Paid in Cash?

[GettingThere]

Hello, I'm so happy I found this forum! We plan on filing Chapter 13 (to save our home from foreclosure). As my husband gets paid $600 monthly in cash, would a letter from his employer suffice in order for us to qualify?

[StaciMM]

What other income is there in the household? You're going to need to show that you have a steady income in order to submit a reasonable plan.

[bkfiler]

did you seek advice from an attorney yet? doing so might help see if you can get a chap 7 instead. consultations are free. go to at least 5 of them.

[GettingThere]

What other income is there in the household? You're going to need to show that you have a steady income in order to submit a reasonable plan.

So what you're saying is you can't read my mind Staci? ;)

Sorry, I meant in addition to his regular income. He makes around $1900 monthly in a check with the additional $600 monthly in cash. I thought you can't keep your house with a chapter 7, we have about $100,000 in equity. I've been looking for a job but have been having a heck of a time.

[StaciMM]

Mindreading was never my strong point, LOL.

If you're behind on your home and wish to save it, then a 13 would allow you to put your past due payments into the plan and you'd need to keep future payments current. A ch. 7 would not do anything to help with the past due amount, and you're right that the equity could be an issue if you are over your state's exemption.

It would probably be good to go ahead and find a local attorney or 2 to consult with. I'd imagine that showing deposit receipts would be sufficient-but the first thought that comes to mind is you might have tax implications if you're not claiming this extra $600/mo on your income taxes.

One other thing to consider-you mentioned you have ~$100,000 in equity. If this is over what your state allows you to exempt, then you might have a problem w/ a ch. 13. You are required to pay unsecured creditors at least as much in a ch 13 as they would have received in a ch. 7. So, if you were allowed to exempt $50,000, then at least $50,000 would need to go to your unsecured debts over 5 years, plus the trustee fee, your attorneys fees, and the amount that goes to your back mortgage payments. On the other hand, if you don't have much in unsecured debt, this might not be a big problem.

[GettingThere]

Thanks. We really only have the mortgage, owe only $800 on our car, and have assorted medical bills totaling around $4,000. No credit cards, yay! And the cash thing started in the middle of 2005 so it hasn't been a tax issue (yet).

Thank you so much for your insight.

[StaciMM]

With that in mind, the equity would probably not be a major issue. If you had ALOT of unsecured debt, then you'd end up in a situation where it would be impossible unless you could pay $1000-1200/mo into the plan.

Stick around-read alot and ask questions if you feel like it!

[Viper]

How far behind are you in your mortgage payments? How is your credit rating?

It doesn't seem like you have a lot of debt, would you be able to take a second mortgage/equity loan/ or even refi to help get you back on track?

Just a thought... would be a shame to have a BK follow you for a decade if there is away to avoid it.


-Viper