I went for a loan modification and came out with a bankruptcy form.confused

[2strong]

[NowImDownInIt]

You can pay your unsecured credit off in 5 years in a chapter 13, or in my case 3 years as I am below median, but I doubt you are since you have so many mortgages. Anyway, what they'll do, is make you a budget of all your REQUIRED monthly expenditures, whatever is left over is called disposable income. The budget is VERY tight, but worth it. I have $700 left after all my expenses and that full amount goes to the trustee. My payback is at 60% to unsecured, but you could potentially pay back as little as 0% to unsecured. Your mortgages above and beyond the first can be made into unsecured if your house has negative equity with just the first mortgage.

This is a very simplified explanation... but I'm sure your questions will be answered.

[busby]

Hello 2Strong -

While I can't answer your questions regarding your HELOC's but I can provide general information on how the bankruptcy procedure works.

When you file for a Chapter 13 - your income and living expenses are used to determine how much extra income is left at the end of each month. That amount is used to determine how much your payments will be each month for the bankruptcy. It has nothing to do with the amount of debt that's listed within the bankruptcy.

For example - let's say you bring home $5,000/month and have living expenses of $4,800 - your monthly payment to the trustee would be $200/month.

Your monthly expenses do not include payments your currently making on credit cards but do include utilities, food, rent/mortgage and so so - those monthly bills will be rolled into your trustee payment. There are exceptions but basically that's how that works.

They don't "cut" the amount owed to any creditor but the purpose of a bankruptcy filing is to determine how much you can pay each month and all of your creditors are paid based on priority (a mortgage would be a priority claim - your Mastercard balance typically would not be) and then based on the balances.

So whether you are filing on $100,000 in debt or just $10,000 in debt - your monthly payment would be the same as it is based on what you have left over at the end of the month.

There are a lot of other message threads here that talk about what should be listed as expenses and I think most people miss listing some when they file (ie. dental expenses) so take some time to research what all can be listed as expenses. This will lower the monthly payment and make living within a chapter 13 more comfortable.

[2strong]

my home is worth around $360,000 and my first alone is $377,000 so yes i am below value on all my mortgage loan. i also have a sttlement for a injury at work which i have not even got a court date yet but probably get some money. it seems they take everything you get is there a way to avoid this. or will they just take the full settlement and leave me with nothing? is there a way to put this off for a little bit and get a game plan together, i read that i shouldnt file if i have and old car because if i need one while in my settlement it will be hard get 1. i have 2 old cars and me and my wife both commute but i dont know how long she has left at her job they are laying of like crazy.

[NowImDownInIt]

I would suggest holding out, at least until you know what's going on at your wife's job. Being laid off while in a ch 13 is very difficult, that is what I'm going through right now. Your attorney will likely hint that you should probably get a new car... Also the trustee is entitled to take your settlement and there is not too much that you can do about it... It will go toward your unsecureds and not toward your plan base.

[2strong]

is there such a thing as not making enough money. we are behing right now but if my wife gets laid off i will bearly be able to make the morgage. can they say sorry you have to give everything up. thats why i was counting on that settlement to make up the difference. how would they know if i got a settlement do they check your bank all the time or get your taxes every year. also i have a 401k that i was going to use to catch up from my previous job i have the check right now and was waiting on cashing it till i figured out what i was going to do. if i filed for BK i was just going to roll it over will they make me take it out and then take it from me

[StartingOver08]

How they know is you have to provide your information to the Trustee. I have noticed that some attorney's collect more up front than others so they are more prepared when the Trustee's office requires more info. I had to provide min 2 yrs bank statements for every account that I had - open or not. Also had to provide 4 yrs tax returns. 3 yrs cc stmts 10 yrs real estate transactions (mtg's, deeds, mtg apps) etc Your 401k is probably one of the exempt items - just roll it over. You will want a list of what is exempt for your state (amounts) so you can adaquately prepare.

I made some mistakes because I did not know and did not find this site until recently. For example, I had funds in my life insurance that I drew down, which I should not have prior to filing.

[Flamingo]

is there such a thing as not making enough money. we are behing right now but if my wife gets laid off i will bearly be able to make the morgage. can they say sorry you have to give everything up. thats why i was counting on that settlement to make up the difference. how would they know if i got a settlement do they check your bank all the time or get your taxes every year. also i have a 401k that i was going to use to catch up from my previous job i have the check right now and was waiting on cashing it till i figured out what i was going to do. if i filed for BK i was just going to roll it over will they make me take it out and then take it from me

Here is what you do - take some deep breaths, the world will not end in the next few days, and call and make a couple free consultations with BK attorneys. Call your State Bar Association (in your phone book under your state section), advise them you poissibly need to file bankruptcy and would like the name of a few reputable and good BK attorneys in your area. Most attorneys give free initial consultations. Take with you a complete listing of all your monthly payments, bills, sources of income, paystubs, asset listing and copies of your last tax returns, state and federal. You will be advised exactly where you stand at the moment and what you can and cannot do at the moment. Do NOT touch your 401(k). Best of luck to you.

[2strong]

thanks i have a appointment today at 4:30. everything just seems like its closing in which is why i seem rushed but after reading lots of post so far it seem planning before you file will help tons. im reasding the tactical manual right now. lots of good info

[NowImDownInIt]

They'll ask you if you have any potential or pending law suit/injury settlements.

[2strong]

well i had my meeting yesterday with the attorny and after everything he suggested that i do a loan mod first and see what we get with that then file for BK 13. do you guys really think i need this. i have 31,000 in cc and 5,000 in student loan which i believe cannot be touched anyways. i might get something like 25 thousand from my settlement so im thinking use 12,000 toward my cc and just try to make from there or should i start fresh with the BK i really dont want to give up my settlement it was from a back injury at work and had major surgery i would like to keep some for myself. anyways i atleast got the ball rolling with the loan mod for now till i figyre out what to do next. should i wait till i get my settlement, fix my cars or by a better used one clothes and other thing that i might not be able to buy if i go BK, sorry guys my head just keeps spinning with idea's to make sure i do it the right way.

[StartingOver08]

We don't have enough information about your situation. But, have you considered two things with the settlement (assuming the loan mod works)
1) keep enough cash to get through this rough time coming up
2) trying to settle the cc debt for much less than what you owe - you can negotiate with the cc people - its not easy, but they will take a much, much lower lump sum payment. You might be able to get rid of all of your cc payments for less than $10k.