Scared. Need advice! Will this plan work?

[luadams]

We haven't filed yet and are getting advice from lawyers. Went to see one and he says we would never qualify for 7 but could easily do 13. He says if we unload our retirement property which we own outright, but continue to pay our astronomical mortgage payments, he can do the bankruptcy and get us a payment below $375.00. Then we can unload our main house and the rentals later.

Seeing another lawyer next week as a second opinion.

Short story: Got caught in housing bubble. We have stable jobs, both have been there for 10 years. Make $9,000 month and can barely afford groceries now.

Main house: Owe: $450,000 It's worth: $300,000
Rentals: Owe: $400,000 Worth: $300,000
Unsecured debt: $60,000 Interst rates eating us alive
Unsecured equity mortgage: $30,000
Loan on my 403b plan: $20,000

We are in our 50's and do not see how we can dig ourselves out of this mess. We have our retirement property up for sale because I WAS going to try debt settlements and loan remods. But I'm thinking what for? If I was one of the lucky ones who actually got a remod, the mortgage would still be alot higher than the property will ever be worth. As for debt settlements, I could not negotiate settlements at less than 60% so why bother.

Our dream was to sell everything in 10 years and build a new home with the sale profits - on the retirement land which we own outright. However, we've come to realize that we could spend the next 10 years trying to make the ever-rising mortgage payments on our real estate, or just walk away from it. Deeds in lieu. File bankruptcy for the debts which we don't see how we'll ever pay off, rent a house, and then just pump money into our retirement plans for the next 10 years. After all, our property will never be worth what we owe.

We could care less about our credit score. Don't plan to buy another home because in 10 years, if the lawyer can truly get us a $375 mo. payment, we can put alot of money away add that to our retirement accounts and still have our retirement dream of building a house on a decent sized piece of land. The bankruptcy will be behind us.

Does this plan make any sense at all? Can you invest money in IRA's while making bankruptcy payments?

Is the lawyer talking trash when he says he can get our monthly payment that low?

Does this mean we get to keep the rest of our $9,000 a month?

Are you sorry you filed bankruptcy?

Please, I'm only starting to learn about bankruptcy.

We have to start over in our middle years. It's frightening.

[Billssuck]

I understand were you are coming from. Me and my husband are in our mid-40s and we just filed yesterday. It is very scarey. What actually convinced me to file was that I knew we couldn't pay off $107,000 in unsecured debt and also be able to retire in about 20 years.

As far as your monthly payment goes, it will all depend on your disposable monthly income, your non-exempt assets, and how much you can afford to pay back your creditors. We make about $5,700/month and our proposed payment (we are non confirmed yet) is $125/mo.

Am I sorry that I filed bankruptcy? Well in my case, it is too soon tell. But I am optimistic that this is the right thing to do. See I have a pension right now and I have been working at a federal job part-time waiting on a full-time position. Guess what? It is anticipated I'll go full time in about 3 years and the ch 13 will be behind me (and the unsecured debt), there is light at the end of the tunnel. Plus, our housing market here hasn't hit as bad as other places. I did a comparable market analysis from a local realtor and found out that we are only $7K in the red in equity. So...we are keeping the house and plan on retiring here. Once we get through these 3 years and get on the other side, our life will be on a financial upswing.