Does it hurt or help my case...

[AKA]

House is in foreclosure, just converted to 13 from 7, looking to move out soon before being forced out to rent a town home with a roommate for $1,600 mo. How would a trustee view my 13 (341 and confirmation coming soon) if I wasn't paying the mtg for the house but moved out and paying $800 mo at the new town home during this process. I believe that would look bad in the eyes of the trustee when reviewing my 13 for confirmation.

[RunningMan]

How would that look bad? He would have to know that you are surrendering the house in the BK. You have to live somewhere.

[newbie2]

House is in foreclosure, just converted to 13 from 7, looking to move out soon before being forced out to rent a town home with a roommate for $1,600 mo. How would a trustee view my 13 (341 and confirmation coming soon) if I wasn't paying the mtg for the house but moved out and paying $800 mo at the new town home during this process. I believe that would look bad in the eyes of the trustee when reviewing my 13 for confirmation.

Don't worry about it looking bad. You have to note on your petition and plan documents that you are surrendering your home, otherwise the debt won't be discharged at the end of your plan. (Chapter 13's are different when it comes to discharging secured debts. ) On your petition your attorney will enter the rental expense that you will have.

[Pandora]

I think the bigger concern I'd be worried about is that you said your lawyer used both mortgage payments as expenses (previous post) - while you can use it for means testing, its my understanding you cannot use it for an expense because its forward-looking. I believe HHM has a post somewhere on here explaining how it works when surrendering a house in a Ch. 13 and it states that if surrendering and you currently aren't in a rental, then the IRS standard for rent is whats allowed.

Something to definitely check out with your lawyer AKA since you state your payback is only $169 / 60 months based on our past chats, but do you already know what the deficiency will be on your home (if there is any) for certain or is your lawyer guessing based on its value? I know there are other threads on here where posters were in the same position as you are - got 6 months into their 13 plan - went to confirmation hearing and the trustee raised their payment based on more of a deficiency than previously thought. I know you've stated you're in a 100% payback per your lawyer, and that you only have about $7K in unsecured, with your house being the main reason you're filing; just make sure to ask about the deficiency and how that works in your plan.

Dont want you to have any surprises - BK is hard enough as it is, let alone Chapter 13.

[AKA]

I think the bigger concern I'd be worried about is that you said your lawyer used both mortgage payments as expenses (previous post) - while you can use it for means testing, its my understanding you cannot use it for an expense because its forward-looking. I believe HHM has a post somewhere on here explaining how it works when surrendering a house in a Ch. 13 and it states that if surrendering and you currently aren't in a rental, then the IRS standard for rent is whats allowed.

Something to definitely check out with your lawyer AKA since you state your payback is only $169 / 60 months based on our past chats, but do you already know what the deficiency will be on your home (if there is any) for certain or is your lawyer guessing based on its value? I know there are other threads on here where posters were in the same position as you are - got 6 months into their 13 plan - went to confirmation hearing and the trustee raised their payment based on more of a deficiency than previously thought. I know you've stated you're in a 100% payback per your lawyer, and that you only have about $7K in unsecured, with your house being the main reason you're filing; just make sure to ask about the deficiency and how that works in your plan.

Dont want you to have any surprises - BK is hard enough as it is, let alone Chapter 13.

Why wouldn't both my first and second mtg be considered an expense? Maybe we have a communication gap here. I don't have any rental expense as of now, however the IRS standard in FL for a household of 1 in the county I am looking to move to is $1,217. Actually more than the $800 I would be paying to rent the town home.

By deficiency do you mean the difference between what I paid for it and what it's current value is or the difference between the amount owed on secure debts with the house vs the current value?

[Pandora]

I dont believe its considered an expense because you arent paying it and are surrendering your house - although in some districts it's allowed to be used - but standard from what I'm to understand is if surrendering, you dont use it in the calculation. As to the IRS standard - I believe you have to claim the amount in the county you're currently residing in, not where you *might* move to.

As to the deficiency - I'm not saying you will get dinged - but its something you need to check into and see how your lawyer filed the paperwork. i.e., surrendering the 1st and 2nd in full to the debt owed. I believe the area of concern would be the 2nd mortgage becoming unsecured debt if you're upside down on the house. I think it all will depend on if the lender files both a secured and unsecured claim.

JustBroke and HHM have quite a few posts regarding this.