Chapter 13 after a chapter 7?

[momof3b1g]

Can someone explain a chapter 13 to me? We filed a 7 two years ago. So we only have the 1st and 2nd mortgage. We have a balloon payment on the 2nd due this fall.

The house is worth about $130,00. We only owe about $98,000 between the two.
We planned to refinance but was told today they could not help us because dh's score was only 606.
Dh is not getting the hours he did last summer, that normally carried us through the year. With the balloon payment due, lower income and now refinancing isnt an option.
We are looking into what a ch 13 could do for us.
How do they figure out how much we would pay? For how long? Is a 13 as detailed as a 7?

[despritfreya]

I already explained this. Even gave you an estimated monthly payment.

http://www.bkforum.com/showthread.php?71947-Balloon-payment-on-2nd-mortgage-coming-due

Des.

[momof3b1g]

I already explained this. Even gave you an estimated monthly payment.

http://www.bkforum.com/showthread.php?71947-Balloon-payment-on-2nd-mortgage-coming-due

Des.

so you are telling me a chapter 13 will increase my payment?

[despritfreya]

so you are telling me a chapter 13 will increase my payment?

What do you mean "increase my payment"? In the fall you will have no "payments" and will owe $13k.

If you want to pay $13k plus interest (you must pay interest to a secured creditor) over 60 months you are looking at a payment of over $250 per month as you must also pay the chapter 13 Trustee fee, legal fees and anything else that would be required to be paid through a Plan. As said to you before, if you can't work it out with the lender and cannot afford the required 13 payment you have to walk away - assuming the lender takes steps to foreclose.

Edt: You do have a 3rd choice. . . borrow the $ from someplace and pay the balloon payment.

Des.

[momof3b1g]

What do you mean "increase my payment"? In the fall you will have no "payments" and will owe $13k.

If you want to pay $13k plus interest (you must pay interest to a secured creditor) over 60 months you are looking at a payment of over $250 per month as you must also pay the chapter 13 Trustee fee, legal fees and anything else that would be required to be paid through a Plan. As said to you before, if you can't work it out with the lender and cannot afford the required 13 payment you have to walk away - assuming the lender takes steps to foreclose.

Edt: You do have a 3rd choice. . . borrow the $ from someplace and pay the balloon payment.

Des.

Where are you getting the 60 months from? Is that how long the chapter 13 would be for? You are not clear as to where you are getting your figures. So it would be pointless to do a chapter 13 if it would cost us more then refinancing the $13,000.

[despritfreya]

Where are you getting the 60 months from? Is that how long the chapter 13 would be for? You are not clear as to where you are getting your figures. So it would be pointless to do a chapter 13 if it would cost us more then refinancing the $13,000.

60 months ='s 5 years ='s the longest you can remain in a Chapter 13. Payment amount: balloon + interest over 5 years at a reasonable rate ='s approx $250/month. But that does not factor in Trustee's fee, legal fees and any other secured debt that must be paid through the Plan.

Since (if I remember correctly) you have already indicated in another thread that you don't qualify for a refi, indicating that the 13 will cost more has no relevance to the issue. In reality, while the monthly payment may be higher than a refi, paying the balloon over 5 years will, in the long run, cost you a lot less than paying the same principal over, say 15 or 30 years.

You need to meet with an attorney instead of guessing.

Des.

[catleg]

If his score is 606 there must be other credit problems preventing the refinance, no?
Cause income isn't really a factor in credit scores.

[momof3b1g]

If his score is 606 there must be other credit problems preventing the refinance, no?
Cause income isn't really a factor in credit scores.

Well I wish i could figure out what it is. There is not much on his report that I can see.

I did find out tonight a couple cards are still reporting as of this year. GEMB, not sure how much this can drop his score. Will have to look into it.
They gentleman on the phone told us a 606 was not high enough to qualify.

[momof3b1g]

60 months ='s 5 years ='s the longest you can remain in a Chapter 13. Payment amount: balloon + interest over 5 years at a reasonable rate ='s approx $250/month. But that does not factor in Trustee's fee, legal fees and any other secured debt that must be paid through the Plan.

Since (if I remember correctly) you have already indicated in another thread that you don't qualify for a refi, indicating that the 13 will cost more has no relevance to the issue. In reality, while the monthly payment may be higher than a refi, paying the balloon over 5 years will, in the long run, cost you a lot less than paying the same principal over, say 15 or 30 years.

You need to meet with an attorney instead of guessing.

Des.

I'm not guessing anything. I was asking how a 13 works. As it was thrown out to me as an idea. I did not know it was limited to only 5 years. So that being said is more then the payment we have had the past 5 years and would be a no go.

[catleg]

Who is the lender on the 2nd? Maybe you can come to some terms on a refi with them, they'd probably rather see that than default on the balloon payment, unless they're totally out of the business now.

[catleg]

Normally they look at the middle score out of the 3 credit bureaus. You might need to at least grab the 3 free credit reports from annualcreditreport.com and make sure there's no lingering baddies out there anywhere.

[Mayo]

If you don't have a lot of unsecured debt and the house is all reason you want to file. I'd sell it and walk away get a cheaper place to stay to avoid filing for 13. Filing a 13 isn't something to go into lightly it changes your whole lifestyle.

[momof3b1g]

If you don't have a lot of unsecured debt and the house is all reason you want to file. I'd sell it and walk away get a cheaper place to stay to avoid filing for 13. Filing a 13 isn't something to go into lightly it changes your whole lifestyle.

Thnaks we had no intentions of doing a 13. But was told it was an option. But it really doesnt work well for us. If the payment would be so high. We may look at selling but i really dont know if we could even sell it in its condition. If we walk we are stuck with no where to go if we can't get financing. There are no rentals in our area.

[Pandora]

Thnaks we had no intentions of doing a 13. But was told it was an option. But it really doesnt work well for us. If the payment would be so high. We may look at selling but i really dont know if we could even sell it in its condition. If we walk we are stuck with no where to go if we can't get financing. There are no rentals in our area.

As has been explained several times in other posts - your options are limited to paying the 2nd in full (loan of some sort) with terms extending beyond 5 years, negotiate a settlement, or doing a Ch. 13 over the course of 5 years, thats pretty much it. Des has broken it down for you as to possible payment amounts, yet you say you cannot afford a $250 payment if all other scenario's played out (lowering interest rate, etc).

Unfortunately you have equity in the house if your valuations are correct - so not paying the balloon can result in either lender (1st or 2nd) foreclosing. If the house is truly valued at $130, yet you only owe $98K on the 1st - then your 2nd has nothing to lose as they are fully secured, can pay the 1st off in full and still get their full amount owed.

[momof3b1g]

As has been explained several times in other posts - your options are limited to paying the 2nd in full (loan of some sort) with terms extending beyond 5 years, negotiate a settlement, or doing a Ch. 13 over the course of 5 years, thats pretty much it. Des has broken it down for you as to possible payment amounts, yet you say you cannot afford a $250 payment if all other scenario's played out (lowering interest rate, etc).

Unfortunately you have equity in the house if your valuations are correct - so not paying the balloon can result in either lender (1st or 2nd) foreclosing. If the house is truly valued at $130, yet you only owe $98K on the 1st - then your 2nd has nothing to lose as they are fully secured, can pay the 1st off in full and still get their full amount owed.

You are not telling me anything I dont already know. You are missreading my post. If you look again there are no question marks!! I was just stating facts. We are looking to lower payments not to make them higher. We are pretty much stuck with NO options as the ones mentioned are not going to work. We will just stop paying payments in move in with family in another sate when the home forecloses.