I'm Lost!

[Guest123]

We are considering a Chapter 13. We first have to see if it will cause any problems with work.

I am lost about the payment plan you get from it.

Right now we are current on everything but are at a stand still on paying anything off. We are lucky to have a job that has scheduled overtime and allows us to pay utilities in advance. If we didn't have the overtime we wouldn't have enough to pay the bills monthly.....not to mention get food and gas.
We can't rely on the overtime forever and have to do something to get out of this mess.

Mortage is around $180K but the house is apraised at $90K
Home equity around $35K
Credit cards around $55K

We make really good money but have been living way out of our means.
We have 2 cars we are making payments on, 2 quads we are making payments also. Our house hold stuff is simple...couple of tv's, couches, beds and a table.
Sad we don't have much to show for all of the $55K in credit cards and $35K loan.

With all of the bad companies that do the credit counsoling programs, we don't even consider that an option.

What do they make you pay and will I have to give up much to do the chapter 13? Not that I want to get out of my debts for free but from lurking around it just looks like this bankruptcy will only be a payment play!
How does that work?

Thanks

[espo1357]

We are considering a Chapter 13. We first have to see if it will cause any problems with work.

I am lost about the payment plan you get from it.

Right now we are current on everything but are at a stand still on paying anything off. We are lucky to have a job that has scheduled overtime and allows us to pay utilities in advance. If we didn't have the overtime we wouldn't have enough to pay the bills monthly.....not to mention get food and gas.
We can't rely on the overtime forever and have to do something to get out of this mess.

Mortage is around $180K but the house is apraised at $90K
Home equity around $35K
Credit cards around $55K

We make really good money but have been living way out of our means.
We have 2 cars we are making payments on, 2 quads we are making payments also. Our house hold stuff is simple...couple of tv's, couches, beds and a table.
Sad we don't have much to show for all of the $55K in credit cards and $35K loan.

With all of the bad companies that do the credit counsoling programs, we don't even consider that an option.

What do they make you pay and will I have to give up much to do the chapter 13? Not that I want to get out of my debts for free but from lurking around it just looks like this bankruptcy will only be a payment play!
How does that work?

Thanks

Your case seems not worthy of a BK, especially with the 35k equity.

The lawyer will tell you to do it because they want to get paid.

There are others here better than me at answering this.

bottom line is that the lawyers are usually lazy and want your money, and will tell you to file...

but you don't seem to fit the "model".

good luck.

[Guest123]

I might have worded that wrong but the home equity is suppose to read a home equity line of credit loan of $35K
We have a 2nd mortgage but think it is lumped into the 1st....if that makes sense.

There is no equity in our house now, we owe $180K and it is only worth $90K

Originally bought the house for $140K

[Universal]

The lawyer will tell you to do it because they want to get paid.


bottom line is that the lawyers are usually lazy and want your money, and will tell you to file...

.

A little harsh?

[Floridagail]

My Bf is in same boat with you. We went to see attorney and they said file chpter 13, but he is current. pay back would be 100 percent, and then you would have to pay the attorney 1700 and court fees 2500. Nothing gained by filing now.
We also talked to a attorney that specializes in forclosure. He told us basically stop paying for a worthless mortgage upside down 100 thousand. (bf will retire or lose his job in next 6 yrs or so and house value will not come back for 15 yrs or so) He is probably going to just stop paying mortgage and save money to just pay cash for reo home. The attorney will chg 3000 to defend the mortgage if he gets sued to handle the giving back of the home.

Not sure what to do about ccs as the attorney said to stay away from debt settlement companies. He could keep paying until job loss or retirement then file chptr 7. If we got married now, I would not be able to get mortgage due to the forclosure even though my name is not on deed. some weird Florida thing. so this debt is holding up our getting married. The job is not looking good so we are not sure what to do.

[espo1357]

A little harsh?

After he got the money, my lawyer disappeared. Its all pushed to the paralegal, and he never gets back to me.

Maybe some people are more professional than others. Lawyers seem money hungry above all things.

[SMinGA]

So you owe $145k on the 1st, $35k on the home equity loan & house is worth $90k?

First consideration is whether there is any point in keeping the house. A ch. 13 can get rid of the equity line - so you only have the 1st mortgage once the plan is completed - but do you really want to keep a home that is worth 150+% of what you're paying? You'll never be able to sell it, at least not in the next 10-15 years.

If you are certain that BK is the way to go - stop paying on the credit cards. If you decide to give up the house, stop paying on the mortgage as well. If you are certain that a 13 is in your future, regardless of whether you want to keep the house or not, you can probably stop paying the 2nd.

Start living a cash budget - spending money on food, gas, clothing, etc. and setting aside a little here & there for car maintenance and other things that come up during the year. (But that don't happen evenly each month.) Part of a successful 13 is going in with an accurate budget on your expenses.

The quads are perhaps something you'll need to let go. Unless you are able to propose repayment of 90-100% to unsecured, I can't imagine a trustee letting you keep those loans when it means less money to the other debt. The car loans should not be a problem, assuming you want to keep both.

Schedule consults with a couple of bankruptcy attorneys. Go in with info on income, expenses, debts but leave the checkbook at home. Do not leave a retainer, don't make an emotional decision about who to hire.

[momofthree]

Have you filled out a means test to see how much DMI (disposable monthly income) you have? Here's one: http://www.legalconsumer.com/bankruptcy/means-test/ For reference, here are the IRS standards for BK use: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

Walking away from the house would probably be a good idea, unless keeping it is less than renting (doubtful based on the figures you posted). Even if you strip the 2nd, you're still $90k underwater.

You'll probably have to surrender the quads since the trustee will see those payments as money that can be paid to the unsecured creditors.

Good luck and keep us posted on your progress.

[Guest123]

Hmm, maybe chapter13 is not for us then.

We like our house and plan to stay here as long as it takes til we can move on to something bigger for the kids.

Our credit cards are the big problem. We can make our payments but they will leave no money for food and gas.
Being on a strict payment plan is something we just couldn't do. We make good money just not enough to pay for all of the credit we have...stupid mistake.

Thanks for the responses I will ask in the chapter7 section to see if that would be a better option for us.

[Flamingo]

Hmm, maybe chapter13 is not for us then.

We like our house and plan to stay here as long as it takes til we can move on to something bigger for the kids.

Our credit cards are the big problem. We can make our payments but they will leave no money for food and gas.
Being on a strict payment plan is something we just couldn't do. We make good money just not enough to pay for all of the credit we have...stupid mistake.

Thanks for the responses I will ask in the chapter7 section to see if that would be a better option for us.

You posted something in your posting in the Chapter 7 section that you did not post here - that you filed Chapter 7 previously. Please reread what you wrote above...you are in a cyclical pattern of becoming a serial BK filer if you don't realize the reality of what you are doing and living beyond your means. Repeat filers are looked at more closely by the trustee and your former Chapter 7 is still showing on your credit reports (on there for 10 years). Hopefully you will be able to learn how to live on a budget after you clean up this mess because with two BKs on your report for a while yet you are going to get hit hard with reality whether you like it or not. Sorry to be so harsh but you need to look at what you are doing to put yourself in a financially destructive pattern and not save money and live within your means. Just because you are making minimum payments doesn't mean you can handle the situation - you are insolvent (broke). Best of luck to you...

[Flamingo]

After he got the money, my lawyer disappeared. Its all pushed to the paralegal, and he never gets back to me.

Maybe some people are more professional than others. Lawyers seem money hungry above all things.

You just probably went to a BK mill to try to save money and did not research the attorney/firm. Remember you get what you pay for. There are bad apples in every barrel (profession) but the good apples always outnumber them. And good attorneys provide clients at consultation with their options and not tell them what to do. The BK laws determine what Chapter under which a debtor files, not the attorney. So if you make a lot of money and can pay back some of your debt, you will face a Chapter 13. Most will try to steer people clear of debt consolidation services as most people that go on them end up filing BK anyway.

[jennilynn]

13?

Hmm, maybe chapter13 is not for us then.

We like our house and plan to stay here as long as it takes til we can move on to something bigger for the kids.

Our credit cards are the big problem. We can make our payments but they will leave no money for food and gas.
Being on a strict payment plan is something we just couldn't do. We make good money just not enough to pay for all of the credit we have...stupid mistake.

Thanks for the responses I will ask in the chapter7 section to see if that would be a better option for us.

-- I think you best bet right now, being that you say you make "good money" is that you meet with a few attorneys, OR you at least fill out a means test and see where you are in that aspect. Whether you like a strict payment plan or not - you may need one. You've posted that you have lived beyond your means - which is an issue because you're looking at filing a second case...

If you make good money - a 7 may not even be an option and a 13 may be your only way to go. Which means a budget and a pretty good one at that.... some times, if you can propose enough to the unsecured, you MAY be able to keep the quads, depends on the trustee in your case... a 13 MAY strip that 2nd mortgage too. Will depend... something to definately discuss with an attorney as it is not something to undertake pro se.

[Guest123]

You posted something in your posting in the Chapter 7 section that you did not post here - that you filed Chapter 7 previously. Please reread what you wrote above...you are in a cyclical pattern of becoming a serial BK filer if you don't realize the reality of what you are doing and living beyond your means. Repeat filers are looked at more closely by the trustee and your former Chapter 7 is still showing on your credit reports (on there for 10 years). Hopefully you will be able to learn how to live on a budget after you clean up this mess because with two BKs on your report for a while yet you are going to get hit hard with reality whether you like it or not. Sorry to be so harsh but you need to look at what you are doing to put yourself in a financially destructive pattern and not save money and live within your means. Just because you are making minimum payments doesn't mean you can handle the situation - you are insolvent (broke). Best of luck to you...

What does filing a chapter 7 before have to do with the matter? There is not enough information in my post that warrants your ASSumption. I didn't ask for answers I already knew or someone to try to scold me. Thanks but no thanks for the help.

[Guest123]

-- I think you best bet right now, being that you say you make "good money" is that you meet with a few attorneys, OR you at least fill out a means test and see where you are in that aspect. Whether you like a strict payment plan or not - you may need one. You've posted that you have lived beyond your means - which is an issue because you're looking at filing a second case...

If you make good money - a 7 may not even be an option and a 13 may be your only way to go. Which means a budget and a pretty good one at that.... some times, if you can propose enough to the unsecured, you MAY be able to keep the quads, depends on the trustee in your case... a 13 MAY strip that 2nd mortgage too. Will depend... something to definately discuss with an attorney as it is not something to undertake pro se.

Thanks for the helpful advice. I'm basically looking for options and talking to a few attorneys is one thing I might do. Where not looking to strip the 2nd so I'm thinking my current plan might be the best. Some bills will be late but they will all get paid.

I have been on a kinda strict payment plan since I learned of this problem a couple of years ago. Just looking for a fast out that I don't think is in the best interest of the family.

Thanks again.

[momofthree]

Unfortunately, I don't really see any way you'll be allowed to keep the quads, whether you file a 7 or a 13, UNLESS you are paying back a very high percentage to your creditors.

You've said a couple times that you make very good money, but simply live beyond your means. Based on that information, you will probably not even qualify for a chapter 7. 13 may be your only option. The term "serial filer" simply refers to anyone who files bk more than once; it is not at all meant to be a derogatory term, it simply means that the trustee is going to review your case very closely to rule out abuse, so a first-time filer in your situation might be able to slide a ch.7 under the radar, while a 2nd-time filer wouldn't, kwim?

Have you completed a means test to see where you stand? This is step #1 in determining which chapter you can file. Here is a good one, when you enter your zip code & family size, it will pull up your state's income limits and IRS standards automatically. http://www.legalconsumer.com/bankruptcy/means-test/

Good luck and keep us posted.