Hating Chapter 13

[bling32]

Hopefully, this last year will go really fast. And, you will be re-build your credit. You are so close to discharging your debt. Don't give up.

Best wishes!

[Flamingo]

Well I wasnt posting to blame anything or anybody just circumstances, like my husband losing his job and the rate. I was just venting. Our lawyer told us we could convert to 7 and let the house go and Im almost on the verge of doing it especially if our mod dont go through

Jade - it's obvious from your postings and the additional info you provided that you can no longer afford your home. You should contact your attorney, sit down with him/her, and go over your entire situation. Best of luck to you.

[teddybeardj]

I am not ready to sympathize, because you have never really explained your situation, that I have seen, as to why you are in chapter 13 in the first place? As desp points out, you filed for a reason. I suspect there isn't/wasn't much alternative to deal with your financial challenges.

And based on your "complaints," You are still addicted to lifestyle, you aren't ready to, or maybe don't know how to live within your means. Most chapter 13 clients easily have a $3,000 emergency fund 1 year into a chapter 13.

HHM...How can you have a $3,000 emergency fund if your in chapter 13? I am six months into it and I am following the rules as best I can, one of which I thought was anything left over after allowed expenses was open game to trustee. If you have an extra $3,000 what is to keep the trustee from wanting it to give it to your unsecured creditors and calling it a merry Christmas to them??

[LadyInTheRed]

HHM...How can you have a $3,000 emergency fund if your in chapter 13? I am six months into it and I am following the rules as best I can, one of which I thought was anything left over after allowed expenses was open game to trustee. If you have an extra $3,000 what is to keep the trustee from wanting it to give it to your unsecured creditors and calling it a merry Christmas to them??

A chap 13 plan shouldn't make you live from paycheck to paycheck. The budget should cover occasional expenses which means you have to save in the months you don't have those expenses. Your trustee is not watching your checking account balance and waiting to swoop in and take what you manage to save. One of the keys to a successful 13 is to build savings. If your plan was approved and you have no significant financial changes, make your plan payments, save whatever you can and don't worry so much about the trustee.

[teddybeardj]

A chap 13 plan shouldn't make you live from paycheck to paycheck. The budget should cover occasional expenses which means you have to save in the months you don't have those expenses. Your trustee is not watching your checking account balance and waiting to swoop in and take what you manage to save. One of the keys to a successful 13 is to build savings. If your plan was approved and you have no significant financial changes, make your plan payments, save whatever you can and don't worry so much about the trustee.

Oh wow.. Let me find the emoticon that shows the hand swiping across the forehead with a sigh of relief look... thanks, that makes sense.

[octoblonde]

Wow! That is a high payment for a $50K house! That's a $100K house payment. I don't know your situation, but with that payment, and an ARM, I'd consider ditching the house. As far as a car loan, can you get approved online for a Capital One Blank Check? I don't know much about the restrictions in a Ch.13, so I'm just throwing the idea out there.

[chicagoannie]

Hating Chapter 13 more and more everyday. Mortgage rate keeps going up, payment keeps going up. Can't get a vehicle financed anywhere not even a buy here pay here lot without having to put down 3 grand. This is probably been the biggest mistake of my life and we still have another year and 4 months. If anybody is trying to decide between 13 and 7, do the 7 at least it will be over a little quicker! I'm just so frustrated!

Aren't you the person who has the house that's worth $50K, you owe +$90K and were trying to short sale it? I am guessing the short sale did not go through? I just do not understand why you are hanging on to this house when you are so underwater and your family has struggled with income loss and car repairs, etc. You have horrible mortgage terms and your attorney seems incompetent. Convert to the Ch 7, stop making those ridiculous mortgage payments, SAVE a couple months of those payments and buy a decent beater, CASH, and start looking at rentals.

JMHO but you guys are clearly not making it and something needs to give.

[muzzey58]

I've been in this maze for nearly 5 years in November and am counting months and days instead of years! I am so sorry for your pain in all this mess. The housing market is probably the main reason so many Americans are filing for bankruptcy right now. I look at all of this and realize that if you have your health, loved ones and a roof over your head then you're blessed. Owning a home is not worth being so frustrated and sad. I live in a building where a large portion of the tenants lost their homes to foreclosures and now are in chapter 7 bankruptcy. They gave up their homes and are rebuilding their lives slowly. They also don't the HUGE payments to a court every month. My husband and I have paid over $65,000 to the court and have at least another $7,000 due in payments before our case ends.

We could have taken that money put it in the bank for retirement and lived comfortably if we were able to file a chapter 7. However, in 2005 Congress decided to punish people who made over a certain amount into chapter 13s. Chapter 13s were meant for debtors to protect their property from foreclosure and repossession. We don't own a house. Only a car and some old furniture that is worth around a few thousand dollars. If you are underwater then I would say let the house go and start fresh again. Take the money that you have paid to protect your home and get a good car, rent a decent place, and put money in the bank.

No house is worth all this hassle. Life lessons learned around 22 years ago. My mother was co-owner of a small home that I grew up with her Dad. My mother died in 1989 without a will and the house was left only in his name. My grandfather became very ill from Alzheimer's disease and had to be put into a nursing home. Since my grandparents had two properties then the primary would be for my Grandmother to live in, but we lost our home to pay for his nursing home care. My mother paid totally the mortgage on the property. No one expected a 55 year old woman to die before her father but it happened. We were devastated but found that in the end that it was actually a blessing. We started a new life and made it through on our own. The memories in that house are what is important and no one can take that from us. The house is a house, but having your family is what matters the most.

I would let the house go with a fresh start.

Blessings to you.

[CCB35]

its odd but i had an arm mortgage and mine never went up .i am thankful for that .seven months to go

[LadyInTheRed]

its odd but i had an arm mortgage and mine never went up .i am thankful for that .seven months to go

Probably because interest rates went down. Two years ago, when I hit the five year mark and my ARM adjusted at the same time the interest only period expired, my interest rate went from 6.25% to 3%. My payment still increased a little but the increase was all principal. The rate went down another 1/4% last year.

Be prepared that when interest rates go up again, your mortgage payment will probably go up.

[Flamingo]

I've been in this maze for nearly 5 years in November and am counting months and days instead of years! I am so sorry for your pain in all this mess. The housing market is probably the main reason so many Americans are filing for bankruptcy right now. I look at all of this and realize that if you have your health, loved ones and a roof over your head then you're blessed. Owning a home is not worth being so frustrated and sad. I live in a building where a large portion of the tenants lost their homes to foreclosures and now are in chapter 7 bankruptcy. They gave up their homes and are rebuilding their lives slowly. They also don't the HUGE payments to a court every month. My husband and I have paid over $65,000 to the court and have at least another $7,000 due in payments before our case ends.

We could have taken that money put it in the bank for retirement and lived comfortably if we were able to file a chapter 7. However, in 2005 Congress decided to punish people who made over a certain amount into chapter 13s. Chapter 13s were meant for debtors to protect their property from foreclosure and repossession. We don't own a house. Only a car and some old furniture that is worth around a few thousand dollars. If you are underwater then I would say let the house go and start fresh again. Take the money that you have paid to protect your home and get a good car, rent a decent place, and put money in the bank.

No house is worth all this hassle. Life lessons learned around 22 years ago. My mother was co-owner of a small home that I grew up with her Dad. My mother died in 1989 without a will and the house was left only in his name. My grandfather became very ill from Alzheimer's disease and had to be put into a nursing home. Since my grandparents had two properties then the primary would be for my Grandmother to live in, but we lost our home to pay for his nursing home care. My mother paid totally the mortgage on the property. No one expected a 55 year old woman to die before her father but it happened. We were devastated but found that in the end that it was actually a blessing. We started a new life and made it through on our own. The memories in that house are what is important and no one can take that from us. The house is a house, but having your family is what matters the most.

I would let the house go with a fresh start.

Blessings to you.

See my highlight in red. Note that it's not the housing market that causes folks to file, it's the debt they have accumulated to that point in their life that causes them to file. People who did not take out second mortgages to finance vacations or luxury items and who stayed within their means and managed to hold onto their jobs during this economy faired well. Those burdened by debt, both secured and unsecured, learned the hard way what can happen when there is too much debt. Debt causes bankruptcy; not the economy. It's hard for everyone that has filed to state that at first but eventually one realizes how they got into the position they are and can actually blame themselves. If we didn't have the high debt we had when my husband lost his job we would have not had to file. For months I blamed our BK on my husband's job loss and loss of income and not the debt.

One good thing about this economy is that it has forced many people to realize what too much debt can do and the problems it causes. Many people have learned to realize that material things in life don't mean so much and one doesn't need a McMansion or 20 credit cards to be happy.

[jetsfan2010]

Flamingo is right. BK, especially a 13, is a raw reality check that many people need regarding debt(not the economy). You have to be honest with yourself, and figure out why you filed, and what caused you truly to file. Every persons reason is different, but by the time you are done with your 13, you should be looking at money and finances COMPLETELY different than you did before you filed.

[Pandora]

People who did not take out second mortgages to finance vacations or luxury items and who stayed within their means and managed to hold onto their jobs during this economy faired well. Those burdened by debt, both secured and unsecured, learned the hard way what can happen when there is too much debt. Debt causes bankruptcy; not the economy. It's hard for everyone that has filed to state that at first but eventually one realizes how they got into the position they are and can actually blame themselves.

Utmost respect for you Flamingo, but have to disagree with what you wrote to a certain degree

We did not have any debt other than mortgage (both 1st & 2nd combined fell within 26% of our income (PITI)) and a small car payment (less than $200) - owned every other vehicle we have and our RV - paying over $60K to pay them all off a little over a year before he lost his job. Hindsight is 20/20. Our filing BK wasnt due to purchasing outside our means nor wracking up loads of debt. We had to file because hubby lost his job and at 90K+ a year on his income alone (total was over $105K), those jobs dont come often, especially in his field of expertise. Finding a job (any job) that paid even $10 an hour was difficult, and when he finally did get one almost a year later, it was at 1/3 of what he was making, but it paid the bills and provided benefits (we were paying COBRA), and for that, we're grateful.

So not everyone files due to excessive debt, lack of control, or buying outside their means.

[keepsmiling]

Again I must ask-- if there is a material change in circumstances, and there are payments to unsecured creditors, aren't you allowed to revisit the plan?

[LadyInTheRed]

Again I must ask-- if there is a material change in circumstances, and there are payments to unsecured creditors, aren't you allowed to revisit the plan?

Yes. But since the OP is in a 3 year plan (under median income) and is paying mortgage arrears in the plan, there may be no wiggle room to allow for a lower payment.