Can the trustee make you surrender your home?

[kcfaninin]

If the trustee believes your mortgage is too high for your income level, can he make you surrender your home? We want to keep the home, but are 2 months behind in our mortgage.

Chase won't talk to you while your in bankruptcy and states they won't accept payments either. Is it possible to work out a loan modification or something with the lender after discharge, if the trustee tells us to surrender the home?

[NoMoreCards]

In your other post you are discussing having to quit a part time job (for health reasons) and to lower your income. But you are also 2 months behind on the mortgage and concerned the trustee will feel it is too high for you to keep.

Please do not take this the wrong way but you might want to seriously consider if the mortgage is indeed to high. Bk is the chance to walk away from a house you may be upside down in, or simply be too much to reasonably afford. This opportunity does not come along every day, so spend some time making sure you are making the right decisions for you and your family.

I wish you the best

[justbroke]

If you are filing Chapter 7... you won't have much of a choice on keeping it. While the Trustee can't really force you to surrender it, you indicate that you're behind in payments. Filing Chapter 7 while in that payment status, would push the lender to foreclose upon the mortgage.

Some lenders are doing or allow applications for modifications while in active Bankruptcy. Chase won't talk to you because you're in Bankruptcy, but your lawyer could speak with Chase. This may cost you more in attorney fees.

You also need to take a step back and examine your entire financial picture. Is the house upside down in the mortgage versus value analysis? You have many things to examine.

[kcfaninin]

In your other post you are discussing having to quit a part time job (for health reasons) and to lower your income. But you are also 2 months behind on the mortgage and concerned the trustee will feel it is too high for you to keep.

Please do not take this the wrong way but you might want to seriously consider if the mortgage is indeed to high. Bk is the chance to walk away from a house you may be upside down in, or simply be too much to reasonably afford. This opportunity does not come along every day, so spend some time making sure you are making the right decisions for you and your family.

I wish you the best

We are currently in a loan modification with one more trial payment due December 1st. If the modificatrion is approved before we file, that will throw us into a Chapter 13. The trial payment is $700/mo less then the payment we listed on our schedule J, therefore , giving us more disposable income to fund a 13. We need to list the original payment in order to qualify for a Chapter 7.

This is a huge dilemma for us. We can afford the trial payment, but that will be void once we file. If we file with the trial payment approved, then we are in a Chapter 13, which we don't want.

When I spoke to Chase, they said the modification will be void and they can't accept anymore payments while in BK. They stated that filing BK doesn't mean we can't reapply for the modification once we are discharged.

If we are 2 months behind now and they won't take payments whiile in BK, that is 5 months worth of payments they aren't receiving. That is why I worry they will start forclosure proceedings.

If our income drops below the Median with me quitting one job, it shouldn't matter if the modification is approved prior to filing, does it? Also, having disposable income shouldn't be an issue if we are under the income median either, right?

[DeadManCrawling]

You can be forced into a 13, even if you are below median. It still comes down to DMI, and some folks have been forced into 13 even when they are well below median but have extra DMI.

The means test is used to gauge whether BK abuse is present, but is not the end of the question. Let's say you are very frugal and well below median but have roommates or just don't have many bills. You could easily find yourself surprised and headed for a 13.

[kcfaninin]

You can be forced into a 13, even if you are below median. It still comes down to DMI, and some folks have been forced into 13 even when they are well below median but have extra DMI.

The means test is used to gauge whether BK abuse is present, but is not the end of the question. Let's say you are very frugal and well below median but have roommates or just don't have many bills. You could easily find yourself surprised and headed for a 13.

The means test showed we have $600 disposable income. Our schedule J showed we have $15 DMI. But, they won't allow us to claim student loan payments, past IRS payments and an additional car payment. They only allow $300 dollars for medical expenses, when we actual spend $647/mo.

It doesn't make sense to not list these expenses on the means test, they have to be paid somehow?!?

We were in a Chapter 13 for 20 months and had the case dismissed because we couldn't make the plan payments. They wouldn't allow for excess medical bills, new tires for the car, broken washing machine, stuff like that.

[Amy26]

As far as I know, you are allowed to use your ACTUAL expenses as long as you can justify why it is higher than the typical allowed rate. It is unfortunate that they won't let you use your student loan payments... I was allowed to include mine. I would definately consult with some other attorneys as there are usually lots of expenses most people miss that can be included. There is also usually a little wiggle room.

[justbroke]

The means test showed we have $600 disposable income. Our schedule J showed we have $15 DMI. But, they won't allow us to claim student loan payments, past IRS payments and an additional car payment. They only allow $300 dollars for medical expenses, when we actual spend $647/mo.

If you have actual medical expenses of $647 that can be fought because it's necessary.

It doesn't make sense to not list these expenses on the means test, they have to be paid somehow?!?

Medical payments, yes. However, student loan payments almost never count (except in extremely rare circumstances) as an expense in a Chapter 7. I don't know what you mean IRS payments. "Additional" car payment, reads like you have more than 2 cars... which is not provided for in the Code.

We were in a Chapter 13 for 20 months and had the case dismissed because we couldn't make the plan payments. They wouldn't allow for excess medical bills, new tires for the car, broken washing machine, stuff like that.

Many people find that they can't budget enough to deal with life's events that get thrown at you... like car repairs, home maintenance issues, and the like. I just had to pay for an expensive repair on my sewer line that was more than $800. Money I don't have in my Chapter 13 Plan. However, it was money that I had saved up, so I could pay for that

Being a homeowner in a Chapter 13, can be tough because the unexpected does occur. (Even being a car owner can be difficult in a Chapter 13). However, you must budget and stick to that budget.

[kcfaninin]

As far as I know, you are allowed to use your ACTUAL expenses as long as you can justify why it is higher than the typical allowed rate. It is unfortunate that they won't let you use your student loan payments... I was allowed to include mine. I would definately consult with some other attorneys as there are usually lots of expenses most people miss that can be included. There is also usually a little wiggle room.

We have consulted 4 attorneys. He is the only one that would even consider filing a Chapter 7. The others wouldn't even discuss it with our income being so high.

He did hypothetically say, if we take the student loan payments, federal tax payment and car payments out of our schedule J, that would give us disposable income to fund a chapter 13. Huh?? What's the difference if we pay it monthly or the trustee pays it? It still has to be paid and it still comes out of our income.

He has given us a few options that the others haven't. I really think he knows his stuff and his legal assistant said he is good at working the figures. She was confident he could get us in a 7.