Over Median Income Ch7 Filers Forced into Ch13?

[MI_Debtor]

I plan to file for CH7 and I want to keep my house and car.

Have any you been forced to surrender a house and/or car because the trustee believed the monthly payments were too high and you should be be living in a less expensive place and driving a less expensive car? My mortgage and car payment are not very high compared to the average in my area. I hope I won't be forced to leave my house and find a cheap place to rent in a bad neighborhood I'd be afraid to live in.

I am in the Michigan Eastern District and about $9K over median. I got my house and car in 2005 so I've had them for almost 2 years. I can afford to pay for them. Borrowing to pay for my old house while trying to sell it got me into this mess. My house, car payments, and regular living allowances do not leave disposable income to pay into a Ch13 plan. However, my attorney is telling me that it's possible that the trustee will suspect abuse and could make me surrender my house and car so I could have lower expenses and give money to a Ch13 plan.

I'd continue to make my car payments to the credit union I have the loan from even if the court won't allow me to reaffirm. Maybe the credit union would be willing to negotiate a longer term so my payments could be lower once they receive notice of my filing. I asked them to change the terms of my loan recently and they said I'd have to qualify for the new loan terms. My credit is damaged due to a foreclosure on my old house that I was unable to sell so the new loan terms I qualify for would increase my payment because the interest rate would be high.

[JRScott]

Lawyers typically warn their clients if they are over the median that they might be forced into a Chapter 13. Its part of their job. However there have been many cases where folks got by anyway I've seen here.

As for reaffirmation, the court and a lawyer would probably not sign off on any reaffirmation which placed an undue burden on you. If you are showing that you are showing that you spend more money than you bring in each month on the schedules it is unlikely they'd sign the reaffirmation. However it is possible that you could do a ride through, which aren't official under the current rules and thus do carry some risk.

If you are forced into a Chapter 13 it'll be hard to keep the car if the court doesn't include it. The reason is that most Chapter 13s place you on a very very tight budget.

I hope you still get the Chapter 7 but your lawyer is just giving you the typical warning, so try not to get to worried.