Well I got the news....

[dadof3]

Hello forum members, I went to see a couple of attorneys since my last post and i wanted to update everyone and possibly get some feedback from those who may have similair situations going, I decided to give up the new home work $238k and return to the rental home $55k due to the uncertian economy here in Michigan and the fact that if I or the wife get laid off then one of us would have to make enough to support the note, the attorney I visited averaged our income over the last 6mths and told us that due to us being way over median (110K) that our repayment wd be approx 2k mth plus the home cars that we are reaffirming, the second attorney advised the 2k approx mth payment incl all reaffimed loans so only addl thing wd be utiltites ect....we have decided to move from larger home sept 1 so the kids can be setteld before school begins, no use in waiting till the last minute, i did not pay the note for august for home im giving up because we need it to move and repair previous home and to file, what scares me is the super tight budget for the next 5 years and what is going to happen if a creditor objects to the plan, why i am so nervous is that my wife has the good credit and to qualify for the loan we did a state income mortgage in her name only combining my income with her and the attorney sd that i my be considerd fraud and will not be dischargable in the bankruptcy! also we have had to use charge cards for a few minor purchases due to the fact we were trying to pay the mortgage for both places and spend 200wk between both of us to get to work. My wife does nt want the creditors to start calling the job and wanted to file before foreclosure so home could be included in bankruptcy. should we now tough it out for 91 days first, the attorney is also a trustee so he knows what will fly but i get the feeling he is more on the creditor side than ours. sorry so long we are just so scared right now! any advise is appreciated!

[SinkingFast]

Personally, I'd wait. Partly the burden of proof shift and partly so your Foreclosure and BK fall together. Also, if you've had reduced income, the extra time will help reduce your 6 month pre filing average.

Mortgage Lenders posting here have said when both events occur at the same time, down the road, potential Creditors will view BK coupled with Foreclosure as one financial event rather than 2. I've read similar comments on other Credit info websites.

Your Foreclosure could go pretty quick:

http://www.foreclosureuniversity.com...s/michigan.php

And with you moving out in advance, you could be considered to have "abandon" the property. Abandon property has a 30 day Redemption period as opposed to 6 months with other property.

It's hard to say whether your wife will get calls at work or not. Hubby never got any calls at work. But other people have posted that they did get calls at work.

All you have to do to stop that is send a letter specifically telling Creditors not to call Wife at work. Some will abide by simply being told to quit on the phone, but they must comply if you direct them to not call at work in a letter. Otherwise, they are violation of the Law.

Also, if you are gonna file in 3 months or so, you can go ahead and give Creditors your attny's name and contact info. Generally, most will stop calling when you say you're gonna file BK.

[dadof3]

thanks for the feedback, ??? in the meantime i would like to get rid of the suv i am upside down in and get a car for 20k or less, i cant trade it if i can buy another second car and reaffim new car and surrender the old would that be viewed as fraud by the trustee, im trying to lower gas and payment due to the fact the suv i have by itself exceeds the transportation guidlines, what to you guys think?

[aa06a47]

dadof3, the current law allows for full payment to unsecured creditors. As the law stands now, really, the more the secured payments, the less to the unsecured. While the means test allows so much for a vehical, house, ect., it takes your actual payments for secured items when figuring your payments.

This is one reason you should take a good look at which house you really want to spend the next 5 years in. If your house payment is 1000 /month more on the nice house and the rental house, that is 1000/month less the trustee will ask from you. And, in reality, your nicer home will appreciate alot more in the next 5 years than your rental house. In fact, I wouldn't be surprised if new house didn't go up in value 50-100k in the next 5 years. (your actual out flow of money will be the same, it will either go to a appreciating asset or to the trustee...keep that in mind as you make decisions on what your getting rid of)

I don't blame you for trading the SUV in for something less expensive to drive. I'm in the US auto industry as well, and it is scarey times. Do keep your actual gas expenses logged as the trustee's will allow additional expenses on the I&J forms from the government allowance if you can prove it.

[dadof3]

thanks for the responses, i am nt wanting to move but even if we stay the arm will adj before chp 13 over, we barely get by now, aside from the house the auto payments are a big drain and i want to get out of the truck anyway because i am way upside down and due to all the comuniting i need something reasonable for the nxt 5 years in case the gas price continue like they have been, i want to try to do that be fore my credit gets too bad, or do you think it would be a bad idea??? sorry so many ?? but i have what if my self to death and cant think objective anymore, all feedback is greatly appreciated!

[aa06a47]

I would do whatever you need to do to get the vehical you need. Taking on secured debt with no significant increase in the payment really shouldn't raise an eye brow. Now, if you were to go out and buy a Mercedes, it might raise an eyebrow, but as far as I know, there is nothing "illegal" about it. I would ask an attorney this question. I don't think an attorney can actually tell you what to do here, so you need to ask him some what if questions.

You should ask the attorney what happens when arms increase and if it is just an amendment and your payment to the trustee goes down as your mortgage payment goes up. ARMS for people in Chapter 13 is a problem that probably has some legal precedence somewhere along the line.

It is really all up to you on what you want to do. I'm just trying to think of how much better off (at least on paper) you will be in 5 years if you keep the nicer house.

[SinkingFast]

Let me say this about that,...........

Up in the News Section, attnys have already challenged the fact they cannot give financial advice. Looks like they are gonna win that one. Yeah!! Score one for us!!

We were in a similar spot last spring. We had equity in a truck and owed the IRS $8K. Our attny would not advise us how to handle the situation. He didn't say refi. He didn't say sell. He simply said, come back when you've gotten your tax issues resolved.

We wanted to refinance the truck to get the money to pay the IRS. BUT several attnys told us that would look fraudulent to the Court if we took on new debt on the eve of filing BK. Sooooooo we sold the truck and paid the IRS. If we had it to over with again, we woulda refi'd the truck.

I agree with Aa. If you trade and don't significantly change your current payment, it shouldn't be a problem with the Court. Especially when you explain that the other vehicle is eating you alive in fuel costs.

Don't say, "I knew we were gonna file Ch 13 BK and I wanted an economical vehicle that would last 5 years."

Same payment with reduced fuel costs, and maybe reduced insurance costs sounds like more disposable income to the Trustee's ears. Maybe just means you live a tad more comfortably than if you still owned the gas guzzler.

[dadof3]

ok guys, I thank you for all the feedback, so let me ask this ???, went looking for lower price vehicle and found a mercury for 21k 06 , problems is we are both severely upside down in autos so cannot trade at all, however did tell dealer about pend bankurptcy and desire to reaffirm new auto and possible surrender my car $560.00 mnth due to payments being 1mth behind and in my name only, sd loan can only go thru in wife, and she has the truck , would this be a bad move due to her acquire another veh in her name so close to bankruptcy? also since you reccomend wait more time to file should we hold off moving untill more time has passed between last charges??? sorry so many ??? I dont want to make the wrong choices and have our case not discharged!

[miss puff]

Sorry to hijack---

Mortgage Lenders posting here have said when both events occur at the same time, down the road, potential Creditors will view BK coupled with Foreclosure as one financial event rather than 2. I've read similar comments on other Credit info websites.

.

SF, do you or anyone else know if it would be considered one financial event if we didn't reaffirm, were discharged in oh let's say December 2006 but you didn't actually forclose on the house until sometime late 2007? Would it be listed as IIB whether you forclosed, sold or were still making payments? I'm sorry, I have probably asked this same question in 10 different ways, I am just a kinda gal that has to know everything from every angle. Thanks

[miss puff]

went looking for lower price vehicle and found a mercury for 21k 06 , problems is we are both severely upside down in autos so cannot trade at all,

Won't buying a 06 make you upside down again in a very short period of time again? I am not sure about the auto buying/trading/selling rules in BK because we are giving our gas guzzler back and trying to scrape up about $1,500 to buy something to get us through the winter. But I thought the general thought was anything new would depreciate the second you drove it off the lot.

[Anj]

Reading your posts - you sound a lot like me - if my fiscal responsibility now dictates how i will behave in the future - I will be screwed, to actually pay back all but pennies of what i make each month and survive for 5 YEARS is just a mountain that I don't know that I can climb. BUT people do it every day - and the fact that I started this 13 with close to nothing and will end with even less is pretty ironic...

I guess what I mean is good for you to try and get rid of as much "fluff" now rather than struggle in 12 months. I can tell you beyond a shadow of a doubt... after that 1st payment was made, I have been trying to think of every way under the SUN to get out of this 13 with the shirt on my back and I finally will with less than 12 months payback...

BUT - before you say "HOW" - I'll tell you - divorce, losing my home that we bought to raise our kids, giving up a family life - all that gone. Because of our debt - partly, yeah, we let money problems ruin us in some way... so please please please - keep a level head, be realistic about your budget and hang out here as much as possible - cause on the days you think you can't take one more day of trying to figure out where the gas money is gonna come from - there are the rest of us here trying to figure out the same thing

((hugs)) hang in there buddy... and love your wife

[dadof3]

that is probably true, but we commute 100 mi round trip , i cant take any chances and with the 06 there is a rebate of approx 3k so i would nt be so flipped on equity, also with the new auto i can get gap insurance, which i dont have, and have a warranty for 70k , mine on suv is now expired, and 0% on new auto i dont have the intrest sinking me futher in the hole, bad part is wife will show 2 autos instead of one and since i am behind on my veh that would be the one to go back, again what do you guys think?

[dadof3]

Anj, thanks for the encourgament, she is devasted more than i because her name is on the line for all this stuff, i never took the credit game so seriously as she so now it is like starting over from less than zero in a way. I am so glad to have found this fourm cause w/out being able to have been able to read about all of your stories we would be lost ! Im trying to see the light at the end of the tunnel, stay positive and count what is really important, at the same time we have been though so much crap this year due to our own bad choices , it would be nice to know everyone is not out to stick it to us !

[lrprn]

that is probably true, but we commute 100 mi round trip , i cant take any chances and with the 06 there is a rebate of approx 3k so i would nt be so flipped on equity, also with the new auto i can get gap insurance, which i dont have, and have a warranty for 70k , mine on suv is now expired, and 0% on new auto i dont have the intrest sinking me futher in the hole, bad part is wife will show 2 autos instead of one and since i am behind on my veh that would be the one to go back, again what do you guys think?

Dadof3, the trustee is not going to allow more than one car for each driver to be included in your 13 plan. Have you discussed these plans of yours with your lawyer?

[SinkingFast]

I wonder if how they Title the vehicle would make a difference??

I know when we've bought, the loan was based on Hubby's income, but the vehicles have been titled Joint, in both our names.

Are you filing Joint BK? Would the vehicle be titled Jointly? Is your other vehicle titled Jointly?

If filing Joint, on an overview of your current finances, will the total of the vehicle payments appear close to the same as before?