GREAT NEWS FOR CHAPTER 13 DEBTORS, U.S. Supreme Court

[catleg]

I can see points for both sides here, but given that you already have the privilege to time your BK filing to minimize your 6 month lookback, and thus your forward projection; it seems to me the 36 vs 60 month issue for above median debtors is a big issue. Although the reality is it probably doesn't impact a whole lot of folks, but the ones it does impact it is a real kick in the nuts.

[HHM]

This has got to be the first time I've ever seen HHM advocate debt settlement rather than using the bankruptcy process. :-)

I'm not here for an argument

LOL, true enough.

I am more a fan of settlement when it comes to 2nd mortgages. Also, although I often rail against debt settlement, I do have a set of criteria for when it makes sense, the thing is, most people who initially go down the debt settlement path have no rules or decision criteria to really determine if it makes sense.

[JEM]

I'm reading and re-reading this thread because I'm not sure I completely understand.

We are really on the borderline (over, under, over, under depending on dh's pay that week) of qualifying for a Ch7.

The reason is because his company has done quite a bit of hiring the last 6 months and he trains their new employees and gets training pay. This will NOT be recurring money, but sure has boosted his income to look like he makes more than he will in the future.

I lay awake at night worrying that we'll get put in a Ch13 because of this income, and we'll have to make trustee payments based on income they think we'll keep getting, but won't.

Does this mean "temporary" income like this won't be counted into a payment plan?

[catleg]

I love that skit. Only I wish it was the entire skit from end to end!

Then you'll like this one better

[justbroke]

I'm not here for an argument

I love that skit. Only I wish it was the entire skit from end to end!

[catleg]

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

This has got to be the first time I've ever seen HHM advocate debt settlement rather than using the bankruptcy process. :-)

I'm not here for an argument

[justbroke]

I think HHM is just saying... walk away. I'm in that position and I'm prepared to just walk. I converted my Chapter 13 to a Chapter 7 because I initially wanted to save property. Now, I'm post discharge and the Mortgage company modified my mortgage and dismissed their foreclosure action in the local court. I have no equity beyond the first, and about 5% upside down (when using the first only).

I could not see being in a Chapter 13 for the next 3 years (I did 2 years out of 5), just to strip the second. Just wasn't worth it for me.

[JimBK2009]

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

Oh come on, are you really telling people to just "settle with the 2nd mortgage company for 5-10%" rather than file a BK and get complete protection from the court.

Do you realize,

1) The cost of BK at $3600 is a lot cheaper most of the time than spending all the time and effort trying to settle with the 2nd,

2) The 2nd mortgage company holds the deed to the property and you've got to get it back from them,

3) You have no protection from foreclosure if the 1st and 2nd mortgage are from the same lender. The 2nd can foreclose in these cases since the 1st will always give them permission, AND

4) Lately 2nd mortgages have begun foreclosure proceedings against someone even though they have no equity past the first mortgage and it forces the client to either go into court and fight them off (a costly endevour to say the least) or risk losing their home,

Its amazingly bad that you would tell people to just settle on their 2nd and deal with all of the legal risks rather than get full protection from the bk court and pay $3600 over 3 years. Amazing.

[mkstlowe]

This is great news. My 341 is tomorrow. I had 1 time bonus for a company merger. So he was putting the note why not to include it. Now is might not be an issue after all?

[HHM]

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

[JimBK2009]

Not sure it matters that much, would you rather be in a chapter 13 at a payment you "can't" afford and therefore not be able to receive any discharge in any BK Chapter, or be in a 60 month chapter 13 at a payment you CAN afford and be out of debt in 5 years.

What I am referring to are the $100 for 36 month payment plans with a lien strip.

This will affect them because:

1) Anytime Debtor's want to buy a car or get a loan they have got to go into court and get permission (and in the 4th and 5th year people's car usually craps out and they got to get a new car or have to make a new purchase - lol, I mean think about the guy who is locked into a 5 year payment plan and the car he is paying for is in the plan... its not gonna be paid in full for 5 years)

2) If they had a car loan with more than 3 years and they had a 3 year plan they could pay off the car outside of the Plan. NOW if their plan is 5 years and the car goes into the plan they have to pay off the original loan + 3-6% interest (In Re Till)

Im mean think about it... yes if they owe a lot they can stretch it out to 60 months, but by doing this they are paying a trustee 9.6% interest on all payments for 2 extra years AND they have to go into court to get permission from the court to buy/sell property for a longer period AND if they lose there job in the 4th-5th year or suffer any financial setback they risk having there whole case thrown out and have to start over unless they get a hardship discharge or modify the plan,

Trust me, in my district people are not happy... you want to get out of BK as soon as possible, you dont want to be stuck in it for 5 years

[HHM]

Im thinking that you should change the title of this sticky:

The Hamilton v. Lanning decision makes it clear that an above median chapter 13 debtor can no longer propose a 36 month plan. (In Re Kagenveama 541 F.3d 868 mechanical approach was overturned).

What this means is that if a debtor is above median by 1 dollar, it automatically becomes a 60 month plan rather than a 36 month plan. (in many district courts, debtors could propose a 36 month plan if after subtracting allowable expenses on the means test they had negative DMI)

This is bad news for debtors.

Not sure it matters that much, would you rather be in a chapter 13 at a payment you "can't" afford and therefore not be able to receive any discharge in any BK Chapter, or be in a 60 month chapter 13 at a payment you CAN afford and be out of debt in 5 years.

[JimBK2009]

Im thinking that you should change the title of this sticky:

The Hamilton v. Lanning decision makes it clear that an above median chapter 13 debtor can no longer propose a 36 month plan. (In Re Kagenveama 541 F.3d 868 mechanical approach was overturned).

What this means is that if a debtor is above median by 1 dollar, it automatically becomes a 60 month plan rather than a 36 month plan. (in many district courts, debtors could propose a 36 month plan if after subtracting allowable expenses on the means test they had negative DMI)

This is bad news for debtors.

[HHM]

You can probably modify your existing plan under section 1329.

It really depends on how your initial plan was set up. Obviously, if you have been in a plan for a few years based on the "mechanical approach", that is de-facto evidence that you can afford that payment. So, unless something has changed, it is unlikely you would get a new payment by redoing your budget.

[CCB35]

I dont supposed this is going to help anyone who has been in bk for a while is it?
just for new filers?