Help Please-need some thoughts

[Phoebe]

Hi: I'm not sure if this should go in the ch 7, ch 13 or foreclosure forum! However, here's the deal: I am in chapter 13. My house is worth about $117,000 with a balance of $82K on the mortgage. My 100% plan balance is about $14K. The chapter 13 payments have been hard for me due to job loss and lower pay and I've talked w/ my lawyer about converting to chapter 7 and he ran the numbers and feels it's doable (we'd be in under the old laws, too). Also, I need to move. I've asked my lawyer so many questions, he doesn't answer now so I thought I'd bounce this off of the group.

I became 2 months behind on my trustee payment earlier this year, and was up for dismissal. I caught up on the payments but the judge continued the case to see if I would remain current. Court date is 6/14.

I want to sell my home and pay off my mortgage and 100% of my ch 13. After all fees etc., I would still have some cash in my pocket after the sell. It is actually a condo and I'm very optimistic it will go fairly quickly (most sell w/in days around here)

My question is which scenario is best?

1. Convert to chapter 7 now, try to sell house in meantime before courts take it away (Arrears are in ch 13 plan currently). Can I still try and sell my house while waiting for meeting of creditors for ch 7??

2. Pay next chapter 13 payment and let 13 continue while I try and sell house.

3. Allow ch 13 to be dismissed, sell house and pay off creditors on my own.

4. Something else.

I would appreciate some thoughts...thanks!!!

[debtisbad]

Sinking Fast always has good info on situations like this. I'm sure she will answer. Sinking fast......where are you?????????

[SinkingFast]

Sinking Fast always has good info on situations like this. I'm sure she will answer. Sinking fast......where are you?????????

We're moving this weekend! And we're working our butts off!!

Technically, at this point, Phoebe, you're still in Ch 13. So if you wanna sell your house, you're gonna have to get permission from the Trustee still.

I don't know how it get's handled if you convert from Ch 13 to Ch 7. Whether there's a time period in there where you can sell your house yourself or not. Once you're officially a Ch 7 tho, the house is part of that BK estate and you cannot sell it then either.

If/When you do go Ch 7, tho, the Trustee will handle selling the house. In that case, the Trustee's costs to sell will run about 10%. Because Heavens knows, Trustees never do anything themselves.

First thing the Trustee has to do is pay you your Homestead Exemption. Then the Trustee pays off the mortgage, takes his/her cut, and pays the Creditors with any monies that are left over.

I'd suggest you ask your attny how this is all gonna work if your Ch 13 is dismissed. Do you automatically convert to Ch 7? Or is there a lag time in there? A window where you could sell your house.

Depending on the State you live in,.......... You might wind up with more money by letting the Trustee sell the house in a Ch 7, than you would if you sell the house, pay the Creditors, and pocket the change.

If you are going to have a window to sell the house yourself, then maybe you need to consider your options and see which way will work best for you.

[aa06a47]

Hi: I'm not sure if this should go in the ch 7, ch 13 or foreclosure forum! However, here's the deal: I am in chapter 13. My house is worth about $117,000 with a balance of $82K on the mortgage. My 100% plan balance is about $14K. The chapter 13 payments have been hard for me due to job loss and lower pay and I've talked w/ my lawyer about converting to chapter 7 and he ran the numbers and feels it's doable (we'd be in under the old laws, too). Also, I need to move. I've asked my lawyer so many questions, he doesn't answer now so I thought I'd bounce this off of the group.

I became 2 months behind on my trustee payment earlier this year, and was up for dismissal. I caught up on the payments but the judge continued the case to see if I would remain current. Court date is 6/14.

I want to sell my home and pay off my mortgage and 100% of my ch 13. After all fees etc., I would still have some cash in my pocket after the sell. It is actually a condo and I'm very optimistic it will go fairly quickly (most sell w/in days around here)

My question is which scenario is best?

1. Convert to chapter 7 now, try to sell house in meantime before courts take it away (Arrears are in ch 13 plan currently). Can I still try and sell my house while waiting for meeting of creditors for ch 7??

2. Pay next chapter 13 payment and let 13 continue while I try and sell house.

3. Allow ch 13 to be dismissed, sell house and pay off creditors on my own.

4. Something else.

I would appreciate some thoughts...thanks!!!

wait...wait...wait...wait....your about to get yourself into a lot of trouble here.

1) Do the best you can to not get the chapter 13 dismissed. Make your payments, keep them current, whatever you need to do. You do not want the automatic stay lifted. You do not want a Chapter 13 dismissed because of missed payments. Creditors will be on you like stink on crap, and may tapp you for interest and penalties that you are currently not paying to them.

2) Ask your attorney if he can ammend your plan given your new earnings. If your plan was not 60 months, you might be able to reduce the payment per month and extend the lenght to the maximum of 60 months.

3) YOU CANNOT SELL YOUR HOME WHILE YOUR IN A CHAPTER 7 OR CHAPTER 13 TILL THE CASE IS FINISHED / DISCHARGED. IT IS A PART OF THE ESTATE. ANYTHING YOU DO WITH SECURED PROPERTY IS THE BUSINESS OF THE TRUSTEE.

My recommendations is go for a modifed Chapter 13 plan. See how much your attorney can reduce your payment to make it workable. The plan may be less than the creditors were originally going to get, but income has went lower, fuel cost have increased...it should be too hard to get a reduced payment.

If your set on going the Chapter 7 route, make sure you get if filed before the case is dismissed. You want that protective blanket to not be taken off you....

[Phoebe]

Thanks

Thanks...forgot about the homestead exemption...looks like in VA I'd get $5k but I would get more if I sold on my own and then paid off debts. Right now I'm leaning towards letting the case get dismissed so I can sell w/out dealing w/ trustee. With the equity, I could easily pay off creditors in the former chapter 13 and have $ left over. But, if I can convince my lawyer to talk to me again, he can also let me know about any windows of opportunity :-)

Thanks for getting back to me!

[SinkingFast]

Like Aa so brilliantly pointed out, your former balances may not be what's needed to pay your debts now. If your automatic stay get's lifted, the Creditors could pile on penalties, interest, and late fees. Maybe your current debt total would be significanly more than when you filed your Ch 13 plan originally.

Plus, without the protection of the automatic stay in place, the Creditors will be all over you.

Just something to think about.

[Phoebe]

Yes, AA and I were writing at the same time so I didn't see his/her response when I replied. You're both right...those are all good things to think about. I appreciate all of the responses...thank you!

[aa06a47]

Thanks...forgot about the homestead exemption...looks like in VA I'd get $5k but I would get more if I sold on my own and then paid off debts. Right now I'm leaning towards letting the case get dismissed so I can sell w/out dealing w/ trustee. With the equity, I could easily pay off creditors in the former chapter 13 and have $ left over. But, if I can convince my lawyer to talk to me again, he can also let me know about any windows of opportunity :-)

Thanks for getting back to me!

Just remember, if you do a quick sell of your house, your probably going to have to take a few thousand less than what it is worth. You said the market if pretty good in your area, so that is a plus. You'll spend close to 12K in expenses (real estate, tax escrow to the new owner, and whatever else gets throwed into the real estate agreement, fixing the place up a little). I would be suprised in the end if you actually would clear much more than 20K. Your creditors you thought you only owed 14K to now, are free and clear to tack on penalties, interest, whatever, so easily I can see that bill swelling to 20K plus.

Do what you think is necessary, I just feel from what you have shared here, that your about to get into a world of hurt. Good luck.