Fought, but CH 7 Dismissal is unavoidable. What now?

[alorth]

UST is determined to get us to convert to a 13, so he is continuing with his Motion to Dismiss, despite the Medical issues that we used to answer his motion as Special Circumstances.

We are in no way prepared to go into a 13 right now, having spent a lot of "exempt" funds on fighting for this over-median 7.

So we will let it dismiss, not convert right now. Have to.

BUT....very scared about what happens now? Back into the abyss, with no Stay.

I'm most afraid that once Creditors get notice of the Dismissal, and the lifting of the Stay, they will come hard and fast with lawsuits to be first in line to get Judgements, and then set up Garnishment.

We are not the type of folks who can live without a Bank, and I am afraid of Levies on our bank accounts. My wife's employer requires Direct Deposit! What the hell are we going to do?

We need to prep to re-file the 13, with a new attorney. Their advice? We are supposed to stop paying on this house and let it go to foreclosure since the UST says the payment is too expensive and a plan won't get confirmed with us living here. We are going to have to find a new place to live with a lower payment, and because we can't buy since we have ruined credit, we need to find a long term lease/rental. We need to trade a 90,000 mile problematic car in and get a new one with a higher payment. We need to get our tax return money and try to build up some "exempt" funds to last through the 13 plan.

All of this will take time, ALL WHILE THERE WILL BE NO STAY. I'm feeling crushed by the pressure.

I'm not sure WHEN we will actually file the 13, with the new attorney. 3 months? 6 months? Is there a Stay when we finally DO file the 13?

The fear of judgements and levies and garnishments. The fear of stopping payments on the house of our dreams where we expected to live the rest of our lives and going through foreclosure. The fear of a 13 plan that is unreasonable. All of this with my failing health.

Just don't know what to do, or what to expect, and I just want to give up. I feel helpless and hopeless.

[AngelinaCatHub]

My friend, you won't give up. If you love that house, attempt to pay it first. Once the stay is lifted, just get a tougher skin and ignore the jerks. As things start to get worse, and you shop for a better lawyer, he may guide you to a workable 13. This in the future can then be converted to a 7. There is no giving up in your situation, just use it to gather strength. If you knew the problems we had, (as well as others) you would think you are blessed.

Hang in there as you are among friends here and will lead you through in love. 'Hub

[keepsmiling]

I'm sorry for all the trouble you are having. Try to relax and go with it. Perhaps you can withdraw the direct deposit as soon as it goes in, until you are all set with the 13, and go with money orders for a little while. PITA I know, but it shouldn't be for too long.

If you haven't already gotten Google Voice, get it now. That will help a lot.
Yes, you will have another stay when you file the 13.

Good luck, and take good care of yourself FIRST. Your little one needs her daddy. It will all work out. Smarter heads than mine coming along soon

[budgetgal]

Just wanted to say I am thinking of you and sending good thoughts for you to have renewed strength. You will get though this. The google voice suggestion is a great one. You are indeed among friends here. Lean on us anytime and keep us posted.

[basketsbears]

(((hugs))). I don't have any advice, but my thoughts and prayers are with you and your family. Google voice is great!

[AbbeyA]

I know you want to keep the house, but have you looked into any rentals? Would it be at all possible for you to rent out your house for a while and you find something that is less $ per month? Obviously this is probably not a very pleasant thought for you, nor one that could occur right away, but maybe once you are in a 13, it would free up a little bit of $ to help you establish an emergency fund/cash padding down the line.

Also, it will take some time for your creditors to get judgments against you and get a garnishment underway. That being said, if you can get your 13 filed in about 4 months from the dismissal of this current case, I would think that there won't be any judgments (yet) against you.

[SweetGeorgia]

alorth, I read back over some of your posts - Hang in there!

BUT - I think they might be doing you a favor by shoving you toward Ch13. And I don't like 13's at all, but I say that based on your love of your house. This may be a naive question since I don't know as much about 13's, but why wouldn't they allow the mortgage payment in your plan? My understanding was that actual MORTGAGE payments are approved, while RENT outside of the guidelines might be disallowed.

Meanwhile, you were ready to re-affirm your mortgage in a Chapter 7, but IIRC Chapter 13 doesn't require re-affirmation. That might be a good thing in the future. Chapter 7 is like a nuclear bomb - very powerful and not to be wasted. Filing Chapter 7 and re-affirming your biggest debt (which, it's not clear you can afford) is perhaps self-defeating. I know you love the house, but it's not much of a fresh start if you are trapped underwater.

Look at the next few months as planning time. If you don't already, keep every receipt of everything and put together notebooks detailing your expenses. You might find more allowable expenses than you thought you had. Wage garnishment is a real danger, but you will have some warning. If you are ready to go on the bankruptcy at a moment's notice, you can avert garnishment when the time comes. Get an out-of-state bank (USAA is in Texas); your creditors won't get to it as quickly as local banks.

It sounded like your plan payment would be pretty low, right? So a Chapter 13 could buy you time, let you stay in your house, keep your daughter in school...and also give you the flexibility in case you need to default on your mortgage at some point in the future. You are fortunate in many ways, but I think you still have a lot of uncertainties (like me): your health, the cost of healthcare, the value of real estate. The Chapter 13 lets you bob and weave a little more as circumstances require.

And I do understand the house love! We built my dream house in 2000. By a strange twist, we were not living in it when all our financial sh*t hit the fan and so I was able to let it go. I was very upset about it. But it was the right thing for us to do, and you know what? I could buy that house now for $100K less than I owed on it.

Things are things - even if you have to sell them, just remember you can always buy them back if you hit the jackpot. Take care of your PEOPLE, and YOURSELF, because you are worth way more than money. Sorry for the length of this post!