0% Plan

[aa06a47]

Which one??

The one we're trying to sell?? Nope! Foreclosure auction later this month.

The one we rent to live in?? Yep!

I am saving my home, even though it isn't worth much more than the exemption is. Hope to get through the 5 year plan in it and then sell it and buy something smaller after this is all over. While the house isn't that "big", it is too much for me to clean. Of course, a one bedroom apartment was always too much for me to keep clean....geeze

[SinkingFast]

I know I'm skewed because our situation is different. So some of the thought processes are easier for me than for others here on the Forum.

We're away from our house. Not by choice. By change of job. So letting it go isn't really difficult at all. We ponder over the memories of the house. The kids grew up there. All the things that happened at school, little league, all our friends. We all still say, "Back home". But it's all gone now.

So when I see people struggling with what to do with their home, I completely understand. I'd give anything to get to go home again. But I know home no longer exists.

And looking at it realistically, the house was a financial drain that helped put us in this position to start with. So if a person's house is a driving force in their debt situation, they need to step back, cut the emotional strings for a moment, look at the entire situation from a logical prospective, and maybe make a hard call. Dump the house and run.

Just some thoughts from a cynical, soon to be no longer homeowner, who's been there, done that.

[aa06a47]

I agree SF, I'll get through BK and still have the burden of a first and second mortgage.
I feel sorry for people in adjustable mortgages right now, especially if they bought too much for there income because of low rates. Only good thing about my situation is that both the first and second are fixed rate loans. Payments shouldn't change much.

[anonymuse]

I've been doing more research online about 0% plans and found quite a few comments and cases where they are viewed as "bad faith" and "abuse" cases.

[aa06a47]

I've been doing more research online about 0% plans and found quite a few comments and cases where they are viewed as "bad faith" and "abuse" cases.

I have read that as well. But, as long as all disposible income is paid into the plan, as long as they get more than they would in a Chapter 7 (which in most cases is ZERO), your attorney shouldn't have a hard time defending it. Alot of judges look for chapter 13 plans that are really hidden chapter 7 plans.

[anonymuse]

I have read that as well. But, as long as all disposible income is paid into the plan, as long as they get more than they would in a Chapter 7 (which in most cases is ZERO), your attorney shouldn't have a hard time defending it. Alot of judges look for chapter 13 plans that are really hidden chapter 7 plans.

For me, it would allow me to pay off my secured loans (liens and HELOC) quicker--since I've been paying minimums, concentrate on those student loans, and say bye-bye to the medical bills and credit cards.

I'm actually starting to look forward to the process of searching for an attorney now since all this stuff seems to be coming together in my brain for me. Only thing that still worries me is my property value.

I was looking at some of the trustees manuals on the DOJ and I was encouraged when they did an example calculation for the homestead. From the estimated Fair Market Value, they deducted the lien, real estate commission, closing costs, capital gains tax, and homestead exemption to determine the "net benefit to the estate" in a Ch 7 case.