Harder than we thought

[TiredOfItAll]

We filed chapter 13 last July in order to save our home. Initially filed a 7 in the months prior to that because we had a work out agreement with the mortgage company that they cancelled out when we filed the 7 so we had to convert. Then we converted it to a 13, but had to dismiss it and refile it due to something odd happening with the stay over the house. Anyway, we refiled the 13 last July. Made the first payment within the 30 days and have been having auto deductions from my paycheck since then. With the rising prices of everything...gas, food, clothing, heating oil, etc, and a paycut that I took, along with a new, but blessed, addition to our family this past year, it has made this nearly unbearable. We are fighting all the time about money. It is really putting a strain on our marriage and making everything else seem so much worse. It is scaring me. We are not making it from one payday until the next. It is very very stressful. We are now talking about converting to a 7 and being done with this and having a fresh start. Can we even do that? Does anyone know if it is possible considering what we already did? We have been looking for a home to rent that we will be happy with, or even better a rent to own home(which will probably be hard to come by). If we rent, is it true that with getting our scores up in the next two years we could buy again? Also, and I know it may seem silly, if we convert to a 7, will we lose part of our income tax refund from when we file it in January. We usually get a decent amount and could really use it I am sure. I just want to be able to live again and be happy and relaxed.

Thanks in advance.

[AngelinaCatHub]

Dear “Tired”:

Look, what is important? Your family, or a house? You have come to the right place as when you read on, you will see others better off, and worse off. However to each, it is the end of the World to them.

Go 7 please and get your new start. Your mortgage company does not want to own your house. Perhaps your waffling caused them to become hard? DO NOT reaffirm your house but keep up the payments if you wish to keep it. If in the future, you cannot, you could walk away from it. If you reaffirm, you are stuck.

Please relax as you surely are not the only and in the near future, I fear more will be coming.

I wish you the best and will be watching for your postings. There are many here that can give you experienced education. ‘Hub

[TiredOfItAll]

Thanks for the reply. Our family is of course a top priority, and I am really beginning to worry that the stress and fighting will take some really bad consequences on our marriage. Really the house is not big enough for us anymore, with the addition of our daughter this past November, and it needs a new roof(don't know where the money would come for that). If we convert to 7 we will definitely lose the house, as the mortgage arrearages along with the current payments are being paid through the plan. I think we are alright with this, just needed to talk it through. Finding a rental that we are happy with will take some time, though. I assume we should find something first, and then convert to the 7?

[kimba251]

If there has been a pay decrease you need to have the trustee reevaluate how much you are paying. It may not change by much but every little bit counts.

[TiredOfItAll]

I did contact my attorney back in the summer as I knew this pay decrease was coming, and after checking into things he said there wasn't anything we could do about the payments. Already in a 5 year plan and something to do with large amount of student loans that are in the plan also. So, anyway, not much that can be done with our payment, so time to begin looking at other alternatives.

[Flamingo]

Thanks for the reply. Our family is of course a top priority, and I am really beginning to worry that the stress and fighting will take some really bad consequences on our marriage. Really the house is not big enough for us anymore, with the addition of our daughter this past November, and it needs a new roof(don't know where the money would come for that). If we convert to 7 we will definitely lose the house, as the mortgage arrearages along with the current payments are being paid through the plan. I think we are alright with this, just needed to talk it through. Finding a rental that we are happy with will take some time, though. I assume we should find something first, and then convert to the 7?

When your child arrived in November (I believe you filed Chapter 13 in July 2007?) was your attorney contacted to make any adjustments to your Plan due to an addition to your household and with what you are stating as to a drop in income, it is possible you could have your Plan modified. But if you truly feel you cannot afford your home, you need to consult with your attorney as to all available options for you and what would be the best under all the circumstances. Remember, you can always obtain a house; you cannot always obtain the love and joy of a family. Get all your facts and options together, discuss all with your attorney, and decide on what will work the best for you in the long run. Best of luck to you.

[MajorMike]

Thanks for the reply. Our family is of course a top priority, and I am really beginning to worry that the stress and fighting will take some really bad consequences on our marriage. Really the house is not big enough for us anymore, with the addition of our daughter this past November, and it needs a new roof(don't know where the money would come for that). If we convert to 7 we will definitely lose the house, as the mortgage arrearages along with the current payments are being paid through the plan. I think we are alright with this, just needed to talk it through. Finding a rental that we are happy with will take some time, though. I assume we should find something first, and then convert to the 7?

NO offense, so please do NOT take it that way...but if you're struggling this much, why did you have another child right now? I know how expensive that can be and although it is a truly wonderful thing, could it have been held off until you got your finances together which probably would of been a year or so?

[ThreadsSnapping]

MajorMike, did you ever think that it may not have been planned? Things happen sometimes and you just need to deal with them. Not only that but they filed in July and the baby was born in November so she was already on they way when they filed. Not sure what they could have done then.

TS

[TiredOfItAll]

A little offense taken...but will let it pass. As "ThreadsSnapping" said sometimes things happen. As we filed in July, she was already well on her way so absolutely nothing to be done about it then. Also, I am in my late thirties so not always so much time to be put off when having children. Our financial jobs problems stem from job losses that happened to both of us.....first my husbands, and then later a one year reduction in force I had as a teacher. He is now in a secure job and I was recalled and although my job description has changed and I lost some money, I do have tenure now. But, as most of you, I am sure know, once that whole of debt is dug and is so deep it is very difficult to get out. As frustrated and stressed as I may be at this time, I am simply looking to do what is best for us. If it means we now need to convert to a 7 and lose our home, then I guess so be it. I was simply looking for some advice from others who have experience with this.

[AngelinaCatHub]

As Flamingo says, you will find a house. Soon there will be many panic sales and, remember you cannot bk for 7 years after C7. So you will actually be in better credit shape than most and possibly purchase “Contract for Deed”, that is like rent to own.

What I am more concerned with is a possible shaky relationship due to finances. Money is the first marriage breaker as I’ve heard. You must and your hubby must set down together, calmly and realize what you have, what you need, and how to approach this together as a team. If you pull in different directions, communications will break down and things then will get worse. It takes two to argue. Both agree as adults that you now have fair if not good jobs, you have health, and wonderful children or child, you will live until God is done with you, so this too will pass. C7 may be a good option and as in IRS as a C7 survivor, I still have 24K to pay them and I have yet to know how this will go. Your school loans are like my IRS. Get on a payment plan and time will heal it. I sure wish you guys well. ‘Hub

[ThreadsSnapping]

Tired,

First off find out how long it takes to forclose in your state. It may give you a few months after the Ch 7 is done for the bank to go through the forclosure procedings and you can live in the house payment free at that time and build up a savings account. I would just try and find a good rental that fits your needs for now and the next few years and not worry too much about the rent-to-own. I can understand wanting to own again but don't rush it. Better to rent for now and not be stuck in a rent to own that doesn't really fit your needs in 2-3 years. Just take care of your family and get your finances in order. Good luck.

TS

[TiredOfItAll]

Hubby and I had many long talks this weekend and both agree that renting for the next couple of years is our best bet, and we will be able to put money aside into savings for a possible down payment on a new house later. We are actually going to look at a rental tomorrow evening. Drove by it and it looks very nice, and we will be saving nearly $600 a month by getting out of the chapter 13 and possibly into this rental. It is not in the the ideal location for my husband's taste.....he likes living in the country where as I don't really care. This home is in town...actually less than two minutes from my workplace. This would also save on gas back and forth into town as I am always taking kids back and forth to their things they are involved in. Not alot of money saved, but every little bit helps. Hopefully, we will get it. We will see. My questions now are, and yes I will be contacting my attorney and making an appointment.....can I convert back to a 7 since I started in a 7 but had to convert to a 13(this was long before the 341 hearing for the initial 7), and how soon can I have the payroll deductions from pay stopped, as that is money we will need real soon. Also, how much of next year's tax return could I possibly lose and can I possibly exempt my return. Thanks for your help.

[TiredOfItAll]

Well, we looked at a house last night and really like it. We think it will be just fine for us for the next couple of years, and we will hopefully putting the money down for it by next week. Made a call to our attorney today, and got his assistant, as he is in court until 2 or 3 this afternoon. I needed to know for sure that we can do this conversion to a 7. She said she needed to check as she was not sure since we started in a7 to begin with if we could go back to a 7 again. She said worse case scenario would be that we would voluntarily dismiss our 13 and then file again under a 7, but it would be better if we can straight convert as there little fees for that as opposed to another thousand or so to refile as a 7 after we voluntarily dismiss. Does anyone know here if it is possible to convert to a 7 or are we going to be forced to fork out another thousand dollars? If we dismiss our 13 and then refile as a 7, can we wait until sometime after January or February so we can save up the filing fees? Would we have that kind of time. We would be out of the house again and don't think anyone could get any judgements against us in that time. Just trying to get some thoughts on this and get all of our ducks in a row and get on with life.

[Mi Bankruptcy]

Tired,
It sounds like your on the right track. I felt the strain on my marriage when we filed. I also felt resentment building up against my wife for being in debt. A majority of the cards were in her name. However, most of the debt was helping the family. Here's what you did right.

1) you talked about it ( I assume candidly)

2) You both concluded you can purchase new possessions( house).

3) By far... you both made a DECISION. Lack of decision making makes for bigger problems later.

Good luck to you and your husband.. I know after you get through this your marriage will be stronger.

[tunskit]

I don't know about the conversion to a Ch7, but I wanted to address the tax return concerns. The trustee will take your tax return for next year, probably, especially if you wait much later to file. However, you can adjust your withholdings so that you are getting more in each paycheck and less in the tax return. I'm not positive, but I heard the trustee can't take any EIC for which you might qualify.

There is a calculator on the IRS Web site that will help you estimate your needed withholdings in order to minimize your return and maximize your paycheck.

Good luck!