. So you might have to make a choice, convert to 7 and discharge all unsecured debt and let your home go. But that depends on if you could or can afford the home to begin with. Perhaps walking away and renting something less expensive might be the best scenario for now.

[HHM]

How long have you been in the plan?

[qwertysue]

How long have you been in the plan?

I believe the OP filed in 10/07


JF...sounds like you've had a rough start. Hopefully your attorney will be able to answer some of your questions sooner rather than later!

[HHM]

JF...sounds like you've had a rough start. Hopefully your attorney will be able to answer some of your questions sooner rather than later!

Being 3 months behind is bad especially in such young plan.

As was already pointed out, if you are in a 13 to save an asset and have included those arrears in the plan...if you convert or dismiss, there is a good chance you will lose that asset. You really have only 3 choices.

1. Come current (had you been proactive about it, and took some action to request a payment abatement BEFORE you went into default, you may have had some options).

2. Convert to 7, assuming you can qualify for a 7, but realize any secured asset that was in arrears will be at risk.

3. Voluntarily dismiss your case. However, that puts you back at square one with your creditors.

The ability to modify a plan after confirmation is limited, see section 1329 of the BK code.

[MajorMike]

wow, I'd crap my pants if I was 3 months behind. We are paying ONE week late this month and I'm crapping...

[jetsfan2007]

update:
I did have to file due to being behind on my house payments at the time. The amount of the money owed in arrears for the house equals about how much the monthly payments are that I am behind. The problem is theres no possible way in the 2 week period they are requesting I can make it current. I called my attny yesterday and left a message, but they said he was in court all day. The only thing I have included in the bk thats secured other than the house is the car, and I had priority debt(14k IRS back taxes)

[rrockinggramma]

How important is saving this house for you. With the new law, if you allow this to dismiss and then refile, you will not be given the auto stay after 30 days. That means the second you are behind again, the lender will begin to foreclose etc and you won't be protected at all by the chapter 13. So if you convert to a chapter 7 the only thing discharged is unsecured. You will still owe the IRS and the car and the house. The IRS would work with you on repayment and of course the car would also or they would repossess. You need to contact the FHA secure office and see if they could help you with the house. But if they can't then I think you should consider letting the house go, finding a place to rent, making payment arrangements with the IRS and continuing your car payment. The downturn in the economy isn't going to end soon and it may be awhile before your income comes back up. GL Or I would be asking a relative (mom/dad) for the money to catch up and keep you going. But if you do that, realistically, can you keep up the current payments? Maybe your attorney can modify your plan, but once you are way behind, many trustees are not willing to work with you on modification.

[jetsfan2007]

The IRS didnt want to work with me on a repayment plan the first go around, that along with the sudden loss in income got me to where I am now. I talked to my attorney today, his advice sadly was along what all of you had said. he said my plan is currently set up as a 97% payment plan, I guess meaning basically all the creditors were getting all of what they owed over time. Since the last 6 months my income has literally dropped in half there may be a shot and modifying but he said the trustee would have to approve and probably would have a hearing./

[rrockinggramma]

well good luck with that. I know that trustee's do want the plans to succeed but remember the priority IRS debt, the arrearage on the house and the car (if included) are paid back at 100 percent. Those have to be funded fully for the plan to work. I hope it all works out for you

[jetsfan2007]

The arrears on the house(6000)and the car(which was current at the time of bk) isnt as much as the total bk itself(60,000). My bk 13 payment is actually higher than my current house payment by almost 400 dollars/month. And with just my base income monthly I can afford 1, not both payments.