Too good to be true?

[squeaks]

Had our sign and see meeting with our attorney and viewed his proposed payment plan. Basically, with him using the IRS allowances in every category but mortgage, we show no disposable income and our plan only covers payments for our mortgage arrears, back property taxes, our two vehicles which our current and the APR on both has been reduced.

After paying off all of our commitments except our CC's, we usually had enough left for a decent living as far as food, clothes and little bits of entertainment here and there.

Our second is to be lien stripped so that $569 is going away. I did the math and it seems we are going to have even more breathing room financially than before. Our attorney even thinks we can claim a few more expenses.

He's been doing this for 28 years, has lunch with the judges, knows the trustees pretty well and thinks this is a sensible filing.

Any thoughts on the odds this will be confirmed?

Also, one of the vehicles has lousy fuel economy and I was toying with letting it go and getting a cheaper vehicle with better mileage. The care I have is an 04 Mustang that we fell into after our car got repossessed. We threw our credit out there and the first one that responded said we had a choice of the Mustang or a more expensive Impala. I needed a car by that morning for work so we signed and immediately had buyer's remorse. I panicked and made a bad decision. I should have rented and waited for other offers but what's done is done.

The car will be paid through our C13 plan so I was wondering how hard it may be to trade it for a cheaper vehicle or just giving it back.

Thank you in advance for any responses.

[becky20]

I'm in a similar situation. We have two car loans that are crammed. We had qualified for 7 but because our mortgage and car payments were behind, we did a 13 to save our house and cars. Our payment pays our two car loans, and our arrearages for the cars and house. Our payment for the two car payments was $768 and our proposed payment in the 13 is $550. Curious though about stripping the 2nd mortgage. I was told they don't do that, but obviously that is not the case... What state are you in? Do you know the logistics of this? I'm in AZ so house values have dropped dramatically the last 2 years or so - between our 1st and 2nd we owe about $180K or $185K and I'm guessing the value is about $140 (in todays' market it's hard to tell exact figures). Our 2nd mortgage is 48K of the 185K and if I could strip the 2nd, I'd be estatic... I'd resolved myself to not being able to but would love to hear more from you...

[squeaks]

My understanding is that if the value of the house is equal to or less than the balance on the first then the 2nd can be stripped as it becomes unsecured credit and is no longer a mandatory payback in a Chapter 13. I had read a little about it and when my attorney starting asking questions regarding our house value, I figured this would be why. We had the house appraised last week and the appraiser said we should have no problem coming in under the 1st.

I never imagined I'd be hoping our house dropped in value but desperate times require desperate measures I guess. I've gone over our budget so many times and simply cannot believe we are going to be left with a decent amount of money to live on. I know there will be objections from our creditors but I know that the facts our that we just don't make enough to pay on these. We amassed 90 percent of our unsecured credit after I lost my job due to an injury and after spending 5 months limping into interviews and being unsuccessful, decided to try life and health insurance with the hopes I could be successful and pay everything off.

The firms that I hired on with said that they all lived on their credit cards for the first year or two then their residuals started pouring in and they were off to the races. I just ran out of time. We're just one of those cases where the carpet got pulled out from under us right at about the time the current mortgage crisis happened so our $90K in equity I was hoping to use just evaporated.

Hopefully the fact I got hurt and lost my job will shield me from any accusations of abusing the system and help make our case an easy one to decide on.

Hopefully some of the above will help you and I wish you the best of success.

[AngelinaCat]

I am a C7 so cannot advise on 13 cases, but if you have a vehicle that is not fuel efficient, and that you can get rid of for a more economical vehicle, I would do so. Please understand that I am responding to ONLY that one item in your post. I have no idea of the 'Larger Picture' involved.

Good luck!

[halloweendmb1]

How does a second mtg just disappear?

[liz417]

Hi Squeaks,

I'm glad your meeting went well. I am getting ready to file for a ch 13 myself and recently I gave up my truck and got a more fuel effiecient car. With gas prices the way they are, I doubt the trustee will object. We spend over $500/mth on fuel alone!

Can I ask, what are your ch 13 payments (I know you are not confirmed yet)? Also, sounds like you have a great attorney, who knows the "ins and outs" of the bankruptcy law, so I think you'll get confirmed soon.

Good Luck!

[BigJohn]

Squeaks, what you wrote sounds about right. We haven't filed, but our lawyer wants to lien strip the second mortgage (which we got appraised so we can), include both vehicles (new) in the payment, and basically pay back nothing on credit cards but pay on the value of our store. Right now, we haven't bought anything for the store in the last 4-5 months - just reducing inventory.

[squeaks]

Its looking like a total of $2300 which includes:

Mortgage Payment 1469
Car 250
Truck 77
Mortgage Arrears 300
Back Taxes 150

Before filing our payments were:

Mortgage Payment 1469
2nd Mortgage 569
Car 450
Truck 250

Our budget looks a little like this:

Take home income combined 5200

Utilities(Gas and Electric)- $350
All insurance $250
Taxes $200
Child Care $300
Cable, Internet, Phone $160(going to drop phone so $110)
Sewer, garbage $80
Gas and Maint. $570

So a payment to the trustee of $2300 and $1860 of non discretionary money going out leaves us with about $1100 for food, houshold items and misc. which seems doable. Hopefully this will stick and we will be in a plan we can complete.

This forum can be scary reading about how some people are just strapped each month and it makes me wonder how many people actually complete the plan.

[becky20]

Squeaks, can you tell me what state are you in?

[halloweendmb1]

was your second a line of credit or a loan?

[squeaks]

Becky, as long as you can assure me you're not a trustee I'll assure you that I live in California.