New Chapter 13

[NDG]

I met with my attorney three days ago and am still in shock that I am going to be a CH 13.

My story: $100K annual, two mortgages, a house that is worth less than those two mortgages, a 401(k) loan of $850 a month, one car $250 a month, a 30 yr old daughter lives at home pays me $600 a month rent (have to claim that because she filed CH7 last year and used it). I have $100K in unsecured credit card debt. I am a complete idiot who took the 401(k) loan Jan 2010 and simply handed it over to my creditors without trying to negotiate the debt. Didn't know that you could do that.

I have paid my bills on time every time for 30 years. I have raised my daughter, put her through college, brought my two ailing parents into my home and cared and supported them until they both passed away. My mom passed last year and my accountant pulls me aside at the wake and says we need to talk. Now that I have lost my mother, I have lost my last dependent and now I get to loose my head of household . That will cost me $800 a month in taxes.

That was the final breaking point. I have $39 in my savings account, and am now two months behind on all of the credit bills. I have managed to pay both mortgages and they are current.

My attorney says I failed the means test and that I have filed CH 13. She also tells me I am going to have to pay the trustee $1200 a month. $1200 !!!!!!! When I asked her where I am supposed to get $1200 a month, she says I don't pay the mortgage(s) one month and the trustee the next month.

I am sick to my stomach and realize that this is going to get worse before it gets better -- if it gets better. I am so very uncomfortable not paying the mortgage and will be equally uncomfortable not paying the trustee when I will be under some kind of order to do so.

My attorney says I will probably have to go to several hearings and do the back and forth paying between the mortgage and the trustee for about 6 months before she will be able to get me into a CH 7.

Does all of this sound right to those of you that have been through this ?????

[13for60]

NDG -

Deep breath! Your story is very similar to mine.

You are definitelty in Chapter 13-land. You make too much money. When the laws chenged in 2005 people who make over the median for your area got hosed.

But that's OK. You sound like me - we pay our bills, take care of our family, then WHAM our finances catch up with us and we don't know what to do. Seeing an attorney is a good move, but you might consider seeking another opinion just for comparison.

BTW - in my humble opinion, there is no way an attorney can look at your finances and make an esitmate of your payment. It's less than a ball-park guess. It's a complex calculation that takes many things into account. Until your schedules are completed, there is no way to tell.

From the outside looking in, $100k is unsecured debt has to be at least $3000/mo in minimum payments. The second mortgages will likely be stripped and sent to the unsecured side of the ledger. $1200 has to be more palatable when considering it from that perspective, right..?

If it's any consolation, I'm in the $3000/mo range. 2 payments down, 58 more to go.

I began to feel more secure in this process when the initial petition was filed and the creditirs had to leave me alone. Stay ojn track and get tyhat done pronto and you will be surprised how quickly you will begin feeling at peace with the situation. Until then, get the packet from your attorney, get it filled out, stay on top of things, and do your part to get this train rolling.

You'll get on top of this - it's only a matter of time. Say active on this forum - there is a ton of support here.

Keep breathing!

--13for60

[FishersMike]

How much is your first mortgage balance? Value of home? If the value of the home is less than the first mortgage you should be able to do a lien strip. So do not know how much you pay a month for your second, but this may be eliminated so $1200 might not be too bad when you realize that includes the 2nd basically. Also I agree above the calculations can change super easy and would be hard to estimate.

Good luck to you - this site has a wealth of information.

[NDG]

Thanks for your thoughts and you are right, just breathing is tough right now, as is sleeping ... I have never heard about stripping of the second. My first mortgage is at $285 and the house value is down to about $320. I owe $123 on the second. And yes, if the second is stripped then $1200 a month might be doable. So my first step is finding the attorney fee and I guess I am going to skip a payment on the second mortgage to get her paid and give her my christmas bonus. Then I will get to see what happens. I am terrified but have spent lots of time reading everyone's stories on this site and feel not so totally alone now. What I like reading the most are the stories of the people already on the other side and hearing that it somehow all works out in the end.

[enginegirl]

Are you sure your home is worth 320k?? You will be unable to strip the 2nd mortgage as the value of your home is more than the amount of the first mortgage....
The best advise ... go see a lawyer asap... interview several and pick the one that you feel will be most willing to fight for you with the trustee.... he/she will advise you as far as stripping of 2nd mortgage etc and the majority of them will give you the initial consultation for free...
best of luck to you.... I know this is hard..

[Pandora]

My attorney says I failed the means test ...... When I asked her where I am supposed to get $1200 a month, she says I don't pay the mortgage(s) one month and the trustee the next month.

I'm going to disagree and say that you need to consult with another (or 2) attorneys at the very least. Any attorney telling you that you should avoid paying your mortgage one month in order to pay the trustee, and then flip it around the subsequent months -...is stupid as hell. *sorry*...

If you cannot afford to pay your trustee every single month - your Ch. 13 plan will fail immediately - and the trustee will see that as well. A Ch. 13 must be feasible to succeed. Just because you are over the median does NOT mean you do not qualify for a Ch. 7 - I am so bothered by people saying their attorney "said so" based merely on the fact of income levels, without going through expenses.

Good luck to you and definitely find another attorney... just my .02

[NDG]

Thanks for being the first to comment on my attorneys advice that I flip flop the payments. I am very uncomfortable with that advice and will get a second or even third opinion. I have already gotten more good advice from this forum then from my attorney. I learned from a "sticky" note about the law that allows me not to claim my one time bonus last year from my disposable income calculation. That makes a $5000 difference. Also since I have lost my head of household status, my taxes will be significantly different when I file my 2010 returns. My accountant calculated the amount to be an additional $800 per month and that is how I changed my deductions. So I am going to hold off for just a bit to try to get my taxes done quickly so we can use that number along with the modified income calculation. Hoping for a 7 now !!